Questions to Ask Your Loan Officer
First, when you talk to a real estate lender, you should request a good faith estimate. This is an estimate of your closing costs, prepaid escrow and the interest rate. It's a good way to compare one lender to another. Keep in mind that some of the fees and the interest rate may be negotiable.
Also keep in mind that if you compare two different types of loans there may be other costs to consider, like comparing a fixed rate to an adjustable rate home loan. The rate and payment on the adjustable rate loan could go up over time.
A major consideration when choosing a lender is performance and reputation. You often get what you pay for and the cheapest may not be the best choice. A good way to determine performance is a referral from a friend or your Realtor.
Discuss your needs with the lender. Fixed payment, little down, low payment for now....
Paying Points: A point is a percent of the loan amount, to buy the interest rate down.
If you are considering paying points, calculate how long it will take to recoup the cost. Unless you intend on keeping the same loan for a few years, they usually don't make sense. Also, they add to your closing costs. If you have extra money, it might be better to have a nest egg for unexpected expense than to spend it to buy the interest rate down. Then again, for some people they make sense.
|
