Are you looking for a home? Did you recently get a credit card? Do you need help with your credit report? Is your insurance premium a bit high for your liking? Or, do you need advice for a mortgage loan?
These are the queries where a lender or broker comes in handy.
However, some things can be solved without a particular call or meeting, while others require you to be prepared when you go in for a visit.
Doing your research on talking to a lender before going in can really save your time, energy, and even money. Moreover, it can also help you get better prices and premium rates.
So, let’s find out the answers to some top questions you can ask your lenders. Knowing the answers already can help you analyze the situation accordingly.
Disclaimer: We have also listed what you shouldn’t say to your lender.
What precisely the mortgage lender has to offer is probably the first thing you should know in the lending deals.
Of course, you can get different types of loans depending on your income, credit rating, and score. But, it’s always appreciated to know your choices beforehand.
In general, there are two mortgage loans you should know about:
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Fixed Mortgage |
Adjustable Mortgage |
|
Non-negotiable (set) interest rates that won’t change during the entire loan period |
Flexible interest rates that may change recurrently during loan period |
|
The monthly payments, interest rate, principal, and other fees remain consistent |
Payment and principle rate may be at a higher or lower price depending on the interest market |
Then again, which loan suits you perfectly depends on your financial conditions and the things you are expecting from the mortgage.
Bonus: Click to find how to build a good credit score in Canada to get the best possible financial help.
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The loan process may vary depending on your lender, mortgage company, and the type of loan. But, in general, the standard loan process application includes
And, what documents are needed exactly depends highly on the lender's demand. For example, they might check credit score or do a thorough analysis of your income resources.
Then, they might request you to submit the following documents:
Some lenders might ask you to sign documents with your financial information or a promissory letter.
So, make sure you know everything and have the documents ready before contacting the lender.
Lenders look at several things to decide the future of your loan application. You can surely make your approval guaranteed by improving where you lack.
Here are essential requirements of most mortgages:
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Finally, something you can understand about the loans, right.
Your interest rate depends highly on your FICO score, clear credit history, and range of your credit score. But there might be excellent options available even on bad scores, and you just have to look for them.
Your interest rate decides the loan payment you’ll be transferring to the mortgage company.
So, you must ask the exact percentage and see if it can be any low as per your financial situation. In addition, here are some questions you can ask:
Do your homework, understand the interest rate, and ace the loan process.
Bonus: Increase your low-interest rate chances with these helpful tips to build credit and a guide to improve credit score.
The general rule is to save for at least 20% if you can afford it because any lower than this will likely cause you to pay more at closing.
Another advantage is that you might even get an interest rate discount from your lender with this percentage.
Here’s what you should ask your lender regarding the down payment:
The best way is to be clear up front about everything to not suffer at the end.
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Asking this question straight up is the best tip to get a better rate.
Your lender should tell you all the details and factors in deciding your interest rate and annual percentage rate (APR).
APR is usually higher than the interest rate as it also covers the closing fee. But, the higher the gap between both rates, the higher the lender is charging you.
Tip: Confirm with your lender if your loan includes APR discount points. Expect a ‘No’ as it’s always better to decide that later in your loan period.
You’ve found the right lender, loan type, and perfectly affordable interest rate. So, the next thing you should do is lock it all up.
As you know, the loan market is constantly updating and thus causing the interest rates to fluctuate often.
So, if you’ve managed to get a low quote on your mortgage, make sure to talk with your lender to lock the payment. Here’s what you need to ask:
And, it’s better safe than sorry so, being prepared beforehand is always a good idea.
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Ask your lender about the loan estimate and the closing fees before signing the contract. It is also good to know if any documents are required for a successful closing.
These are the things you should ask at the time of application to know what you’re getting yourself into. Here’s what you need to know:
Although every fee, document submission, and other loan details are mentioned on the signing, sometimes, there might be additional expenses you are unaware of.
These are some of the additional fees you should know before loan contract signing. Of course, not everyone is a credit or finance expert who knows all the questions and answers.
Still, you can learn some standard things for your better loan approval chances.
You’ve read out everything you needed to know before contacting your lender for a better loan understanding.
However, there are also things you should avoid saying to your lender because they might become the cause of your loan rejection.
So, to avoid that very case, let’s read things to avoid saying to your lenders:
Bottom Line
Choosing the lender and creating your loan application can become easy if you know the basics of the process.
Knowing the questions to ask your lender and understanding the answers to expect can help you negotiate the prices and help your payment case.
So, give this guide a thorough read and talk to your lender with confidence!