4 Questions To Ask Your Financial Institution When Applying For A Home Loan

If you're like most people, you'll have to apply for a loan in order to purchase a home of your own. Here are a few important questions that you should ask your financial institution before you have them draw up the loan paperwork:

Can the Interest Rates Be Locked In?

One important question to ask your financial institution before you start the paperwork for a home loan is whether the interest rates you're being offered can be locked in. If not, your interest rates may change over time. And while changing interest rates could mean that you'll pay less than initially agreed to at some point in the future, it could also easily result in having to pay more in order to fulfill your mortgage terms. So if you want to avoid unwanted financial surprises as you're paying your home loan off, make sure that your interest rates will be locked in for the entirety of your mortgage term.

Are Early Payment Penalties Applicable?

There may be times when you can afford to pay more than your monthly mortgage payment back to the bank, but some loans may come with terms that require you pay a penalty fee for making a payment early or paying more than your mortgage amount in any given month. If you have to pay a penalty fee every time you make an early payment, it could add up quickly and negate your effort to save some money on your home loan in the first place.

Are Service Fees and Taxes Included in Payments?

It's also a good idea to find out whether any service fees and taxes you'll be paying for your home loan will be included in your monthly payments. If not, it's important to find out how those fees and taxes will be charged so you know exactly what you can expect in the coming years. Will you be charged quarterly, yearly, or in one lump sum that's payable anytime during the life of your home loan? If you don't know what to expect, you may find it hard to budget for the service fees and taxes when you're charged for them, which could lead to problems with fulfilling your mortgage terms before all is said and done.

Add these questions to a list of your own and bring it with you when meeting with your financial institution so you can remember all of the important points and easily take notes as necessary.

For more information, you will want to contact a company such as FCCU - First Community Credit Union.

About Me

Learning About The Importance of Financing

Hello, my name is Bernard Willis. Welcome. I am excited to help everyone understand the importance of loan and financing availability in every market. When it came time to acquire housing, I was stuck between renting and purchasing my first home. I decided to forge ahead with the loan application process to acquire financing for my home purchase. Unfortunately, I found the process confusing and frustrating at first. Through the weeks, I dedicated my time to learning all I could about all types of financing. I created this site to share that knowledge with all my valued readers. Visit anytime to learn more.



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