Buying one’s own dream house is the dream of every individual whether one comes from a low, medium, or higher income group. Earlier the dream could not be lived on due to the financial crunches and inability to be able to arrange such a big amount in one go. However, with the introduction of multiple government and non-government oriented mortgage loan schemes, it is now very easy to buy a house on your own with a little aid from these loans. There are multiple home loans being offered by the Federal government and non-government aided loan schemes, too such as the FHA home loans, VA home loans, etc. VA loans are specifically for the defence veterans and their surviving families.

However, one needs to first understand their working, the interest rates associated, the pros and cons and specially the points of evaluation based on which you can evaluate your lender and the lending program.

Let us look over how to evaluate your lender and the set of favourable questions to ask them for a better evaluation and selection.

Questions to ask your lender

Here are a set of few helpful questions to ask your lender company to identify if they can be your most trusted mortgage company or not.

  1. What amount of loan can you borrow from your lender?

This should be your first question to understand what can be the maximum amount of loan you can borrow from your lender.

  1. What would be the required down payment?

As advisable, the down payment should always be approx. 20% of the loan amount however to make sure your financial obligations are fulfilled and taken care of, discuss about the required down payment.

  1. Does your loan program qualify for down payment assistance program?

There are few loan facilities that qualify for down payment assistance program. VHA and FHA loans do have such facilities. Ask relevant queries to clarify on the same.

  1. What will be the difference between the fixed-rate and adjustable rate mortgage?

Fixed rate loans hold a fixed rate throughout, while the adjustable mortgages offer fluctuating interest rates. It is always advisable to evaluate your loan options and choose the one that is less burdening on your financial side.

  1. What will be the interest rate?

The interest rate levied on your loan is the game changer. Make sure to know what interest rate your lender is applying on your loan. This will change your closing amount, as well. So, make sure you have clarified on the same, in advance.

  1. When can you lock-in the interest rate on your loan?

Interest rate fluctuations are a part and parcel of your loan. However, make sure to ask your lender what can be the lock-in period and rate at which you can lock in the interest rate.

  1. Are there any hidden or variable costs involved?

Many lenders keep a few hidden or variable costs involved with the processing fees for your loan. Make sure to discuss about any such cost involved, in advance. Ask for the Closing Disclosure, this will help you estimate the amount and keep away from having to pay any unwanted costs, towards the beginning or the end. Ask for all kinds of costs involved including- property taxes, mortgage interest, homeowner’s insurance, etc. in advance.

  1. What will the overall estimated closing cost for your loan?

You should understand that any type of loan facility would include multiple costs involved in it, including costs like- appraisal fees, origination fees, attorney fees, etc. Your closing cost will include all of these, so make sure you are aware of the same and get to know the overall estimated closing cost, you will have to pay and make your budget accordingly.

  1. What will be the estimated tenure for closing your loan cycle?

Even though the tenure of your loan will depend upon multiple factors, however, it is very important to know the estimated tenure to complete the closing of your loan. Make sure to keep your documentation updated by being in touch with your lender at all time frames. Even having a rough idea of your loan tenure will help you plan things in a better manner.

Using these questions, you can find the most trusted mortgage company to get your mortgage loan for buying your dream house.