Part of the home buying process for many people is to obtain financing from a mortgage lender. Many home buyers tend use the mortgage lender recommended by their real estate agent without doing any research. Doing so doesn’t mean you’ll get the best interest rate or even a qualified professional that understands your loan needs. When you are considering mortgage professionals in Omaha, Nebraska, it’s best to talk to them about their loan options. Here are five questions to ask your mortgage professional.
What types of mortgages do you offer?
The types of mortgages offered will differ from lender to lender. It’s important to understand your needs and qualifications for different types of loan programs. Discuss with your Omaha mortgage brokers which programs you qualify for and which type of mortgage is best suited to your needs. Some examples of mortgages are FHA, VA, Fixed-rate, Adjustable-rate, Reverse, and Jumbo loans.
What is the difference between a pre-qualification and a pre-approval for me?
When you are interested in buying a home, you need to have an idea of what you can afford. A pre-qualification is a document from the mortgage professional in Omaha that indicates what monthly mortgage payment you can afford. Once you are ready to make an offer on a home, you can obtain a pre-approval from the mortgage lender stating that they have verified through bank statements, pay stubs and credit reports that you are qualified to obtain a full loan for a specified amount.
What options do I have for an Annual Percentage Rate and interest rate?
The annual percentage rate (APR) is the amount of interest that you will pay annually, averaged for the full term of the loan. The interest rate is the current rate for borrowing money. The difference is the annual percentage rate is a more accurate estimation of the interest rate you’ll pay on your loan because it figures in the closing costs and lenders fees that are required to finance the loan. A lower APR will translate to a lower mortgage payment. However, a higher APR could mean lower closing costs and fees.
What are the closing costs?
At the time of closing, be prepared to pay some one-time fees. These costs include loan origination fees, discount points, appraisal costs and other miscellaneous costs associated with the loan. These fees, or points, reduce your interest rate by 1 percentage point. If you do not wish to pay these costs at closing, you can discuss this with your Omaha mortgage broker who may be able to adjust your interest rate to wave the fees.
Do I have to have Private Mortgage Insurance?
With a conventional loan, if you put less than 20% as a down payment, you will be required to pay for private mortgage insurance (PMI). This fee is usually included in your monthly mortgage payment. Once the loan-to-value is at 80% or below, your PMI will drop off.
Steph, The Mortgage Genie has been the trusted mortgage lender in Omaha for over ten years. Working for Fairway Independent Mortgage Corporation, who has been dedicated to providing unparalleled customer service since being founded, has given Steph the opportunity to provide excellent service as well as competitive mortgage products for all her clients. If you are ready to start the home buying process, contact Steph today.