If you're in the financing stage of buying your first home, there are some things you'll need to know about the loan you're getting. You'll get the best information about the loan by talking to your mortgage broker. In fact, asking questions is the best way to find out everything you can about your new home loan. Here are four things you should find out from your mortgage broker while you're buying your new home.
Know if Your loan is Adjustable
When you're in the process of buying your first home, you may not pay enough attention to the details surrounding your loan. Unfortunately, that means that you might not understand key elements about the loan. One thing that you've got to know is if your loan is adjustable. If it is, your loan is going to change from time to time, meaning your interest rates will go up throughout the life of your loan. If your loan is going to be adjustable, you'll need to know how often the rates will adjust, as well as what the maximum annual adjustment is for the loan. Knowing these details about your adjustable loan will help you budget your finances better.
Understand the Point System
Now that you're buying your first home, you might have heard people talking about points. You might even have people advising you to go for the lowest points possible. Unfortunately, that might not be the best advice you could receive. In fact, it's often better to opt for the higher points, especially since higher points equal lower interest rates. If you want to make sure you get the lowest interest rate possible, talk to your mortgage broker about increasing the points you'll pay.
Get a Complete List of Your Fees
When you're buying your first home, it's easy to focus on the initial cost of the house. However, there are more things to consider than just the cost of the house. When purchasing your first home, you also need to consider all additional fees you'll be paying, such as appraisal costs, inspection costs, escrow fees and title fees. When talking to your mortgage broker, be sure to request a loan estimate. That way, you'll know exactly what you'll be paying for your home.
Ask About Locking In Your Loan
When it comes to buying a home, you want to strike when the interest rates are at their lowest. Unfortunately, interest rates have a habit of fluctuating, which means you could end up with a higher interest rate if you don't act quickly enough. If you're concerned that the interest rates will go up while you're in the process of buying your home, talk to your mortgage broker about locking in the rates. By locking in the rates, you won't need to worry about market fluctuations