10 Questions to Ask Your NJ Real Estate Mortgage Lender

What to ask in order to get the NJ Real Estate loan that’s best for you

When shopping for a mortgage loan for your NJ Real Estate purchase, the best thing to do is obtain multiple quotes from various lenders and compare them. You can do this either by contacting them directly by phone or comparison shop yourself on the internet. An important rule to remember is to look beyond the mortgage interest rate to find the best loan and examine the actual terms of the loan. Once you have selected the right lender for your purchase, here are ten key questions to ask prior to completing the loan application:

1. What would my interest rate be?

You will need to know the rate being offered to you in order to determine what your total payment would be. Rates fluctuate significantly and things such as a less than satisfactory credit rating can negatively impact the rate you may receive. In order to effectively compare the various types of programs, you will need to find out the annual percentage rate, or APR, of the mortgage interest which includes the lenders’ fees and is typically higher than the primary quote.

2. How long does it take to process my application?

The length of time to process a mortgage loan application depends on a number of factors including how fast the lender can obtain your credit report, verification of bank account and employment information and an appraisal on the NJ Real Estate property. The typical processing time is approximately 45 to 60 days.

3. What documentation do I need to provide?

Generally, lenders require proof of income and assets in order to obtain a mortgage loan. This can vary from lender to lender as some may request more information from the applicant.

4. What are the qualifying guidelines for the loan?

The specific guidelines which you will need in order to qualify for the loan include income, assets and liabilities, credit history and employment. Bear in mind that many government-sponsored loans and NJ Real Estate first-time home buyer programs have much less stringent guidelines.

5. What is my required minimum down payment?

Loan rates and terms vary depending on the amount of your down payment, which is typically 3 to 20 percent of the purchase price. You will want to put down the most money possible in order to avoid having to purchase private mortgage insurance, or PMI.

6. How much will my closing costs be?

As mortgage loans are associated with a list of fees charged by the lender and other involved NJ Real Estate parties, you will want to know what those incurred costs will be as soon as possible. Within three days of the loan application receipt, your lender should provide you with a list of estimated closing costs, also referred to as a ‘good faith estimate.'

7. What are loan points or origination fees?

Points are mortgage interest that is prepaid. In order to get a lower interest rate on your mortgage loan, you might be required to pay points at the time of closing on the NJ Real Estate.

8. Is there a prepayment penalty on my mortgage loan?

Some loans have prepayment penalties ranging from 1 percent of the loan amount, six months interest or when you sell the home. You should inquire regarding how long the penalty period would be and how the fee is calculated.

9. Can I lock in my interest rate and what is the cost?

It is smart to lock in your interest rate prior to closing on your NJ Real Estate home as rates fluctuate significantly. It is important to ask your lender if this is possible and if so, what costs are associated with doing so.

10. What factors can postpone my loan’s approval?

Certain issues such as credit difficulties can hinder the approval process of your loan. Otherwise, if you have submitted all necessary paperwork and your information is accurate, the process should go smoothly.