Questions to ask when obtaining a loan

  Questions to ask lenders before you get a loan

When working with a lender you should keep several important things in mind...

1. How much will it cost to close the loan? 
2. When do I receive a GOOD FAITH ESTIMATE? http://www.hud.gov/offices/hsg/ramh/res/gfestimate.pdf  This link is an example "Good Faith Estimate Form".
3. Does the lender charge discount points or an origination fee?  (This could be important for tax purposes)
4. What is my interest rate?
5. Does my interest rate fluctuate over time (fixed)? 
6. Is there a penalty for paying off the loan sooner than the pay-off date?  How long is that penalty enforced?
7. Do my payments go to principle and interest?
   1. Do I have the option to pay more principle if I choose
   2. What methods of payments are accepted (Check, Internet, Phone, Are there fee’s)
8. Are Property Tax and Insurance included in my payments?

If you plan on less than 20% of a down payment you will also need to ask…

1. Will I have more than one loan?
   1. Would 2 loans be more advantageous?
2. What will the interest rate of both loans be?
3. Will I have PMI (Private Mortgage Insurance)?
   1. If I do have PMI;
      1.  how much will it be? 
      2. Is it tax deductible? 
4. When I owe less than 80% on the home will the PMI go away?  Will I need to do anything to stop it? 
5. Do I qualify for  (FHA), FHLB Home $tart, Montana Board of Housing (MBOH) or any other assistance programs? 

*Remember your credit score will be negatively affected if you have too many lenders pull your credit score/information