When thinking about taking out a home loan, here are some of the questions you might want to ask the loan officer:
- Are both fixed and adjustable-rate loans available?
- What is the Interest Rate?
- What is the total origination charge?
- How long can I lock in financing at the current interest rate?
- What are the other fees the lender may charge me in conjunction with my loan?
- Are funds for a second mortgage available?
- On adjustable loans: How often will the interest rate adjust? Is there a maximum limit on each rate change? Is their a ceiling on payment adjustments? Can the term of the loan be extended?
- Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity.
- What is the grace period? How late can a monthly payment be made before a late fee is assessed?
- If you sell your house, will the buyer be able to assume your mortgage at the same interest rate?
- Do you have to pay points to get your new mortgage? Usually the lender charges points to lower the interest rate of a mortgage loan.
- Will the lender require mortgage insurance? If so, can you stop paying it as soon as you have enough equity or is there a time period when it will be required regardless of your equity? For example, will you have to pay for mortgage insurance for the first five years, regardless.
Here are a couple of useful article that provide some additional information about the financing process and discount points.
FHLBank Pittsburgh