Smart Questions Safer Loans

Buying a new home can come with a lot of questions and decisions, so it’s important to make the right choices. With a variety of mortgage scams out there, here are four questions to ask yourself before locking down a loan—keeping you and your new place safe leading up to closing day.  

Are the interest rates too good to be true?  

It’s typically a red flag when the mortgage rates being offered seem noticeably lower than market interest rates. This could mean there are various hidden fees. The lender might come back later, saying you no longer qualify for that rate or even tack on extra fees after locking in the original rate.  

Are they saying my credit score doesn’t matter? 

Even though some loan programs don’t require a high credit score, that doesn’t mean your credit score doesn’t matter. If you’re told your credit score won’t affect your mortgage, don’t fall for it!  That could spell out undesirable terms, and it’s sometimes used to prey on low-income borrowers.  

Does my lender know my budget? 

No, it’s not really your mortgage company’s job to come up with your household budget, but your lender should still know about your financial situation. If they don’t ask any questions about your finances or even your monthly income, then it’s probably not someone you want handling your home purchase. 

Will I be penalized for paying off my loan early? 

For some loans, your lender can charge a penalty if you pay off your loan “too soon.” These are called prepayment penalties, and although they can offer lower overall interest rates, you’ll want to make sure they aren’t hidden in the fine print. Be sure to ask your lender about the prepayment stipulations before agreeing to a loan.  

With an important process like buying a new home, it’s worth taking extra caution when picking your lender. Asking yourself these questions ahead of time can help save you from mortgage headaches later on.  

If you have questions or are ready to talk with a trusted loan officer, connect with one near you today!  

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.