Shopping For a Mortgage – Top Questions to Ask
When shopping for a mortgage, it is important to ask the right questions due to current economic environment. It is not simple to acquire loan or mortgage instead it offers various complications and issue. Prior to apply for a mortgage, you should make sure to have a right knowledge or information. The key factors to understand and know include interest rate, repayment plan and size of mortgage. Some factors also affect the value of interest rate like credit score, bank statement and background of debtor. The most important questions related to mortgage are discussed below.
1. Can I get mortgage insurance?
The use of mortgage or loan insurance is of prime importance for you. Some lenders also offer loan insurance as an extra when you get mortgage. There are certain types of mortgage insurance like illness insurance, disability insurance and job loss insurance. It is recommended to get mortgage insurance because you can face unexpected ailments and injuries later in life. When you buy this insurance package, you can make loan repayments safe and secure.
2. Is the mortgage portable?
Make sure that your mortgage or loan is portable or assumable. In case of portable loan, you can enjoy flexibility and extra benefits. You can manage to make your home more attractive. You can also sell out your house only if your mortgage is portable. Hence, prior to sign the mortgage agreement, you should ask lender about type of loan.
3. What is the value of mortgage penalty?
In case of delay in loan repayments, you can experience penalty and economical loss. Different lenders and firms use different methods to calculate the value of mortgage penalty. Hence, it is necessary to ask about value of loan penalty in advance. You can use Mortgage Penalty Calculator to find the accurate figures.
4. Is interest rate variable or fixed?
Some lenders offer fixed interest rate but you can also avail variable interest rate. Both variable and fixed interest rate has some pros and cons. You can discuss about it with your mortgage professional. You should choose or select the option that suits your basic needs or requirements very well. If you are not comfortable with conditions, you can ask the lender to modify loan terms.
5. Can I make extra repayments? What is the process?
If you have sufficient funds available, you can do extra repayments in such conditions. You need to confirm whether you can do extra payments or not. Some lenders offer this option but others not. Lenders also offer lower interest rate when debtors make extra repayments. Your mortgage professional will guide you about the process of extra loan repayments.
6. Is mortgage protected or not?
Make sure to choose only protected mortgage or loan. After the end of your term, the value of interest rate may increase or decrease. In order to avoid from this issue, you should protect your mortgage. It is wise to have a plan to which help you combat inflation in a better way.
