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Your Guide to Buying a Home

Everything you need to know to buy a home without an agent.

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Questions to Ask a Lender

When you are talking to lenders, there are a lot of questions that can help guide your conversation. These are some questions to ask to help you learn about your options as well as help you compare lenders. A really good lender will help you understand what you can afford, what you can do to improve your situation or save you money, and the “break-even” point for paying down the interest rate. 

  1. How much can I borrow for a mortgage?
  2. How much will I need to put down as a down payment?
  3. Do I qualify for any programs? Veterans, FHA, first-time home buyer, local programs?
  4. Will I need to pay PMI (Private Mortgage Insurance)?
  5. What would a couple of scenarios look like for closing costs and my monthly payments based on a home that costs approximately $____________?

  6. Are interest rates trending up or down? Should I lock in my rate today or watch it?

  7. If I lock in my interest rate today, how long will it be valid for?

  8. If I pay an extra point for a better interest rate, how long will it take to break even on that decision?
    The idea here is that you want to know if you pay like $10,000 towards getting a 0.4% lower interest rate, how many months does it take before you break even on this buy-down? If the answer is less than 3 years, then it may be worth paying this for a lower rate. If the answer is 10 years, then you probably would not spend the money getting a lower rate. 
    You also want to consider if you would be better off refinancing in a couple of years as opposed to paying more up front for a lower rate. A good lender will have a discussion with you on these points.

  9. Are you available evenings/weekends if I need a quick pre-approval letter for an offer?

  10. What else do I need to know?

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