Applying for a condo loan can be quite a daunting prospect. Therefore, any applicant should be well prepared, do necessary due diligence and ask the right questions in advance when discussing the loan options with the lender. Although many questions can be asked, there are some basic issues you should clarify with the lender before any loan agreement is signed.
Purchasing property is a wise decision, especially if you’re looking for Acqua Vista condos for sale in San Diego, CA, but one that should not be taken lightly. Double-checking and ensuring you’ve made the right choice of lender will give you peace of mind in the long run.
Even before starting your inquiries about the loan, you should ask yourself if you’re looking for a condo, a house, and what you can afford. Therefore, the first step should be to try to obtain a pre-qualification for a mortgage loan.
When contacting a lender, ask for a pre-qualification. Then, the lender will start the process that includes providing your personal financial information. They will assess your credit score, employment history, and income, set your credit score, and determine the amount you can borrow.
After these clarifications, you should check the type of home loan that best suits your needs. In this phase, you must ask the lender to provide you with a range of available mortgage loans and make some recommendations for loans based on your pre-qualifications. These loans can range from standard down payment mortgage programs, such as a 30-year fixed-rate mortgage (which is the most popular type of home loan) to 20-year fixed-rate mortgages that offer a potentially lower interest rate in return for a shorter loan repayment term. Other types of loans include:
home buyer access programs, Federal Housing Authority (FHA) loans, loans for veterans, and loans for rural properties.
The next question should be how much down payment is needed. Lenders aim at high down payments (up to 20%), but this does not always happen. Some qualified clients can find mortgages with down payments as little as 3% or even without any down payment at all.
What follows is the payment interest rate that will determine what your monthly mortgage payment will be based on. This is linked to the fundamental question of the annual percentage rate. APR is the yearly cost of a loan to a borrower, including fees. It is of the utmost importance to know the APR. It includes other charges or fees such as mortgage insurance, closing costs, discount points, and loan origination fees.
The question which is often the key to the whole arrangement is the monthly mortgage payment, and you will need to ask the lender for a clear answer to this question. This is coupled with issues such as prepayment penalties if you pay off the mortgage early, in case of moving or refinancing the mortgage. Any envisaged penalty should not be accepted.
Finally, you must ask all the right questions related to the lender’s fees. What is the extent of the origination fee that provides additional profit for the lender beyond the interest rate. Ask them to specify all the lender fees and additional costs you will have to pay at closing. These costs should be dealt with in detail in your official Loan Estimate document and Closing Disclosure, but it is always better to know about them as much in advance as possible. This way, you’ll be able to compare the various offers and find the one that’s perfect for you.
If you’ve decided to move into a new and sleek condo in Acqua Vista, or another property in Little Italy, contact Neuman & Neuman! With four decades of experience in the real estate industry, we know all the market ins and outs.
Want to know what to ask a lender before applying for a loan or looking for expert advice in your new home search? Our team of pros will answer all your questions with regards to the San Diego real estate market. So reach out today, and let’s set up an appointment!
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