December 27, 2023
First time home buyers often have plenty of questions to ask a lender. Below we examine some of the key issues to consider when you compare financial institutions.
Shop Around For A Lender And The Right Loan
Compare three lenders (more is better) and don’t shortchange yourself when you start the process of shopping around for the right lender. It’s better to take more time and find the right match for you. Remember, you don’t have to use your current lender even if you have other loans with them.
Ask About FHA Loan Rates and Terms
You want to know these long before you make offer on a house. You’ll want to get an early sense for how much your loan may cost so you can plan your loan.
Ask About Your Home Loan Options
Do you have the option to choose between a 15-year and 30-year loan term? Are there any penalties to consider? What about the length of that lender’s grace period, policies on prepaying or paying extra on the mortgage, etc.
Ask Your FHA Lender About Loan Fees
Every lender has a fee schedule or list. Your lender’s fees may differ than others so ask which fees may apply to your transaction. It’s also smart to ask about alternatives to such fees and when the fees are due in full.
Adjustable Rate Mortgages
An adjustable rate mortgage, sometimes referred to as an ARM loan, may help make up some of the costs of buying a home with a high interest rate.
You might not be interested in applying for FHA ARM, but you should definitely ask the lender whether the loan they are offering you is an FHA fixed rate loan or an FHA adjustable rate mortgage.
Ask About First-Time Home Buyer Perks
If you are a first time home buyer don’t overlook perks that may apply to you based on your status. Ask lenders what options or benefits might be open to you as a new buyer and don’t neglect local first-time home buyer programs offered by state or city government.
Ask For Input
Don’t forget to ask real estate agents or other third parties about their experience with local mortgage-related services including good lenders.
Shopping around for an FHA loan means gathering information and “intel” on lenders, appraisers, and more. You definitely want to know what other professionals think of their peers in the market and the industry.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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