10 Things To Know Before You Accept A Mortgage Quote
The Basics
If you accept your mortgage quote, it becomes the binding document that either means you keep your house or you lose it. If you break your mortgage and don’t pay your monthly payments, you will lose your home. But if you pay your mortgage on time or even ahead of schedule, it can be a great part of financial growth.
Lender Fees
Outside of your down payment, lender fees are some of the fees you’ll pay along with your mortgage or up front. Lender fees include but are not limited to: an appraisal fee by your lender, an application fee of about $250, and a $50 credit report fee.
Closing Fees
Closing fees are the fees you’ll need to pay in order to close on your mortgage. Closing fees include but are not limited to: legal fees if you hired an attorney, property taxes, title insurance of several hundred dollars, notary expenses, and homeowner’s insurance which is required by many lenders before you can purchase property.
Will You Get A Tax Break?
There’s no real “tax break” per se when you purchase property or acquire a mortgage loan. However, the interest you pay on your mortgage is deductible on your taxes. You should ask an accountant to help you with income tax deductions on your property.
What If I Change My Mind?
If you accept a mortgage quote, you do have a three day right of refusal. If you change your mind about a mortgage within three days after you sign it, write a letter to your lender to that regard and make sure they have it within those three days.
Fixed Rate Or Variable Rate Interest
Fixed-rate mortgages have interest rates that are exactly the same throughout the entire life of your mortgage. Variable-rate mortgages have interest rates that change based on what the current interest rate is. If you are acquiring your mortgage at a time when interest rates are exceptionally low, it is wise to acquire a fixed-rate mortgage. Then, your mortgage payment will be about the same each month. If interest rates are high and they’ll likely go down, you’ll want to acquire a variable-rate mortgage. In this case, your mortgage payment will fluctuate from time to time.
Is It The Best Deal?
When comparing various mortgage quotes, look at the terms of the loan along with the interest rate and monthly payments. Make sure you’re comparing apples to apples when you compare your quotes. Consult with your realtor, broker, or another expert to help you make sure you’re getting the best-possible deal.
Are You Being Overcharged?
Get a list of all the fees you’ll be charged for the loan at least a few days in advance of closing. Make sure you look closely at each charge and question why it’s there. Make sure the fees you’re charged don’t look like they’re higher than they should be or were promised that they would be.
The Bait-and-Switch
Many lenders will promise you an extraordinarily low interest rate or a low monthly payment in order to get you in the door. Then when you find out what your credit score is, all of a sudden you owe a lot more. Don’t stick with a lender or broker who makes all kinds of promises up front but can’t keep them. There are other lenders out there who are reputable—even for people with poor credit.
Don’t Be Pressured
Don’t let anyone pressure you into making a quick decision. Think things through, bring the document home to read and show to others you trust. Take your time. A good lender will work with you under your schedule to make sure you feel comfortable and are getting the best-possible deal.
