Ten Questions Most Lenders will Ask You

Unless you're prepared, applying for a mortgage loan can be something like going into a strange supermarket without a shopping list or your wallet... bewildering, time-wasting and frustrating!

Here's the information most lenders will need to know:

1. The amount of money you wish to borrow and the length of time you will need the money.
2. Your current address and, if you've been at your present address less than two years, your previous address.
3. Your social security number.
4. Your present employer's address and, if you've been at your present job less than two years, your former employer's address.
5. Your gross monthly income.
6. Your bank account numbers and your approximate balances.
7. Your assets (real estate, personal property, paid-up life insurance, etc.).
8. A complete list of your debts, with account numbers.
9. A copy of the purchase agreement for your new home.
10. An account, in writing, of any problems concerning your loan application.

1. Verify the facts.
2. Get a credit report.
3. Make a property appraisal.
4. Review your application.
5. Decide whether or not to make the loan.

Questions You Should Ask Most Lenders

1. Are both fixed-rate and adjustable mortgage loans available?
2. What is the interest rate?
3. What are the"points"?
4. How long can I"lock-in"the financing at the current interest rate?
5. What are the other fees a lender may charge me in conjunction with my loan?
6. Are funds for a second mortgage available?
7. On adjustable loans:
   • How often will the interest rate be adjusted?
   • Is there a maximum limit on each rate change?
   • How often will the monthly payment be adjusted?
   • Is there a ceiling on payment adjustments?
   • Can the term of the loan be extended?
   • Is it convertible to fixed?
8. Is there a prepayment penalty clause? (This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early.)
9. Is it an open-end mortgage? (An open-end clause in a mortgage allows you to borrow in the future for home improvements or other purposes, up to the amount of principal you've paid off.)
10. What is the"grace"period? How late can a monthly payment be made before a late charge is assessed? What will happen if a payment is missed?
11. If you sell your house, will the new buyer be able to assume your mortgage at the same interest rate?
12. Are"points"required for obtaining the new mortgage? (Usually lenders charge points for the cost of giving you a mortgage loan. A"point"is 1% of the loan.)
13. Will the lender require mortgage insurance.