May 2015

6 Questions To Ask Mortgage Companies In NJ (Or Anywhere)

How do you pick a home loan lender out of a plethora of mortgage companies in NJ or really anywhere?

We have the answer!  Well actually, we have 6 questions you need to ask to get your answer.

Before you decide on one of the many mortgage companies out there, make sure you have your questions ready to ask to see if they will be the perfect fit for you! Remember you are a customer and must feel comfortable with the mortgage lender or mortgage broker.

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1. What is the best loan for me?

The right mortgage company will make sure to find out more information about you before they start suggesting loan options to you. In order to make an informed suggestion the right mortgage company in NJ or anywhere will make sure, they have gathered enough information from you before they suggest a particular loan. Also, do not be afraid to ask questions! They are here to help make things easier for you!

2. NJ Mortgage Rate vs. Annual Percentage Rate?

What’s the difference?

The APR, or annual percentage rate, is derived from a calculation that includes the mortgage rate as well as all the other related mortgage company fees and is then divided by the loan’s term.

Please keep in mind a few things though.

Some mortgage companies do not calculate APR correctly, and there is no way accurately to calculate an APR rate for an adjustable rate loan.

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3. Discount points and origination fees

What are they?

Every “point” is 1 percent of the loan amount you plan on taking out. For example 2 “points” on a $200,000 loan cost $4,000. In addition to points, there are times that mortgage companies in NJ and all over the U.S. will charge origination fees as well as points. Make sure you ask for all of this information upfront, so you are not caught off guard later on!

4. What will all of this cost?

You must keep in mind that there are certain third party vendors fees that must be paid when getting a loan. Some of these fees include the cost of the appraisal, credit report, escrow (where applicable), recording fee’s, lender’s title policy, etc. The LE, or Loan Estimate, will outline all of these closing costs and a mortgage company is required by law to give it to you.

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5. Do you offer Loan Rate Locks?

On a daily basis mortgage interest rates can change, which can make borrowers worried about what will happen to their loan if there is a drastic change in the rates before they close on their new home. Because of this, most borrowers want to “lock their loan” to avoid losing out the interest rate that they desire. Most mortgage companies will charge a zero to one point to lock a loan rate but make sure you ask if there is a charge for a rate lock and for how long will this rate be locked for.

6. How much time will be needed to fund my home mortgage?

The average time it takes to process a loan can take anywhere from 21 to 45 days. In order to properly write a purchase contract, you will need to have a closing date in mind, and that date must be in line with how long your mortgage company needs to close your loan! Make sure to find out what the anticipated turnaround time is and do they see any obstacles that could delay the closing.  

We also have a handy timeline guide that details what to expect during the homebuying process that’s easy to understand.

Always remember to speak with a Home Loan Advisor who will sit with you and answer all of your questions. 

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