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Getting a Mortgage: Make Sure You Ask These Questions

A lot of people are having trouble finding a mortgage these days. But don’t let the difficulty of the search affect the quality of your search. FiLife put together a list of questions you need to ask when shopping for a mortgage. Even better, we outlined the answers you want to hear.

Mortgage Grilling Guide

Does the rate you’re quoting me include any points?
You’ll have to run the numbers yourself to see if it’s worth it, but you should know if points are involved right at the beginning of this process.

Is there a prepayment penalty if, at any time, I decide to make a larger-than-usual payment?
There really shouldn’t be. Don’t get a mortgage that has one.

How long can I lock in my interest rate while waiting to close on my home purchase?
30 to 60 days is the norm.

How much does it cost to extend the lock-in period?
It depends: Some lenders charge a flat fee, others use a percentage of the loan. Either way, negotiate. Many lenders will extend for a few days for free. If you need more time, the fee should be a small fraction of a percentage of your loan, like .125% or a couple of hundred dollars.

Do I have to have homeowner’s insurance in order to get this loan?
Most lenders will require you to get homeowners insurance in order for them to grant you a loan. For their purposes, your insurance policy only has to be big enough to cover the cost of the mortgage (after all, they don’t care about your home, they just want to protect their investment). You should get more coverage than that, though—enough to rebuild your home if were destroyed. You can, and should, shop for homeowners insurance on your own. Check out this guide to learn more about it.

Read the rest of our Grilling Guide here. Or if you have a specific question of your own, talk to our mortgage guru Steve Heideman.

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