Do you fancy yourself to be a mortgage know-it-all? After all, you’ve been down the mortgage road before, bought a few properties, and think you have a pulse on mortgages and how to secure a competitive one.
Unfortunately, there may be a quite a few things about mortgages you aren’t aware of – things that could cost you big in the long run. Here are a few mortgage trivia questions to keep you on your toes:
True or False: I can figure out my mortgage payment using my interest rate.
False! The cost of your home and the interest rate do not tell the entire story of the mortgage payment for your Houston residence. Instead, look to your loan’s annual percentage rate (APR), which includes not only the interest you will pay on your loan, but the points, the mortgage insurance, and other fees, such as the origination fee on the loan. Further, you will need to factor in the cost of your homeowners insurance policy to get an accurate idea of what you will be paying each month. When shopping for a home loan, it is often best to skip the interest rate and instead look at the loan’s APR, as this will provide you with a more accurate depiction of your mortgage payment.
True or False: Credits reports, appraisals and other fees are the same across the board.
False! No laws exist that require lenders to charge the same amount for such things as credit reports and appraisals. Because of this, it is important to shop around and ask various lenders about their charges for these items. It may also benefit you to ask the lender to waive these charges, as many do to remain more competitive.
True or False: Once I choose a lender to get preapproved, I must stick with that lender for my mortgage.
False! Getting preapproved is never a legally binding contract with a lender. As such, you are never stuck with a lender simply because you received your preapproval through them. In fact, it is always a good idea to shop around and get at least three quotes from three different lenders before deciding on the home loan program that is best for you