4 Questions for Homebuyers to Ask a Mortgage Lender  

Navigating the terrain of home buying, particularly for first time buyers, can be both an exciting and a nerve-wrecking journey. It’s a process that requires a lot of research and a good understanding of the process. To help you feel comfortable and confident, ask your mortgage lender these four questions when you buy your first home.

Questions to ask a mortgage lender at Clark County Credit Union in Las Vegas, NV

Question #1: What Types of Mortgages are Available for First Time Homebuyers?

Depending on your homeownership goals, there are a variety of mortgage loans out there and each one has its benefits, eligibility criteria and down payment requirements. Asking this question at the beginning of your homebuying journey can help you understand the options available and receive guidance on the best mortgage loan that fits your needs and financial situation.

Question #2: What is the Interest Rate and Annual Percentage Rate (APR)?

The interest rate is one of the most crucial parts of your mortgage loan as this can determine your:

  • Loan terms – Some common loan terms are 15 to 30 years. For example, if you decide to choose a 15-year loan term then your loan should be paid off within 15 years. You can also choose a fixed or adjustable interest rate mortgage.
  • Monthly payment – The interest rate directly impacts your mortgage payments. A lower interest rate would give you lower monthly payments, giving you extra room in your budget.
  • Cost of borrowing – This refers to the total amount of money you pay to borrow funds for your home purchase. In addition to the principal amount borrowed, this includes the interest charged by your lender over the term of the loan.

The APR is the cost to borrow money as a yearly percentage. It's a more complete measure of a loan's cost than the interest rate alone. It includes the interest rate plus discount points and other fees. It’s essential to understand these terms so when you go over the interest rates with your lender, you’re comfortable with the mortgage you’ll pay.

Question #3: What are the Down Payment Requirements?

Down payment requirements will vary depending on which mortgage loan you obtain. For example, if you are eligible for a first-time homebuyer loan, your downpayment can be as little as three percent, while others may require more. Clarifying this with your mortgage lenders can help you save for a downpayment.

Question #4: What are the Closing Costs?

Closing costs refer to the fees and expenses associated with finalizing your home purchase and obtaining a mortgage. This typically covers appraisal fees, property taxes, and other fees that the seller or lender will require you to pay. That’s why saving at least two to five percent of the home purchase is necessary.

In Nevada, closing costs for a home purchase is estimated around $6,383 or 1.5% of the average home sale price. 

Conclusion

With these questions to ask a mortgage lender, you gain a clearer understanding of the homebuying process, the mortgage and closing costs so that you can plan your finances for one of the biggest investments in your life.

CCCU’s Mortgage Team is here to answer any questions about homebuying and mortgages. They will work closely with you to determine what makes the most sense based on your financial goals. To get in touch with our Mortgage Team, please visit www.ccculv.org or call us at 702-228-2228 Option 1.