Buying a house is a big deal in life. Not only is it emotionally stressful, but it can be financially stressful as well. Many people glance over the mortgage documents but do not take the time to really read them. Even though you may have discussed everything with the mortgage broker, you need to be sure that you completely understand how the loan has to be paid. Just because you agreed to a loan and the payments does not mean that there aren't other stipulations that will make a difference over the years. Here are a few things you need to check so you know exactly what you are agreeing to.
If you are hoping to be able to pay your mortgage off quicker than the stated time, you do not want to have to pay a penalty for making extra payments. You may also decide you can afford to pay a bit extra each month to lower the principle quicker. When you do this, you not only get the loan paid quicker but can substantially reduce the total interest. However, if there is a pre-payment penalty, you might not be saving much.
Before you go to closing, you will be given a closing statement outlining how much money is needed. This will include fees charged, such as title searches and owed property taxes. When your offer was first accepted, you were given a good faith estimate that outlined all you would be responsible for and what the seller will pay. Make sure that you are only charged what you had expected. Then, be sure you have that money available. It may be included in the loan, or you may need to have the cash up front.
Sale of Loan
Sometimes, a mortgage company sells a loan to a different company. While this should not affect the terms of the loan, you need to be aware if the paperwork includes the possibility of a sale. You should also make sure that, if the loan is sold, that you will be notified before the sale and notified of who the new lien holder is or if any new approvals will be needed.
You have the right to know exactly what happens to your mortgage, whether there is an adjustable interest rate, a balloon, or a sale. Do not assume anything, as this is a large amount of money and will be a debt for a considerable amount of time. If you read all the documents, it should not be stressful at all.
Talk to a representative at companies like Attorneys Funding Group Inc for more information.