My Real Estate Blog

The following are important questions to ask and understand when shopping for a loan.

Interest and Payment

• What are the monthly payments? Can you afford them?
• What is the annual percentage rate (APR) on the loan? The APR is the cost of credit, expressed in a yearly rate. You can use the rate to compare one loan with another.
• Will the interest rate change during the life of the loan? If so, when, how often, and by how much?

Term of Loan

• How many years will you have to repay the loan?
• Is there a balloon payment - a large single payment at the end of the term after a series of low monthly payments? When the balloon payment is due, you must pay the entire amount.

Points and Fees

• What will you have to pay in points and fees? One point equals 1 percent of the loan. Traditional financial institutions normally charge between 1 and 3 percent of the loan amount in points and fees.
• Are any of the application fees refundable, if you don't get the loan?
• How and how much will the lender or broker be paid? Lenders and brokers may charge points or fees that you must pay at closing or add on to your loan, or both.

Penalties

• What is the penalty for late or missed payments?
• What is the penalty if you pay off or refinance the loan early (that is, is there a prepayment penalty)?

You can negotiate with more than one lender. Don't be afraid to make lenders or brokers compete for your business. Let them know you are shopping for the best deal. Ask each to meet - or beat - the terms of the other lender.

Now that you have some facts on shopping for the best loan deal. Do you currently own a home? How much is your home worth? To get a professional appraisal of your home call Boivin Appraisals, Inc. We can make sure you have the facts.

Call 630.624.0142 or visit: www.boivinappraisals.com