It is very important to understand the process of buying a Bay Area home. When buying a home, you will spend time working with a Danville mortgage broker learning how to budget your finances for your home purchase. This Bay Area mortgage broker will consider such factors as monthly income, monthly expenses, and the affordability of the perfect down payment amount. The role of a mortgage broker is to work hard for both you and your home loan. Here are crucial questions to ask your mortgage broker in order purchase a San Ramon house.

What is the interest rate?

Your Bay Area mortgage broker will offer an interest rate based upon the loan amount and your credit score. The interest rate, along with the mortgage balance and loan term, will determine the monthly payment on your Alamo home purchase. A home loan with a lower balance or lower interest rate will result in a smaller monthly payment. If you would like to improve the interest rates offered, ask your Bay Area mortgage broker about how to enhance your credit score for a lower interest rate.

What is the monthly mortgage payment?

As you develop a budget for purchasing a home, make sure to ask your Bay Area mortgage broker about including homeowner’s insurance and property taxes in your monthly payment calculations. The monthly payment should allow you to comfortably continue to achieve your short-term financial goals and long-term retirement goals. Asking an Alamo mortgage broker to calculate your total monthly housing expenses will help you understand if the home loan payment is right for you and your other financial goals.

Is the mortgage fixed rate or an ARM?

Your San Ramon mortgage broker is an expert on different loan types that will be the best for your Bay Area home purchase situation. A fixed rate loan keeps the same rate for the entire life of the loan. Adjustable rate mortgages, or ARMs, are loans with interest rates that change after a set period or at regular intervals. If you are considering an ARM when purchasing a home, make sure to ask when the rate will change and by how much. Ask your Bay Area mortgage broker how often the rate will change after the initial interest rate adjustment so you can recalculate the monthly mortgage payment to make sure you can afford the higher future rate.

What fees do I have to pay?

Your San Ramon mortgage broker will be able to expertly explain what fees you will pay for purchasing a Bay Area home at the conclusion of the loan process. One-time fees, usually called “points”, are due at closing. For every point you pay on your mortgage loan, the lender will decrease your interest rate by 1%. Consider asking your mortgage broker about the option of paying zero closing fees in exchange for a slightly higher interest rate.

What are the qualifying guidelines for this loan?

Underwriting guidelines and income requirements are different for every Bay Area home loan. It is very important to ask your Alamo mortgage broker what they will need to qualify you for a home purchase loan. Ask for specific details about the amount of funds needed for the down payment and closing costs, what is needed to establish proof of income, and the amount of reserves required in order to be qualified for your home purchase.