All over the world, a lot of people have jeopardized their future through mortgaging. Some are homeless today, while some can't even provide a mere square meal for themselves. This is because they have little or no knowledge about the risks that are involved in mortgaging. Here are five questions to ask before applying for a mortgage.
1. Will my income rate be sufficient enough to apply for a mortgage?
This question is something you must consider before you seek a legal loan from any bank or otherwise. This implies that that you need to know the rate of your income, how often it comes and if it can be able to meet up with the stipulated time the mortgage will come to an end.
2. What is the interest rate of the mortgage?
This is very important to every mortgagee. It is important that you know the rate of interest that is being required from you at the time of expiration of the mortgage. Sometimes people don't consider this, and are hoping to pay back the exact amount of the loan. Knowing this enables you to find out that your income will not be able to meet up with both the mortgage and the interest attached to it.
3. How long will it take to process the mortgage, and what possible delay might I expect?
The answer may vary. There could be delays because you're missing information from your application or providing details on something specific. Sometimes it could be that you are missing information from your application or didn't details on something specific.
4. Would there be an origination point and discount, if yes what could it be?
Some lenders or mortgagors usually charge prepaid mortgage interest points, which helps to lower the rate in mortgage. It is now left to you to find out what the charging interest would be before you agree to its terms. This is because some of the lenders could be mischievous in the sense that they won't communicate with you the exact terms of the interest.
5. What is the legal backup guiding the law of mortgage?
Before the loan is made, this question should be well considered by having the knowledge that such loan is backed up by law that helps you to recover every loss you must have encountered during the transaction especially if entered by duress (i.e., an agreement you were made to enter by force). After this, you have to consider the mentality of the person you are entering into mortgage with, by considering if he or she is a person of sound mind and not acting under the influence of alcohol and otherwise.
The answers to these questions will help you to know and consider the type of mortgage you will involved in without making any mistakes.