There are a lot of factors you need to consider before applying for a home loan. It can be overwhelming, especially if it’s your first time. You might also have a lot of questions to ask your loan officer.

Do not worry! It is perfectly understandable—even recommended—since being informed is always good for finding your best mortgage. To help you with that, here are some of the common questions about applying for a new mortgage answered. 

What Are the Different Types of Loans?

There are many mortgage loans available, and understanding each one can help you choose which one is the best for you. Most loans depend on the terms available, the special programs they might fall under, and different kinds of rates (fixed or adjustable). Your Loan Officer will discuss each of these loans to give you a thorough understanding. 

You don’t have to be an expert on each loan on the market. All you need is to understand the basics so you can pick one for your situation. Your loan officer can even suggest one for you. 

How Much Do I Need to Have for the Down Payment?

The down payment for your loan depends on the type of loan and special programs you may qualify for. Like we said earlier, each loan is different. It has other terms, so it’s best to contact your Loan Officer. 

The general rule is 20% of the purchase price. There are times when you can put down far less or even nothing at all. Don’t forget to ask about private mortgage insurance, or PMI, which you’ll likely have to pay if you can only afford a down payment of less than 20%. 

What Is My Interest Rate and APR?

Your loan officer will give you a quote so you know what you have to pay each month. It’s also important to lock in your interest rate, so it won’t change. There is a chance that the interest rates might increase after a day or two, so locking them in ensures you get the best rates. Don’t forget to ask for the annual percentage rate, or APR, for your loan. The APR is the annual cost of a loan expressed as a percentage. It factors into fees and other charges.

How Do I Qualify for a Special Program?

To qualify for any special mortgage programs and loan types, your Loan Officer will ask you some questions about your background. This can help them identify if you’re qualified for the job or not. 

Suppose, you want to get a VA home loan. For this type of loan, you will need to pass certain military requirements. Don’t worry; your Loan Officer will fill you in on the requirements for each program. There are also special programs for first-time homebuyers and down payment assistance programs. 

What Homes Can I Afford?

You need to get prequalified to determine the homes you can afford. Consult a Loan Officer before you start looking for a home. This way, you’ll know how much you need and determine what fits your budget. 

Conclusion

Buying a home can affect your financials, which is why people usually get loans. These questions are just some of the common questions people ask their Loan Officer. To get a detailed answer for each of your questions, you need to sit down and talk to your Loan Officer. They can give you a thorough discussion about loans and give expert advice. 

Are you looking for the best loan programs in Louisiana? The Performance Mortgage LLC team is committed to providing clients with the highest quality financial services in the New Orleans and Chalmette areas. Our outstanding mortgage professionals offer lending solutions that are tailored specifically to meet your borrowing needs. Contact our team today!