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Everything You Should Know About Private Mortgage Lender

Rick Smith
Everything You Should Know About Private Mortgage Lender

Planning to hire private mortgage lenders in Saskatchewan? If you are a first-time home buyer, you might be wondering what questions you should ask while hiring private mortgage lenders near me.

This article points out the most essential questions you should ask your mortgage lender to ensure the deal is perfect!

What Types of Mortgage Terms Do They Offer?

Well, there is not a single type of mortgage loan. There are multiple programs and you don’t know which one would be right for you! Hence, it's crucial to discuss all the options with your mortgage lender. Make sure to ask your mortgage lender about the various types of loans:

Traditional Fixed-Rate Mortgage

A 30-year long fixed rate loan is the most common type of mortgage loan. Since the term is quite longer monthly payments are lower. Well, the best part is the interest rate and fixed means would remain the same throughout the life of the loan. However, for longer terms, you need to pay more interest. Hence, if you can afford a higher monthly payment it is better to choose 15-20 years’ term.

Adjustable Rate Mortgage

The interest rate of an adjustable-rate mortgage would change over the life of the loan. In case you opt for an adjustable-rate mortgage the interest rate would increase and decrease based on the market fluctuation. Hence, the mortgage payment would be different every month which can make your monthly budgeting very challenging. Thanks to extended limit features that ensure the interest rate and monthly payment can increase both periodically.

FHA Loans

Borrowers with lower credit scores can opt for a Federal Housing Administration mortgage. FHA loans come with several restrictions and it can limit how much money you can borrow. In addition, you have to pay a mortgage insurance premium.

What is the Credit Qualification?

Credit score refers to the three-digit number that indicates to the lenders how likely they would be able to pay back the money. If you have a higher credit score you are likely to get the mortgage loan easily. Each lender has their set of standards to qualify for the specific mortgage amount. In case, you have a good credit score you can ask the lender whether there is any special offer or lower interest rate.

Do They Offer Any Mortgage Rate Lock?

Mortgage rate lock refers to the agreement between you and your lender that indicate the interest rate would stay the same until closing in spite of the market movement. A rate lock is very crucial since they keep the loan cost predictable.

Wrapping Up

You must ask private mortgage lenders in Saskatchewan about the rate locks and the interest rates. Lenders essentially drop the interest rate if the market rate decreases. 

Rick Smith
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