Other Costs at Closing/Settlement

• Ask what the total cost of the hazard insurance will be.
• Ask how much your monthly mortgage insurance payment will be when the PMI premium is included.
• Title search/Title insurance
• Estimated prepaid amounts for interest, taxes, hazard insurance, payments to escrow.
• State and local taxes, stamp taxes, transfer taxes
• Flood determination
• Prepaid private mortgage insurance (PMI)
• Surveys and home inspections
• Total Fees and Other Closing/Settlement Cost Estimates

Other Questions and Considerations about the Loan

• Are any of the fees or costs waivable?

Prepayment penalties

• Is there a prepayment penalty?
• If so, how much is it?
• How long does the penalty period last? (for example, 3 years? 5 years?)
• Are extra principal payments allowed?

Lock-ins

• Is the lock-in agreement in writing?
• Is there a fee to lock in?
• When does the lock-in occur--at application, approval, or another time?
• How long will the lock-in last?
• If the rate drops before closing, can you lock in at a lower rate?

If the loan is an adjustable rate mortgage:

• What is the initial rate?
• What is the maximum the rate could be next year?
• What are the rate and payment caps each year and over the life of the loan?
• What is the frequency of rate change and of any changes to the monthly payment?
• What is the index that the lender will use?
• What margin will the lender add to the index?

Credit Life Insurance

• If so, does the lender require credit life insurance as a condition of the loan?
• How much does the credit life insurance cost?
• How much lower would your monthly payment be without the credit life insurance?
• If the lender does not require credit life insurance, and you still want to buy it, what rates can you get from other insurance providers?

For more helpful mortgage tips on mortgage refinancing, home loans, reverse mortgages or a home equity line of credit, contact FreeLoanComparison.com today!

Last update: November 14, 2008