For those considering a home equity mortgage and are new to its potential benefits, the best course of action is to speak with an experienced, trusted professional. Knowing exactly what questions to ask is important so that you can get the answers you need and make an informed decision.
Is my Reason for Applying for a Home Equity Mortgage a good one?
The first thing you want to do is disclose why you are considering a home equity mortgage. An honest mortgage professional will tell you whether this type of loan is appropriate for your needs. For instance, if you are planning to borrow against your home to pay off a credit card debt or take a cruise, they should immediately dissuade you. If you are considering this type of loan to improve your property for future real estate, then they should reassure you that that is typically an acceptable reason.
What is the Repayment Structure?
With any loan, you want to make sure you understand every aspect of it and an important aspect is how you will be expected to repay. Every loan and lender is different and while it might seem obvious, no matter how badly you need the loan this isn’t a question you want to gloss over.
Are the Terms of the Loan Negotiable?
Even if you know the interest rate and terms of your home equity loan going in, you should always ask if there’s room to negotiate. Even if the answer is no, it’s better to ask and try to walk away with more value. The goal is to enter into the best arrangement for your financial future.
Don’t be Scared to ask for the Fine Print to be Explained to you
There’s a lot of fine print with a home equity loan so take the time to peruse and ask questions before signing. Some of it will feel minute and insignificant but it can be anything but.
There’s no such thing as a dumb question and no professional will expect you to understand what it all means. The onus is on you to ask the right questions.