Courtesy of TCFU

June is National Homeownership Month, a perfect time to think about what it means to purchase a home. Buying a house is a huge step, and the loan you choose can shape your financial future for years. While excitement is normal, it’s smart to ask your lender the right questions before you agree to anything. Here are five things you should ask to avoid stress and hidden costs.

1. Which Loan Works Best for My Situation? Home loans aren’t one-size-fits-all. You’ll see fixed-rate, adjustable-rate, FHA, VA, and more. Each option comes with its own rules and perks. Ask your lender to walk you through each type and suggest the best fit for your income, credit score, and how long you plan to stay in the house.
2. What Will My Interest Rate and APR Be? The interest rate affects how much you pay over time. The APR takes it a step further and shows the full cost, including lender fees. Make sure you know both numbers. Ask whether the rate stays the same or changes later.
3. How Much Do I Need for a Down Payment? Many hear “20% down,” but some loans need less. Find out your required down payment and if you’ll need private mortgage insurance (PMI) for putting down less. PMI can bump up your monthly bill, so ask
4. What Are the Closing Costs? Closing costs can be a surprise if you don’t ask. These fees usually fall between 2% and 5% of your loan and cover things like origination, appraisal, and title insurance. Request a full list of fees and see if you can negotiate some away, or if the seller can pay a share.
5. How Are Property Taxes and Insurance Paid? Some lenders bundle taxes and insurance into your monthly payment, while others leave you to handle these costs on your own. Make sure you know how these will be managed so you don’t face unexpected bills.

Bonus question: Do you offer a Rate Reset Program? Some lenders offer programs that let you adjust your rate during your loan term, like the HarmonyLoan™ from Transportation Federal Credit Union. This can be helpful if rates drop after you buy. Visit www.TransFCU.org/Mortgages or call 202.366.9400 to find out more.

Getting a mortgage is a big deal. Asking these questions puts you in control and helps you avoid surprises. Don’t hold back if you need more information. A good lender will give you clear answers and help you feel confident in your choice. The more you know before you sign, the easier the journey to your new home will be.

Publishers Note: This column courtesy of the Transportation Federal Credit Union.