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Info for Homeowners
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Comparison Shopping for a Home Equity
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| Lender A | Lender B | Lender C | |
| What are the monthly payments? | |||
| What is the Annual Percentage Rate (APR)? The cost of credit expressed as a yearly rate; includes the interest rate, points, broker fees, and other credit charges. |
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| What is the interest rate? The cost of borrowing money expressed as a percentage rate. |
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| Will the interest rate change? | |||
| When? | |||
| How often? | |||
| By how much? | |||
| How much will you pay in "points?" | |||
| How much will you pay in fees? | |||
| Application or loan processing fee | |||
| Origination or underwriting fee | |||
| Lender or funding fee | |||
| Appraisal fee | |||
| Document preparation/recording fees | |||
| Broker fees | |||
| Other fees | |||
| How much of the application fees are refundable if you don't get the loan? | |||
| Number of years you have to repay the loan | |||
| If there's an arbitration clause, what is the cost to you? | |||
| If there's a balloon payment, how much and when? | |||
| What are the total closing costs? | |||
| If you use a broker, how—and how much—will he be paid? | |||
| What is the penalty for late/missed payments? | |||
| Penalty if you pay off/refinance the loan early ("prepayment penalty") | |||
| Does the loan include credit insurance? You don't have to accept optional credit insurance to get your loan. If you want credit insurance, ask about paying for it monthly instead of financing the premiums as part of your loan! |
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| Are payments greater then 40% of your monthly income? | |||
| CAN YOU AFFORD THIS LOAN? | |||
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Make sure your income and your home appraisal are not exaggerated on the loan app! This is a sure sign of a predatory lender.
Housing Info Line |
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