Borrowing money to purchase a home is one of the largest transactions you'll make in a lifetime. It makes sense to ask as many questions as possible so that you can be sure of your investment dollar. Take a look at the top questions to ask your lender when securing a home loan. Their answers will shape the loan that you ultimately take out.

1. Which Loans Work for Me?

Everyone has a unique, financial situation. For this reason, there are multiple loans for home purchases. Ask your lender about loans that are specific to your needs. People with limited incomes might benefit from an FHA loan instead of a conventional type, for instance. Veterans can seek out VA loans. A qualified lender will have information on all of these loans, which can help you narrow down those financing options.

2. Can I be Pre-Approved?

Homes for sale in Sherburne County can be in high demand. Bidding on a dream home will be much easier if you have a pre-approved loan. Inquire about pre-approvals because your bid can be the ultimate winner when your lender is already backing your financing. A pre-approval essentially verifies a maximum price that's backed up by a lender. You'll be able to bid and close on a property faster than other bidders who don't have a lender's support yet.

3. Which Fees are Associated With the Loan?

The lending world will always be a business. Definitely ask about any fees associated with a pending loan. These fees might include origination charges, escrow, or closing amounts. Ask about a good-faith estimate that's given out by all lenders. This document explains every fee associated with the loan so that there are no surprises. These fees can add up to thousands of dollars, so be aware of your particular situation before agreeing to the mortgage.

4. What is the APR and Final Mortgage Payment?

The APR, the annual percentage rate, is the interest rate attached to the loan. It can be either a fixed or adjustable amount. This rate is based on your credit history, loan amount, and other factors. With the rate locked in until you close on the property, also ask about the monthly payment. For fixed rates, the payment is the same each month. It includes the principal and interest.

5. How Much Down Payment is Required?

Most borrowers are familiar with the 20-percent rule when it comes to down payments. However, this rule can be bent. Depending on the lender and loan type, you might put down as little as 3 percent on a home. Always verify this amount because it's critical to a successful purchase. Ideally, put down as much as you can to lower the financing amount.

There are many lenders found both online and in your neighborhood. Be sure to shop around to a handful of lenders before settling on one company. You'll end up with a lot of research to compare and contrast. A fair mortgage will make it easy to pay down the amount over the years.