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8 must-ask mortgage and refi questions

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5. How long should I lock?
This will depend on how busy the lenders and mortgage servicers are -- the busier the offices, the longer the wait to close. If you want to lock a rate, follow the broker's or lender's advice on how long you should lock. You might be told to lock for 45 days or even longer. For more information on rate locks, read my column "Rate lock anxiety."

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6. Will I be able to make the payments when I include all the monthly mortgage expenses?
Principal and interest are only part of your monthly payment. Add in private mortgage insurance, association fees, property taxes and homeowner insurance and your range of affordable homes will narrow -- to the ones you will actually be able to afford.

In addition, you'll need a savings cushion. Many people don't find room in their budget to save up for the inevitable roof repairs, furnace replacement and painting. Then they step on the debt treadmill to pay for those things.

Experts often recommend that couples qualify for a mortgage based on one partner's income. That lets them escape a common dilemma today, in which the income from one spouse vanishes, leaving them one paycheck away from financial disaster.

7. Is my credit good enough to get that attractive rate?
The advertised rate isn't necessarily the rate you'll get. If your credit history is merely OK instead of excellent, you'll be quoted a higher rate than your chum with flawless credit. To be more specific, if you have been more than 30 days late with your mortgage payment anytime in the last couple of years, you are unlikely to get the best rate. Ditto if you've been more than 30 days late three or four times in the last couple of years on other types of debt, such as credit cards and auto loans.

People with less-than-perfect credit won't be turned away. They'll just have to pay a higher rate.

Before applying for a mortgage, check your credit reports to make sure they're accurate.

8. Can I get homeowner insurance?
This question is especially important in states susceptible to hurricanes such as Florida, Texas and other Gulf Coast states. Mold problems, hurricanes, sinkholes and tornadoes are big reasons why these states pay some of the highest premiums in the nation. Texans are charged the most, according to the latest annual homeowners insurance report from the National Association of Insurance Commissioners. Homeowners in Louisiana, Oklahoma and Florida pay the next highest premiums.

Some insurers have pulled out of states and refuse to write new homeowner policies. If you're buying a house with a history of insurance claims for water damage or mold, you might have trouble finding a company that will insure it. Shop for insurance long before the closing date.'s corrections policy -- Updated: Jan.20, 2006
More stories by Holden Lewis
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