When you’re eager to learn about a new topic, asking questions is a fantastic strategy for gathering information, opening new avenues of exploration, and identifying gaps in your knowledge base. And when you’re trying to choose the right person or company to work with, questions are an excellent selection tool for deciding who can both meet your needs and provide a comfortable working relationship that allows you to move forward with confidence. Clearly, if you’re hoping to buy a home in the near future, working out a list of questions to ask a mortgage lender is a good idea.
Questions to Ask a Mortgage Lender
Buying a home is a big deal. For many Americans, it’s the most expensive purchase they’ll ever make, so a degree of caution is certainly understandable. If you want to work with a reputable lender to get the best deal possible, you’ll want to take some time and do a little research. Visit the websites of various lenders, read reviews, and ask family and friends for recommendations. Shop around, and make a list of possibilities. Then, ask questions that will offer insight into a lender’s offerings and services. What should be on your list of questions to ask a mortgage lender?
Which type of mortgage is best for me?
As NerdWallet points out, this isn’t an easy question to answer, so a quick response is cause for concern. With fixed-rate and adjustable-rate mortgages and government-sponsored and conventional loan programs to choose from, there are numerous loan products to consider, and they all have a mix of benefits and drawbacks. Ideally, a lender will ask about your situation and goals. Then, they’ll offer a few different possibilities and discuss the pros and cons of each option with you. Lenders vary in their offerings. It’s fair to ask if there’s a loan product that the lender doesn’t offer that might suit your needs. A reputable lender will acknowledge that there are many products on the market.
How large of a down payment will I need?
The prospect of coming up with a sizeable sum for a down payment can be daunting. Raising the issue with a lender who you’re considering working with early in the process alleviates some anxiety and prevents misunderstandings. As Investopedia reports, the myth of a 20-percent down payment requirement persists because of that figure’s tie to a requirement for private mortgage insurance. However, there are several loan options that offer homebuyers a chance to secure a mortgage with less. For example, buyers using VA or USDA loans may be able to get 100-percent financing. Other loan options have down payment requirements as low as 3 percent.
What are all the costs involved?
Getting a loan isn’t free. According to The Balance, a reputable lender should be willing to go over the costs that borrowers typically incur in the course of securing a home loan. These normally include things like lender fees, appraisals, credit reports, a title policy, pest inspection reports, recording fees, escrow, and taxes.
Do you charge for a mortgage rate lock?
As The Mortgage Reports explains, a mortgage rate lock is an agreement with your lender that your interest rate won’t change for a set period of time, regardless of changes in the market. Some lenders offer a free rate lock for 60 or 90 days, which may be enough to get you through from approval to closing. Others charge for a rate lock. If you want to lock in your rate for peace of mind, this is useful information.
How long will it take to get my loan from application to closing?
As Policygenius indicates, it generally takes a month or more to go from application to closing. Why ask your lender for a timeline? They should be able to offer an estimate that takes the particulars of your situation into consideration. Plus, their response may give you a feel for how their loan process works.
When you have questions to ask a mortgage lender, turn to the friendly loan professionals at PrimeLending of Denver. We delight in using our insight, expertise, and experience to provide answers that are accessible, useful, and helpful. Contact us today to learn more about our services.