Applying for a mortgage can be a very thorough process. There is a lot involved, so sometimes questions that need to be asked will slip your mind.
It is good practice to meet with at least three lenders and ask them the following 7 questions.
1. What types of loans do you offer?
Not every lender offers each loan that a home buyer may qualify for. Some lenders specialize in specific loans. You will need to make sure that the lender you are inquiring with offers the right loan for you, and make sure to find out about all of their other loan options.
2. Which loan is best for me?
After completing your loan application, the potential lender should be experienced enough to figure out which loan option is best suited for your needs.
The information included in your loan application that helps them to determine this is:
- Employment
- Income
- Assets
- Credit
- Debt
- Expenses
- Down payment
3. What are the closing costs?
Typically closing costs are 3% to 4% of the home’s sale price. It is also important to note that some closing costs are negotiable.
After submitting your loan application, you should receive a good faith estimate which will give you a ballpark idea of your closing costs.
4. How long is the process?
On average a closing will take 50 days, but if the market is hot this number can change to 30 days.
Keep in mind that certain types of loans take longer to process than others. Also, if any repairs are needed after the home inspection, that could infringe on your time as well.
5. Who does your underwriting?
Underwriting is the process where lenders verify your assets and check your credit score. Some lenders do this in-house, but many use a third party.
Typically, the process goes by faster with lenders that perform their underwriting in house.
6. What documents do I need?
Different lenders will require different pieces of information, but here is the bulk of your paperwork:
- Proof of income
- Asset information
- Personal identification
- Credit history
7. What programs do you offer for down payment assistance?
Not all lenders participate in these kinds of programs, but if the lender of your choice does, it could be of value to inquire about them.
These are only a few in a long list of questions you should be considering when choosing a lender, but these questions will help you to compare and contrast quickly to see which lender is the right fit for you.
