10 Questions to Ask a Mortgage Lender

10 Questions to Ask a Mortgage Lender

When preparing to apply for a mortgage, it pays to be prepared and a big part of that is knowing what questions to ask before, during, and after the application process.

If you're considering getting a suitable home loan, here are the questions you should be asking your mortgage lender before, during, and after getting your mortgage:

Before Applying

If you're checking whether you qualify for a loan, request the following information from a lender with no application fees.  

1. What Information Will You Require for My Loan Application?

There's nothing worse than getting ready to apply for a mortgage only to find out that you're not prepared with all the documents your lender needs to verify during the initial application. To uncover any potential underwriting challenges up-front, ask your lender to walk you through your loan estimate. 

2. What Is Your Average Loan Processing Time?

Asking your lender about their average loan processing time during the interview process will allow you to better weigh your lender options. Understanding the time spent between the processing, underwriting, appraisal, and closing is critical. A professional mortgage lender will give you a fair estimate of the overall timeline of your mortgage processing from start to finish.

3. Are you Equipped to Approve Loans In-House? 

Some lenders are equipped to underwrite loans in-house, some are not. Mortgage underwriters review loan applications, make conditions for approval or rejection of applications. If a lender can handle the underwriting in-house, it will mean that your loan processing will take a significantly lesser amount of time. If a lender underwrites loans in-house, you can proceed to inquire how much you will be approved for since closing on time is assured.

4. Will My Payment Increase at Any Point?

Interest rates fluctuate almost every other time. If you have reason to believe interest rates are rising, you might want to consider locking your loan. Before doing this, determine if there are additional costs when locking in a loan rate and how long your rate will be locked. 

During Application

If you are in the shopping-around phase, it's time to speak with a lender, confirm your loan product, and apply for approval. It would help if you asked all the right questions at this point.

1. Which Mortgage Type Is Best for Me?

Don't be shy about asking lenders about the types of loans available to you. Find out the ins and outs of various loan options lenders are offering. Ask the lender to explain each type of loan's pros and cons and determine how each would fit in with your circumstances.  Does the lender have any mortgage options where you can avoid paying PMI? How is the interest rate? A good mortgage broker will take the time to explain all this, helping to measure various loan products against one another.

2. What Kind of Down Payment and Overall Costs Do I Need to Get A Loan? 

Down payment requirements are an essential component to consider. For a more accurate picture of what the loan will cost you each year, ask the mortgage lender about the related third-party vendor fees and lender fees. Also, inquire about the interest rate and the APR on your loan and if they can be adjusted.

3. Do You Work with Down Payment Assistance Programs?

Down payment assistance (DPA) programs come in the form of grants or loans and can be an enormous help. If you've not saved up enough money for your down payment, you'll need to find a lender that participates in down payment assistance programs.


4. Do you Charge a Prepayment Penalty?

Make sure you know what your lender charges prepayment penalties upfront. Choose a lender that does not charge prepayment penalties if you need to pay your loan off early, either through the sale of your property or a refinance.

After Signing

1. How Long Will My Loan Take to Settle?

Of course, everyone wants to know their move-in dates to make preparations. Ask your lender what will happen with your loan after closing and the average time for your loan to settle should you choose to refinance, and whether your loan will be sold after closing.

2. How and How Often Will I Be Updated on My Loan's Progress? 

Proper communication with your lender and frequent updates on your loan's progress makes the whole process of dealing with your mortgage lender more seamless. Be sure to ask about any follow-up methods a lender has for mortgage borrowers.

Having the right mortgage and the best lender can make all the difference. It could save you thousands, even tens of thousands of dollars over the life of your home loan.  Before you sign, ensure you have all your bases covered.  Want to learn more about securing your next home mortgage? Contact us today or head over to our website.


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