Questions to Ask A Mortgage Lender Before Writing an Offer
You’ve chosen your dream house, gotten pre-qualified and are about to write your offer – so now what? At Solutions, we recommend finding out as much as possible about your mortgage before you make the next big leap. In fact it is a good idea to talk with a lender, before actually looking at homes, so you know that you can afford that dream house.
As you meet with your chosen mortgage lender, there are several questions to ask them that will help you navigate your options when buying a home.
What mortgage types do you offer?
Different mortgage lenders offer various types of mortgages. These can differ in the amount offered, interest rates, length and payment type. Common mortgage types include the following:
- Fixed Rate Mortgages (FRMs)
- Adjustable-Rate Mortgages (ARMs)
- Federal Housing Authority (FHA) mortgages
- Veterans Affairs mortgages
- Interest-Only Mortgages
- Reverse Mortgages
- Jumbo loans
Which one is the best fit?
Your mortgage lender can answer this question once you’ve completed an application and they look at your employment, income, assets, credit, debt, expenses, down payment and other information about your finances.
What are the full costs?
Ask you lender for a Good Faith Estimate or GFE, which is a line-by-line estimate of mortgage costs. Use this as a shopping tool to compare rates and expenses from various lenders.
When you’re ready to close, a finalized document called a HUD-1 settlement statement will be given to you.
When will I get the HUD-1?
By law, you have the right to receive it a day before closing or settlement.
What documents do I need?
Proof of income and assets, personal identification and information about your credit history are the big three. It can be a lot of paperwork, so start now by gathering everything together and getting it in order.
What are the qualifying guidelines?
Many mortgage lenders require borrowers to meet certain guidelines. For example, VA loans are only available to eligible veterans, while qualifying mortgages have their own list of restrictions. Your lender will be able to tell you which loans you qualify for and why.
Who will be the title and escrow agency or attorney?
You don’t have to leave selection of the title company up to the lender. See how much your mortgage lender’s recommendation will cost, ask your Solutions agent for their recommendations and see if you can save any money by calling around and asking for information.
You can do the same for an escrow agency and attorney.
How long will it take to process the loan application?
The answer depends on how quickly you supply the required documents, the mortgage lender’s workload and the demand for inspectors, appraisers and other professionals involved. In general, it can be a few weeks to a couple of months.
What can I do to keep the process moving along smoothly?
While your mortgage lender will have specific recommendations to ensure speediness, here are some general recommendations:
- Fully complete all required documents.
- Be readily available to answer any questions.
- Be prepared to explain any past credit issues.
- Go over your credit report for errors.
- Do not take on any new debts, switch jobs or change careers during the process (we’ve discussed this in a previous blog).
What are the chances the loan will get sold?
While there are no ways to tell for sure, if it does get sold, don’t panic — it can happen. If it does, the old and new servicing companies must notify you in writing of any changes so you know who to pay and how to proceed.