What Types Of Questions Should You Ask Your Mortgage Lender?
Before you choose a mortgage loan originator to work on your mortgage application there are several questions you should ask your mortgage lender, I recommend that you speak with several of them and ask them certain questions and see if you get along with the individual. The mortgage loan approval process can be sometimes grueling and stressful, especially when the underwriter starts asking for conditions. Certain newer underwriters will ask for the most ridiculous conditions that I sometimes need to step in and ask for management to step in. Here are some of the questions that you should ask your mortgage loan originator and see how you like their responses. Consider it like a interview process. If you do not like the prospective loan officer’s answers, then continue on shopping until you feel comfortable with a loan officer that you feel you can trust.
Questions You Should Ask Your Mortgage Lender: The Type Of Mortgage Loan Programs That Might Be Best Suitable For You And To Explain Each Of The Loan Programs
Most seasoned loan officers will probably qualify you by analyzing your income, assets, liabilities, reserves, credit reports, credit scores, and debt to income ratios before they offer the various loan programs best suitable to the mortgage borrower. It might be FHA, Conventional, or an ARM product. Sometimes a mortgage loan borrower with phenomenal credit scores might not qualify for a conventional mortgage loan because their debt to income ratios are too high. The loan officer should explain to you why you do not qualify for certain mortgage loan programs and not just tell you that you, as a mortgage loan borrower, needs to select a certain mortgage loan program.
Adjustable Rate Mortgages Versus Fixed Rate Mortgages
If the mortgage loan officer recommends an adjustable rate mortgage, ask him or her the frequency of the adjustment and the maximum annual adjustment. You should also ask him or her the cap on the adjustable mortgage which is the highest rate. Make sure you also ask the margin and index. Many times the loan officer will offer the ARM because rates are generally lower on adjustable rate mortgages and it is a great product if you do not intend on living in your new home for more than 5 years.
Buying Down Mortgage Rates By Paing Points
If you intend on living in your home for a long time and do not intend in refinancing in the near future, you may want to ask your mortgage loan officer if you can buy down the mortgage by paying points. A point is equivalendt to one percentagage point of the mortgage loan amount.
Costs Of Getting A Mortgage Loan
Besides the down payment on a home purchase, there are closing costs associated with the origination of a mortgage loan. A mortgage broker may not have origination fees, but a mortgage broker needs to fully disclose all costs and fees of third party vendors that is associated with the origination of your mortgage loan even though he has no financial responsibility. He needs to disclose to you the Good Faith Estimate which is an estimate of all settlement and closing costs that you may incur during your mortgage loan application process. Examles of costs that a mortgage loan borrower may incur are appraisal costs, credit report fees, title charges, termite inspection, well inspection, reinspection fees, pest inspection fees, roof inspection fees, taxes, and recording fees.
Turnaround Time For A Mortgage Approval
Other important questions you should ask your mortgage lender is what their turnaround time is for a mortgage loan approval and clearing conditions. Underwriting turnround times vary from lender to lender. Some lenders will underwrite and approval a mortgage loan application in less than 24 hours and clear conditions in less than 24 hours while other lenders have 9 day underwriting and approval turnaround time and 7 days to clear conditions. This is an important question you should ask your mortgage lender.