Ten Questions to Ask a Mortgage Banker
Your ability to find the best mortgage deal doesn't simply depend on whether you get the lowest rate. Instead, you need to review all the various components of a various mortgage offer and weigh them against each other to determine what the most cost-effective alternative really is. And remember, your time is worth money as well. Here are some key questions to ask:
1. How long is the average loan-processing time right now, and are there any particular factors accounting for that length of time?
2. What documents should I prepare to begin the process (such as proof of wages, tax information, or asset data)?
3. What are the qualifying guidelines for particular loan choices in terms of income, employment, assets and liabilities and credit history? (Government programs may have easier qualifying guidelines.)
4. What is the minimum down payment you require not only on this loan, but on your best loan opportunities?
5. What is the annual percentage rate (APR) of the mortgage interest? (This data is necessary to effectively compare different lenders' offerings.)
6. What are the points or origination fees on these various choices?
7. What are the conditions for locking in a rate, and how long will it take me to get the lock in writing?
8. What is your initial good faith estimate, and how much is each of the items likely to change by closing? Can I get my application fee back if I change my mind?
9. Is there a prepayment penalty on this loan? (If there is, walk away.)
10. What can delay the approval of my loan, other than stuff on my end (such as credit issues)?
Mortgage banks are a good first stop for first-time buyers with a banking relationship. If nothing else, you pay banks fees every month for checking and other accounts. Use them to educate yourself about borrowing.