Questions to Ask Your Lender

Who ARE you?

When meeting with a lender, ask if they work your local market. Your lender is going to go to battle for you and help you win a contract – as well as a competitive rate. Ask if your lender is one of the following:

 

BROKER

This lender will shop rate through many channels, but will send off your loan to another person for underwriting and processing. Rates can be good, communication can be spotty.

MORTGAGE BANKER

This lender operates between a broker and a banker. The Mortgage Banker will have access to more than several channels for rate and will also underwrite, process, and fund the transaction. Rates can be good, communication can be great.

BANKER

A banker will have only bank specific products. You may find yourself with communication but lengthier qualifying times depending on the bank. Big bank = better rate but longer timing. Small bank = better timing but not as good of rate.

What kind of loan is best for me?

Your lender should have access to a variety of loan programs and should tailor fit a loan to meet your needs. This is NOT the place for a one-size-fits-all product. Your home loan should be fit to your situation and can be any of the following:

 

• FHA financing (Federal Housing Authority)

• Conventional financing

• Down Payment Assistance program

• Jumbo Financing

• VA financing (Veteran’s Administration)

• USDA financing

• ARM financing, 30 year fixed, 15 year fixed

When will I close?

Timing is of the essence in a real estate transaction. You’ll have contract deadlines to meet, insurance policies to secure, and moving trucks to manage. Your lender is an integral piece to performing as your purchase contract requires. The lender should be confident when asked this question and ensure that he/she can perform to contract requirements.

Where is my money going?

As you interview lenders you should feel confident that he/she will be an advisor, not just a transaction administrator. Ask your lender about interest paid over the life of the loan should you choose the rate they’ve offered. Get VERY detailed about financing expenses that might be a part of their quote, including:

 

• Underwriting fees

• Origination fees

• Processing fees

• Administration fees

• Points

Why should I work with you?

This is a GREAT question! Let the lender you’re interviewing tell you why he/she is the BEST at what they do. Hold them to their promise. Remind them of the ‘why’ they gave you later in the process to ensure that your lender is going above and beyond to help you throughout your transaction.

 

If your lender doesn’t have a good answer to this one – it’s time to go to the next interview!