12 questions you should always ask a mortgage lender


4. Am I able to send my documents to you electronically?

Another important question to ask a lender: Does your company have the online platform to support a fully digital mortgage application? If they answer yes, you may be able to upload your asset and income documents electronically rather than faxing, mailing or scanning them. Having this feature can help speed up the mortgage process.

If you prefer an in-person experience, double-check that your lender has a nearby branch with loan officers on site to work with you.

5. What’s my minimum required down payment?

A commonly cited rule of thumb is to make a 20% down payment when buying a home, but that’s not doable for many homebuyers. In fact, the average down payment among all mortgage borrowers is 12%, according to recent data from the National Association of Realtors (NAR). First-time buyers put even less down — just an average down of just 6%, NAR found.

Some mortgage programs don’t require any money down, including USDA loans and mortgages backed by the U.S. Department of Veterans Affairs (VA) for eligible military borrowers. Others, like Fannie Mae HomeReady and Freddie Mac Home Possible loans, allow down payments of as little as 3%. Additionally, you can qualify for an FHA loan with a 3.5% down payment and a 580 credit score.

6. What’s your origination fee?

It costs money to borrow money, and you need to know how much your lender charges to provide your mortgage. Ask about the expected origination fee before you apply for a mortgage, which includes charges for processing, underwriting and funding your loan, according to the Consumer Financial Protection Bureau (CFPB).

You can confirm your estimated origination fee by checking Page 2 of the loan estimate you’ll receive within three business days of submitting your mortgage application.

7. Do I qualify for down payment assistance?

One of the most important questions to ask a loan officer is if there are any down payment assistance (DPA) programs for which you may qualify. This is especially important if you need extra help coming up with the cash for closing costs or the down payment.

DPA programs often come in the form of grants or loans and have stipulations that you must meet to receive the help. If your lender doesn’t offer this type of assistance, check with your local housing finance agency.

8. What are all the costs I’ll need to pay to get a mortgage?

Mortgage closing costs range from 2% to 6% of your loan amount and are charged on top of the down payment. Closing costs include all of the charges you’ll pay — most of which come from third-party services — to buy your home.

Review your loan estimate for a list of your expected closing costs and raise questions and concerns where necessary. Negotiate to have some your fees reduced or removed, such as the:

  • Application fee
  • Origination fee
  • Pest inspection fee
  • Survey fee
  • Title insurance services

9. What is my estimated mortgage interest rate?

Your credit score, debt-to-income (DTI) ratio, down payment amount and several other factors all help determine your mortgage rate. Having a higher credit score and larger down payment amount can work in your favor, while too high of a DTI ratio makes you more risky and can cost you, because a lender may charge a higher rate.

Shop around with multiple lenders to find the best mortgage rate to potentially save thousands over the life of your loan. Never settle for the first mortgage rate quote.

10. Am I being charged points for my quoted mortgage rate?

When a lender quotes a mortgage rate for you, ask if the pricing includes mortgage points. Also called discount points, these are upfront fees you can pay to get a lower rate. One point is equal to 1% of your loan amount. For instance, if you’re taking out a $250,000 mortgage, one point would cost $2,500 to buy down your rate.

Each point you buy can drop your rate by up to 0.25%. You can also check Page 2 of your loan estimate to see if there’s a cost included for points.

11. When can I lock my interest rate and what’s the fee?

Mortgage rates fluctuate every day. Depending on how the economy is doing, you may want to get a stable rate that won’t change dramatically before you make it to the closing table. A mortgage rate lock secures your rate for a set amount of time, usually 30 to 60 days. As long as you close within that time frame and your financial situation stays the same, your rate shouldn’t change.

Some lenders don’t charge a fee for rate locks. However, there could be a cost to extend it if the lock expires before closing.

12. Will you service my loan after closing?

The last on our list of questions to ask a mortgage lender: Is your loan being sold once you close? If so, you could be working with a brand-new company to make mortgage…



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