When Applying For A Mortgage Loan, Ask These Five Questions | Mortgage

When Applying For A Mortgage Loan, Ask These Five Questions

When trying to get approved for a home mortgage loan, it is important to be as prepared to make the loan process as smooth as possible. There are five basic questions you should ask your loan officer to make sure that you are getting the best possible mortgage and to make sure that your mortgage loan will close on time.

by DavidGWhite

When applying for a home mortgage loan, it is crucial to be as prepared to make the loan process as smooth as possible. There are five basic questions you should ask your loan consultant to make sure that you are getting the best possible mortgage and to make sure that your mortgage loan will close on time.

What Is The Loan Program I Am Trying To Qualify For And What Are The Terms Of The Mortgage?

There are several different types of home loans and when applying for a mortgage, you need to know if you are applying for a FHA, VA, Conventional or any other type of mortgage loan program. Each program has several different requirements when it comes to credit score, down payment or job history. Also, you need to ask your loan banker what the term of the mortgage will be. Are you applying for a fixed rate mortgage? Do you want a 30-year note or a 15-year note? Knowing the term of the loan and the loan program can make the process move quicker.

Are There Any Upfront Cost?

Some lenders require an application deposit before taking your home loan application. Sometimes, these deposits are nonrefundable. These deposits can increase your total closing cost. Most mortgage lenders will require customers to pay for the appraisal, which is now a common practice. Be prepared to pay for the appraisal, but there are many lenders who do not ask for an application deposit.

What Is The Rate and Fees For My Loan?

It is crucial to know the mortgage rate and the closing cost connected with the mortgage. When comparing mortgage offers, it is important to only compare the fees the lender controls. These are called lender fees and they will make up section A of the Good Faith Estimate or on the HUD-1 form, these will be the fees in the 800 section. Typical lender fees are underwriting, processing, document preparation, application fee, loan origination fee and discount points.

To compare offers, see what the total lender fees are and the rate of the loan. For example, if one lender is charging $3000 in lender fees are a rate of 4.25% and another lender is charging $2000 for the same rate, obviously the second lender is cheaper.

What Are The Loan Turn Times?

Sometimes getting the lowest rate and lowest closing cost is not always the better deal. Lenders that charge less cannot always close your mortgage loan on time. The service you will receive from a company that is the lowest in price might not be the same from another company that is a little higher in closing cost. Think of it this way, do you expect to get better service from Wal-Mart or Macy's?

If you are wanting the best service and want your mortgage loan to close on time, ask the loan company if they have any closing guarantees. Some lenders have guaranteed closing to where if they miss the closing date, they will reduce their fees. This is important if you are buying a new house and must close on a particular day.

What Are The Required Documentation Needed?

Always ask the loan officer what the required documents you will need to provide in order to process your loan request. Having these documents ready at time of application can greatly speed up your loan request. Basic asset and income documentation is normally what the lender will require.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

David White is a Senior Mortgage Officer who specializes in home loans. David has over 12 years experience in the mortgage industry and helps his clients with their Dallas home loans. Free reprint avaialable from: When Applying For A Mortgage Loan, Ask These Five Questions.