How do you decide which lender is best for you?
There is a lot more to the mortgage process than getting a good rate. High costs in fees and poor service can come as very unhappy surprises.
Here’s a list of suggested questions you might ask a lender:
• How large is your company, and how long has it been in business?
• Are you a licensed mortgage broker or loan officer in Texas?
• Is your company a mortgage banker or a mortgage broker? (A banker lends its own funds; a broker searches mortgage sources and arranges for you to receive financing from the lending entity.)
• What is the name, phone number, and e-mail address of the person who will actually be processing my loan application? How accessible is that person?
• Tell me about all loan fees. What fees must I pay up front? What fees will I have to pay at closing?
• How can you assure me I won’t pay any unnecessary “add-on” fees?
• Do the costs you are quoting include the lender origination fee?
• Are there loans available with no origination fees? No closing costs? Reduced closing costs?
• What are your interest rates?
• Is there a fee to lock in my interest rate? How long can I lock in the rate? If interest rates go down, can I relock at the lower rate? If so, will there be a fee for that?
• What information must I provide to get a mortgage loan?
• What documentation will I have to provide?
• Will you require current tax returns? (Take note of this especially between Jan. 1 and April 15 if you haven’t prepared your return yet.)
• How long will it take to get complete and unequivocal loan approval and be ready to close?
• I plan to stay in this house for ___ years. Can you show me the breakdown of any ARM loans you offer vs. fixed-rate loans to see which could save me the most money in my situation?
• What is private mortgage insurance? Other than a 20% downpayment, how can I avoid the private mortgage insurance?
• In the last three months, how many loan applications have you taken and how many have you been unable to close?
• Can you give me names and phone numbers of two or three people for whom you’ve funded loans in the last two months?
Currently, Texas-licensed mortgage brokers must use the standard Conditional Qualification and Conditional Approval letters when representing that an applicant is prequalified or preapproved for a mortgage loan. Mortgage bankers may be required to do so in the future.
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