Article from Craig Donofrio, 10 Questions To Ask Your Mortgage Lender, discusses questions you should be asking to ensure you’re clear on your options when buying a home …
Different mortgage lenders offer different types of mortgages. These can loans differ in the amount offered, interest rates, length and payment type. Common mortgage types include the following:
- Federal Housing Authority (FHA) mortgages
- Veterans Affairs (VA) mortgages
- Fixed-Rate Mortgages (FRMs)
- Adjustable-Rate Mortgages (ARMs)
- Interest-only mortgages
- Reverse mortgages
- Jumbo Loans
2. What mortgage is the best fit for me?
Your mortgage lender should be able to answer this question once you’ve completed an application and the lender takes stock of your employment, income, assets, credit, debt, expenses, down payment and other information about your finances.
3. What are the full costs of my mortgage?
This will be available to you via a Good Faith Estimate, or GFE, which is a line-by-line estimate of mortgage costs. Use this as a shopping tool to compare rates and expenses from various lenders.
When you’re ready to close, a finalized document called a HUD-1 settlement statement will be given to you.
4. When will I get the HUD-1?
By law, you have the right to receive the HUD-1 a day before closing or settlement.
5. What documents do I need?
Proof of income and assets, personal identification and information about your credit history are the big three. It can be a lot of paperwork, so start now by getting your paperwork in order.
Many mortgage lenders require borrowers to meet certain guidelines. For example, VA loans are only available to eligible veterans, while qualifying mortgages have their own list of restrictions. Your lender will be able to tell you which loans you qualify for.
7. Who will be the title and escrow agency or attorney?
You can do the same for an escrow agency and attorney.
8. How long will it take to process my loan application?
The answer depends on how quickly you supply the required documents, the mortgage lender’s workload and the demand for inspectors, appraisers and other professionals involved. In general, it can be a few weeks to a couple of months.
9. What can I do to avoid slowing down the process?
While your mortgage lender will have specific recommendations to ensure speediness, here are some general recommendations:
- Fully complete all required documents.
- Be readily available to answer any questions.
- Be prepared to explain any past credit issues.
- Go over your credit report for errors.
- Do not take on any new debts, switch jobs or change careers during the process.
10. What are the chances my loan will get sold?
There’s no way to tell, but if it does happen, don’t panic—it’s normal.
If it happens, the old and new servicing companies must notify you in writing of any changes so you know who to pay and how to proceed.
Donald Horne, Team Success Listing
Associate Broker for Coldwell Banker Shooltz Realty