Applying for a mortgage is a big deal. Since your home is likely one of the most significant investments you’ll make, asking these essential questions will make you an informed buyer. Answers to these questions can help make choosing the right loan a much easier process.

What Loan Options do you Offer?

Each lender offers different loan options when applying for a mortgage. Therefore, you may have to shop around for a particular lender if you’re looking for a specific mortgage type, such as an FHA or VA loan. 

If you qualify for multiple loan options, working with a reputable mortgage broker can provide you with the insight you need and with only one mortgage application.

Which Loan is Best for my Situation?

Mortgage lenders should help you determine which loan option is best for you. Some borrowers qualify for multiple loan options. Looking at the loan’s total cost over the life of the loan can help you choose the best option. You’ll see what the loan will cost you monthly and over the term to ensure you choose the most affordable option.

If you don’t know which loan is right, a mortgage broker can present you with multiple options, helping you decide which is best.

What is my Interest Rate?

When applying for a mortgage you shouldn’t focus only on your interest rate, it’s important to know what you’re paying to borrow the money. So, in addition to asking about your interest rate, ask about the APR. This is the annualized cost of the loan, including the interest rate and closing fees. Basing your choice on the APR can help you save the most money over the life of the loan.

What Does it Cost for an Interest Rate Lock?

When you find a home and are close to final approval, you’ll need to lock your interest rate. Some lenders lock rates for free for 30 days, and others charge a fee. Ask specifically what the rate lock procedure is and how much it costs. 

Also, consider asking if the lender offers a float-down option. This allows you to lower the interest rate once if rates fall before you close your loan. There’s usually a cost for this feature, so find out the details.

Who Will Update me on the Loan’s Status?

Waiting for loan approval can be stressful. So first, find out how you’ll get updates and how often. Working with a reputable loan officer with whom you have a good relationship can ensure you get updates immediately and provide the necessary documentation to clear conditions quickly.

What is your Turnaround Time?

Every lender turns loan approvals around at different times. Find out a lender’s average turnaround time to ensure it fits within your contract’s timeline or your plans if you’re refinancing.

Final Thoughts

Take the time to ask your questions when you apply for a mortgage. A reputable loan officer should be able to provide you with all the details, so you understand the loan and choose the one that makes the most financial sense. 

If you have any additional questions about applying for a mortgage reach out to us today at 888-686-7701 or head over and request a quote!