Ten Questions to Ask Your Mortgage Loan Officer When Buying a Home

When you buy a home you need to ask these ten questions of the mortgage provider you select to make sure you have a smooth transaction and get what you actually were promised when you submitted your application:

1. What type of entity is your company? Most home buyers get their mortgages from banks, mortgage bankers and mortgage brokers. While there are pros and cons to using each, it is important to know who you are dealing with. For example, mortgage brokers can find a great deal by shopping among multiple lenders for the best rate, but they cannot offer you a rate lock. Only a mortgage lender or bank can give you a rate lock.
2. Is your company properly licensed? Nearly every state has a current list of mortgage licensees right on their web site. Ask your mortgage provider what license they have and who regulates them so you know where to complain in case there is ever a problem.
3. What is your individual license number? Starting this year, every individual mortgage loan officer (unless they are a principal in their firm) must be licensed in addition to the company where they work. Check for this individual license number as well.
4. Who is actually funding my loan and guaranteeing my rate lock? A mortgage lender is responsible for providing a rate lock and the funds for your mortgage loan. If you are using a mortgage broker, make sure you know the lender and check to see that the lender is stable and will be around for your closing.
5. How long does it take you to process my loan? If you have a mortgage contingency date and a closing date that you have to meet, you need to make sure that your mortgage loan officer and his or her team can deliver the loan you need when you need it.
6. What is my loan program exactly? While this question is straightforward for typical 15, 20, 25 or 30 year fixed rate loans, any other program should have a disclosure form that goes with it. Get a copy of this disclosure, read it and understand it so you know what you are getting into.
7. If choosing an adjustable rate mortgage, what are the margin, index, annual caps and lifetime caps? Most home buyers using adjustable rate mortgages focus on the initial starting rate. But if you could end up with that mortgage when the rate adjusts, you need to know these numbers so you can figure out how bad your payments will be.
8. How bad could my payments ever be? If you have anything besides a fixed rate mortgage, ask your loan officer this question. If you can't afford to pay that worst case payment for at least a year, then do not get that type of loan.
9. Is there any type of pre-payment penalty? Find out how long the penalty is and how much it will cost you. Also find out if you can pay some principal off without penalty.
10. What are the exact closing costs? New rules will require exact closing cost disclosures, but until that is fully implemented, it is up to borrowers to find out exactly what those costs will be. A true mortgage professional will be able to be exact about your out-of-pocket costs.

For a free mortgage pre-approval and a review of your down payment options, please email us or call us at 1-877-868-2503.

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If you have any questions that you would like to get answered by our expert mortgage brokers, please email us or call us at 1-877-868-2503.

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