The Best Questions to Ask a Loan Officer When Buying a HouseBy Bill Gassett Are you wondering what you should ask the lender you're planning on using? What types of home loans are available? You need to find out if the lender offers the type of loan that suits your situation. While they will provide fixed-rate and adjustable-rate mortgages (ARMs), how long is the fixed-rate period on the ARMs? Which mortgage is right for me? Your lender should recommend the right mortgage based on the information you provide. They should give this in writing so you can see the benefits and the drawbacks, making it easier to compare to other loans. How much will the interest and annual percentage rate be on the loan? Two interest rates will be provided by the lender, one of these is the base interest rate, and the other is the annual percentage rate (APR). The APR includes the base interest rate along with the closing costs. What will the loan estimate be? A lender must estimate all the fees and closing costs added to the loan. The lender has to give this estimate within 3 business days of your completed loan application. What is going to happen if the home does not appraise? The lender requires the appraisal to ensure they are not lending more than the home is worth. If the appraisal value is lower than the amount you have offered for the home, an appraisal gap will have to be closed. In the underwriting completed in-house? Underwriting ensures that the information you have provided to the lender is correct and that you qualify for the loan. It matters if it is completed in-house so that you know what to expect and can contact them. How long will it take to process the loan? The lender should know the average time it takes to process mortgages. This can be important if the seller wants to move quickly. If you are refinancing, the average closing time is likely to be sooner due to an appraisal not always being necessary. Will my loan be sold? Though you might expect the lender to take your payments over the course of the mortgage, often, that isn’t the case. How much will servicing cost? Collecting and processing payments, as well as handling escrow, is known as servicing the loan. These fees can appear hidden, so make sure you ask about them. The lender might have an online payment fee that you will pay every time you make a payment. What do I need to bring to closing? Being ready for closing is essential, particularly if you have to travel to sign the contracts. You might need to bring your driver's license and cashier's check, but it is crucial to ensure you know exactly what is expected. |
Today's Top Stories |