Finding the Perfect Lender: Key Questions to Ask Before Signing on the Dotted Line
Buying a home is exciting, but choosing the right mortgage lender is crucial! With varying loan terms, rates, and products between companies, asking the right questions ensures you get the best deal. Here are some key questions to ask:
General Questions Questions to Ask When Choosing a Lender:
- Popular Choices: What are your most popular mortgages and why? Which type best fits my situation?
- Negotiation: Can you negotiate rates, terms, fees, or closing costs? Do you offer discounts for extras like inspections or automatic payments?
- Mortgage Insurance: Will I need private mortgage insurance (PMI)? How much will it cost and for how long?
- Escrow and Bills: What are your escrow requirements and bill-pay options?
Loan-Specific Questions:
- Payment Details: What’s included in my monthly payment (insurance, taxes, etc.)?
- Loan Servicing: Who will service my loan (the company I pay each month)?
- Rate Lock: How long can I lock in this rate? Can I get a lower rate if market rates fall?
- Approval and Closing: How long will it take to approve my loan and close the deal?
- Prepayment and Costs: Are there any prepayment penalties? What’s the total cost of the loan over its lifetime?
Government-Mandated Documents:
Remember, federal law requires lenders to provide two key documents:
- Loan Estimate: Within 3 days of applying, you’ll receive a Loan Estimate outlining estimated monthly payments and closing costs.
- Closing Disclosure: At least 3 business days before closing, you’ll get a Closing Disclosure with final closing costs and who receives payment at closing.
By asking these questions and understanding the provided documents, you’ll be well-equipped to select a lender who offers the best loan product and terms for your unique needs and budget. Remember, taking your time and shopping around can save you money and ensure a smooth homebuying experience!
