| Below are top key questions to
ask the mortgage lender or broker. You can use
the information gathered as a basis for comparing
loans. In the end, you’ll see which loan
adds up to the best deal for your circumstances.
How long will it take to process my mortgage
loan application?
Usually it takes about 45 to 60 days, although
it can take as few as 30 days and as long as 90
days for some transactions. The actual time depends
on how quickly the lender can get an appraisal
of the property, a credit report and verification
of employment and bank accounts.
What documents do I have to provide?
You will need to provide proof of income and
assets in order to get a mortgage loan. Different
lenders may require more or less of these documents.
See section on necessary paperwork.
What are the qualifying guidelines for the
particular loan?
The qualifying guidelines can relate to your
income, employment, assets and liabilities, and
credit history. Remember some first-time home
buyer programs and government- sponsored loans
have easier qualifying guidelines. See section
on special and first-time buyer programs.
It’s a good idea to know what type of mortgage
you want, such as fixed or adjustable rate, when
you start loan shopping. For more, see the section
on types of mortgages.
What is the minimum down payment?
Depending on the amount of the down payment,
you can get different interest rates, loan terms,
and avoid private mortgage insurance. Some loans
require the standard 20 percent down payment;
others are special low down payment programs.
For more, see the sections on the down payment
and private mortgage insurance.
What is the annual percentage rate of the
mortgage interest?
To effectively compare different lenders’
programs, ask for the annual percentage rate,
or APR, of the mortgage interest, which is generally
higher than the initial quoted rate because it
includes all lenders’ fees. For more information,
see the section on what lenders must do.
What are the points or origination fees on
the loan, if any?
Points are prepaid mortgage interest, and you
may have to pay points at closing in order to
get a lower interest rate on your mortgage loan.
For more, see section on points.
Can I lock in the interest rate?
The interest rate of the mortgage you're applying
for may go up or down before you close on the
home. That’s why it may be wise to lock
in the rate for a specified period of time, rather
than let the rate float until the closing. Be
sure to ask the lender if there is any fee for
locking in the rate and whether you also can lock
in points. To keep up with the daily changes in
rates, check out bankrate.com’s nationwide
survey of mortgage rates.
What is the 'good faith estimate' of closing
costs?
Mortgages come with a list of fees. Ask for a
list of estimated closing costs before applying
for the loan. See section on the good faith estimate.
Also, remember that some fees must be paid upfront
such as the credit report, property appraisal
and loan application fee.
Find out if you can get a refund of the loan
application fee if you change your mind. Some
lenders may only refund the fee if they turn down
your application.
Is there a prepayment penalty on the loan?
The prepayment question is for all loan shoppers.
Find out the duration of any penalty period and
how the fee would be calculated. Some penalties
are 1 percent of the loan amount: others are more
complicated. Knowing how much the prepayment penalty
would be is important if you think you will sell
the home before the mortgage is paid off, which
most homeowners do.
What can delay the approval of my loan?
If you provide the lender with complete, accurate
information, everything should go smoothly. However,
there could be a delay if the lender discovers
credit problems, which is why it is critical to
get your credit in order. See the bankrate.com
special report on credit reports.
Notify your lender if your personal or financial
status changes between the time you submit an
application and the time the loan is funded. If
you change jobs, get an increase or decrease in
salary, incur additional debt or change your marital
status, you must let the lender know.
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