10 Things to Ask Your Mortgage Lender

Once you’ve applied for quotes on home mortgages, you’ll need to take the next step. Here are some questions to ask mortgage lenders before deciding on a loan.

1. What’s my interest rate? Your interest rate is important because it will determine how much you pay per month and the amount you will pay over the life of the loan.
2. Is my interest rate fixed or variable? If your interest rate is going to fluctuate over the life of your home mortgage loan, you need to know this information up-front. Find out if your quotes on home mortgages offer fixed or adjustable-rate terms. If you are considering an adjustable-rate mortgage (ARM), find out how often the interest rate will change.
3. Do I have to pay discount points? Remember that discounts points let you “buy down” your interest rate up-front. Find out if this is an option for you. Also ask about origination points, which are a kind of processing fee.
4. What will my fees and closing costs be? A mortgage can look good on paper, but sometimes lenders omit the fees and costs they will charge you on your way out the door. Thus, it’s best to get an idea of your closing costs when you apply. Ask your lender for an estimate of closing costs. By law, they are required to provide you with an estimate within three days of applying.
5. How long will you lock in my interest rate? Lenders might be willing to lock in the interest rate they quoted you in your application for 30-60 days during processing.
6. How does a down payment influence the cost of my loan? For down payments less than 20%, you might have to pay for private mortgage insurance, which will cost you additional money.
7. What documents will I have to produce? Typical documentation includes income, employment information, social security number, and information on assets.
8. Can I pay my mortgage off early? Some lenders charge hefty pre-payment penalties, so find out what happens if you pay your loan off early.
9. How do I make my payments? You might have to send a check or you might be able to arrange automatic withdrawal from a checking or savings account.
10. How long will the closing process take? Two weeks is the average for processing and closing, but it can take up to 6-8 weeks.