10 Questions to Ask Your Lender

Great Advice Shannon, thanks for that many buyers will see this very helpful.

Shannon,  Great post!  As a lender, I hope you won't mind my two cents:

1). The facts are that most loans being written today are 30 year fixed and FHA.  There are some great intermediate ARM products available; however, the media has done a very good job of convincing the public that anything but a 30 year fixed loan is "toxic".  Too bad, because paying for 30 years terms on a 5 year plan is just wasteful.

2), If your lender doesn't focus on your goals, the lender is not going to know the best plan for you.  If is not just about rate and pricing!  Goals first...build from there!

3). Rates, fees and closing costs are ALWAYS negotiable...it is called buying up or buying down the rate with discount points or yield spread premium.  The actual costs do not vary (unless you are dealing with a not so ethical lender)....this is a myth, or marketing ploy, that needs flushing out immediately.

4). Typically, anything less than 20% down payment is going to require mortgage insurnance (government loans are one exception).  As for exact pricing quote...hard to say as there are slight variances company to company.  Most MI companies are now requiring their own underwriting seal of approval (underwriting) and one may decline the file while another approves it.  How long?  There is absolutlely NO way a lender can answer that question with certainty.  All loans require a Transfer of Servicing disclosure.  If I close the loan with one lender (and, its' own set of MI guidelines), there is no way I will know who the servicing lender will be in one, two or three years.   Typically, the equity base must be 20%  and the minimum period of time is 2 years....but, like tax advice, I would never make a blanket statement to a consumer.

5).  See Number 4.  No lender will commit to "we are never going to sell your loan".  Silly loan officer that makes the guarantee!

6).  Escrow varies lender to lender.  Usually anything less than 20% requires impounds.  NOTE:  ALL mortgages have a .25 point hit for waiving impounds...some lenders choose to price with the .25 hit incorporated in the pricing.  But, make no mistake, the .25 hit is there...disclosed or not.

7).  Certainly, be sure to clarify lock and terms....IN WRITING

8).  Depends entirely upon how thorough the loan officer does their job.  Bear in mind that virtually no lenders (in SoCal) are doing pre-approvals for TBD properties these days.

9).  Too many variable to answer on the "first date".  Will it take me one day or two weeks to get the HOA cert?  Banking or brokering the loan?  Personally, I would not attempt to close a 30 day escrow on a brokered loan in today's world...there are too many variables (including over zealous investors that want a secondary sign off on the file AFTER all conditions are satisfied).

10).  This should be determined by reviewing the rate lock disclosure.  Very rare these days, but pretty easy for a consumer to find out.

My point is that there are so many variable to financing that it is very difficult to make a "list".  Somewhat similar to all 3/2 houses being the same.... There is a base line, but the penduleum swings wide from left to right!

All my best,

Deborah