When interviewing mortgage lenders, buyers need to know what questions to ask. The interview process should be completed within a thirty day period, in order to have the least impact on your credit score. Following is a list of some important questions:
· Define the types of mortgages offered. When asking this question, define to the lender your current situation and future goals. Basically, loans breakdown into 2 major categories of loans, fixed and adjustable rate mortgages. Remember some lenders have a large variation of these types of loans, while other lenders offer few variations.
· Ask lender to explain what and why a particular loan is the best fit for your situation. A lender should be able to answer this question after you have completed the loan application.
· Determine the full cost of your mortgage. The best way to get a handle on the full cost of your loan is to request a Good Faith Estimate from your lender. This report provides an estimate for the following items: amount of pre-paid expenses, amount of closing cost expenses, down payment, interest rate charged for the loan, amount of cash you will be required to bring to closing, and finally your monthly mortgage payments. In addition, the Good Faith Estimate defines which charges can change prior to closing, and which charges must remain the same.
· The Final Closing Statement known as HUD-1 should be provided to the buyer as least 1 day prior to closing. In addition, the buyer has the right to ask questions concerning this statement.
· What documents will I be required to provide the lender in order to be approved for a loan? Normally, you will be required provide proof of income, employment, statements of expenses and debt. If self-employed or an investor, lenders will require tax returns, IRS 1099 forms, profit and loss statements. Finally, you will need to give permission to pull your credit report.
· Have the lender define the qualifying guidelines for the loan.
· Based on your state, determine the title company and escrow officer, or if you need an attorney. This is needed to insure the property you purchase is free and clear.
· Find out how long it will take to process your loan. The answer to this question may be contingent upon on how fast you supply the required documents, work load of lender, inspections, appraisers and if any other professionals needed. The answer to this question is the lender’s best quest, but it helps to determine when to lock-in your interest rate.
· Find out what might delay your loan. Some of the things that may delay processing would be: slow delivery of requested documents, partially or not completing documents, and lender not able to get answers to questions. Buyer should be accessible and available during the loan application process through the funding of the loan. Finally, buyer must notify lender of any changes to their job, salary, debts, and marital status.
· Find out whether the loan will be sold, and if sold what is the procedure the buyer must follow. Old and new service companies are required to notify you in writing, so you will know who to pay.
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