Are You Asking the right Questions when you shop for a Mortgage?

Being in the Mortgage Business since 1987 as owner of The Mortgage Outlet, I am always amazed on how the home buying and refinancing population has been taught by our lenders to ask a limited amount of questions to a potential lender when shopping for a new mortgage, and here they are:

 

What is your Interest Rate?

What is the APR?

What are your Points?

 

None of these questions can help you determine if you qualify for that program or that interest rate.  All lenders want is for you to call them, which is why they offer extremely low rates, which are not for everyone because of their loan assumptions and disclosures.  Below is a disclosure from a lenders web site which all web sites have somewhere, but many consumers do not review them.

 

Chart data is for illustrative purposes only, is based upon certain loan assumptions (see Loan assumptions and disclosures) in addition to information you provided, and is subject to change without notice. Assumes a borrower with excellent credit. Accuracy is not guaranteed and products may not be available for your situation.

 

If you do not click on the assumptions and disclosures how would you know what the other conditions are to qualify for this rates being quoted on the Internet. 

 

So lets look at this for a moment:

• Accuracy is not guaranteed and products may not be available for your situation, isn't that what the loan officer is for to review your paperwork prior to application and make sure the product is available to you. 

 

• Subject to change without notice, so if I do not qualify for the loan program no one has to tell me this, when would I be informed about my different rate?

 

• Assumes a borrower with excellent credit, what credit score is considered excellent, 760, 740, 720  how can you know it you qualify.  I know what your credit score is from day one when I talk with borrowers

 

The Federal Government and the Dodd-Frank Act of 2010 would never allow a mortgage broker to get away with these assumptions as it is our responsibility to know where the borrower is prior to taking a mortgage application. The only item we have no idea about is the loan to value as the appraisal is not ordered until after the application is taken.

 

Prior to shopping for rates on the Internet or by going to your local branch make sure you know what your middle credit score is, what your loan to value is, what down payment you have, and what your income is, because without this you are lost before you start. 

 

 

Here are the 10 questions I would ask prior to picking a lender and I would keep a check list to compare the answers.

1. What  is the Minimum Credit Score I Need to get this Rate? Get an actual number
2. What is the Minimum Down Payment I Need to get this Rate? 
3. Who controls when my Interest Rate can be locked in and can it change after being locked? 
4. Am I Applying for a Qualified or Non-Qualified Mortgage?
5. How long will it take to for my application to get an approval back from underwriting?
6. What Debt-to-Income Ratio do i need to qualify?
7. Will I have one direct person handling my mortgage application?
8. Where will my closing be and who will be handing it?
9. What service does the loan officer provide after my application is taken or are they just a data collector?
10. Lastly but not the least can I get some testimonials from past clients who you have work with?

 

Remember that these questions are not time sensitive so you can ask them over days or weeks of research prior to finding the best match for you. It should also be know that many loan officer's at the bank are only registered and not licensed so they might not have this information as they are quoting information off of their  bank's assumptions.  Hopefully this will give today's borrowers a greater grasp as to what is actually needed to determine if that lender is your best option to take a mortgage with. 

You can always get another opinion or start another application if you are unsatisfied with the service you are getting. We have a special 30 day closing program for those of you that qualify here.  You can always call me at 631-589-3600 and speak with me directly or one of my team members or email me at david.bailey@themortgageoutlet.org

  

 

 

 

 

-- 
David Bailey, NMLS # 3458

Erika Bailey, NMLS # 217190 

Owner, The Mortgage Outlet, NMLS # 36861

Office # 631-589-3600

David Cell # 631-767-8948

Erika Cell # 631 767 8944

Fax # 866-466-5218

http://www.themortgageoutlet.us/

http://www.reversemortgagesfornewyorkers.com/

http://www.vamortgagesfornewyorkers.com/

 

The Mortgage Outlet, NMLS # 36861 is a registered mortgage broker NYS Department of Financial Services. All loans are arranged through third party providers