There are several questions you can ask a lender.
1. Do you represent a mortgage broker, mortgage banker, consumer finance company or a financial institute?
2. Are they licensed in your state?
3. What is the interest rate?
4. How long will the interest rate be locked in?
5. What are the broker's/bank fees?
6. What is the interest rate?
7. What are the costs associated with the loan?
8. What is the principal balance of the loan?
9. What will monthly payment be?
10. Due date of payments.
11. Term of loan.
12. Will loan be sold and to whom?
13. Who is the lender?
14. Is there a penalty for early payoff
15. What is the appraised value?
16. Are you going to be responsible for Private Mortgage Insurance (PMI)?
17. Who is the title company?
I hope this help with your search for a lender.
If you are respresented and have an agent, you agent may be able to refer you to a lender. Do your homework.
Also when your credit report is pulled by multiple financial institutions within a short window, it has minimal impact on your credit score, it is understood that you are shopping around for financing. If you went to a department store and applied for a credit card for example, you could potentially max out on that new credit card at that given moment, that type of activity will impacts your credit score.
You don't have to go through the whole preapproval process where they pull your credit, yyou give your financial documents (pay stubs, tax returns, bank statements, etc) ..but you can do a pre-qualification where they can use information you provide that may be limited to how much you earn, how much you owe, and how much you have saved.
During the prequalification --- and interview --- you should be able to determine and develop rapport with each one. At some point in time, you'll gauge which one you feel can meet your needs on many levels, including empathy and understanding of your situation, resourcefulness, responsiveness, and simple case of "connection"
I haven't had good experience with, and therefore I don't recommend working with out-of-state/area and different time zone lenders . You need someone whom you can call on a cell phone if necessary. Because invariably, if/when escrow gets hung up, it's probably due to a lending glitch. So your lender must be totally accessible and available to act on those challenges quickly and effectively.
Don't hold me to this, but I believe that if you have your credit run by multiple mortgage companies within a 30 day period it doesn't impact your credit any more than just one inquiry would. Something to keep in mind. Some mortgage brokers and lenders on here can confirm whether this is true or not, but that is my understanding.
Once you have found some lenders that you think you would like to deal with, ask them for an estimate of rates and terms such as closing costs up front before you give them your personal information on an application. Many lenders have their rates published right on their websites or you can use sites like bankrate.com to compare lenders before you even contact them.
The big things to understand up front are interest rates, fixed versus adjustable rates loans, points (prepaid interest), terms of the loan programs (credit score required, down payment required, income requirements), application costs, and closing costs. Be careful with ARMs and loans that have rates that are tied to floating indexes. With today's low rates I recommend that you consider fixed rate loans to lock in your rate long term.
Ask them to provide you with a Good Faith estimate which outlines your closing costs and compare each one for costs associated with your loan.
John G Moustis
President / Owner
SPARTAN CONSTRUCTION & DESIGN, INC.
Phone & Fax: 630-963-6020
Quality building, remodeling & consulting services in the Chicagoland area since 1991
A great question to ask ... "Broker/Lender what obstacles, if any, stand in the way for you to guarantee you will close + fund me?"
Faith Home Loans
We would talk on the phone or email back and forth and I had given him copies of all required documents (tax returns, W-2's, etc) so he could do full pre-approval. After a while, I would have to keep reminding him that I wanted USDA and not FHA after he would keep bringing up an FHA loan. The clincher for me to change was when we were emailing back and forth and he made the comment that "I don't know when the last time was I did an USDA mortgage." While it may not matter to another homebuyer, that was a dealbreaker for me. I wanted a lender who was very familiar with the USDA process and up to speed on all the recent news. Changed lenders and been very happy. And costs ended up being cheaper too - bonus!
A reputable broker or loan officer can give you a good idea about the costs and options for your loan quickly if you have all the pertinent information ready when you contact them.
The type of loan you are looking for, as well as the property it will be attached to would be part of how I would counsel you to look for a lender.
The landscape has changed dramatically over the last 30 months. Different types of banks and brokers have a variety of offerings, and not all equal.
If you'd like more details, drop me a line and in 10 minutes with you on the phone I can give you some direction and suggestions for how to look for the best loan for you.
(773) 732 9123
Americorp Real Estate
Brokers Associate, e-PRO
Unwavering Commitment to Service
If you are using a Realtor, they often have preferred lenders. Your answer may be there.
Another way is to ask friends and family who reputable lenders are that they have used.
Make objective decisions on your choices from there.
1) To Avoid multiple credit report runs and still get multiple pre-approvals...
What I suggest to my clients who are shopping around mortgage brokers/bankers is to submit application with your 1st mortgage resource. Ask them for a copy of your credit report, which they have run for you. You can then provide that credit report to the next possible mortgage resource. Tell them you undertsand that they may need to run their own credit report for validity purposes should you decide to hire them, but they should be able to assume the one you provide is legitimate and then quote you different loan products.
2) Initial Questions to ask mortgage brokers/bankers...
A) What is the loan product (FHA, 30-yr conventional, 3-yr ARM, etc...)
B) What is the interest rate?
C) What are the mortgage broker's closing costs? Be sure to get specifics. "Processing
Fee"? "Application Fee"? "Appraisal Fee"?
With these three specific questions answered, you should be able to adequately compare different mortgage broker quotes.
Keep in mind that loan officers typically earn 2 ways, through their loan processing/application fees and the yield spread premium(premium paid to loan officers on DIFFERENCE of interest rate they are getting the loan product for and the interest rate they are giving to the consumer)
If you are in need of any professional resources, please contact me.
Realty Executives SourceOne
I always recommend to my buyer clients to get a pre approval from at least 2 lender, not necessarily more. The reason for that is two fold: a) you shop for your loan (most buyers don't know they should do this, it's no different than shopping for the right home); b) if the lender knows you're shopping around they will do their utmost best effort to compete to get your business.
I recommended this to a client that took my advise and that client went from a 5.375% interest to a 4.875, simply because of comparison shopping. Who do you think got the best of this scenario?
If you don't have a buyers agent please feel free to contact me directly & I will not only guide you but also provide you with financial resources.
Hope this helps & good luck!
Good luck to you,
Unwavering Commitment to Service
I'm not sure why you would be told that. You only need one pre-approval. However, you should research as Terri just said. You can find out a lot of information before choosing a lender. They have to get your written permission to obtain your credit, so do not give them permission until you are pretty comfortable with your choice.
When searching for a lender the first thing to do is ask friends who they used and ask if they were satisfied with the services. Find a local lender because they know your market best. When interviewing lenders, ask what their fees are, origination and processing including all other fees. Ask if they will sell your mortgage or keep it. You don't want your mortgage sold numerous times. Ask how many successful closings they had and rather they were FHA, conventional or VA. Also ask what their typical closing time is. Most lenders take proximately 30 days, and charge an origination fee of 1%. Hope this was helpful. Good luck.