When trying to get qualified for a mortgage, it is important to be as prepared to make the mortgage process as easy as possible. There are five basic questions you should ask your loan advisor to make sure that you are getting the best possible mortgage and to make sure that your mortgage will close on time.
What Is The Loan Program I Am Trying To Qualify For And What Are The Terms Of The Loan?
There are many different types of home loans and when applying for a mortgage, you need to know if you are applying for a VA, FHA, Conventional or any other type of mortgage program. Each program has different requirements when it comes to down payment, job history and credit score. Also, you need to ask your loan banker what the term of the mortgage will be. Are you applying for a fixed rate loan? Do you want a 15-year note or a 30-year note? Knowing the term of the mortgage and the loan program can make the process move faster.
Are There Any Upfront Cost?
Some lenders require an application deposit before taking your mortgage application. Sometimes, these deposits are nonrefundable. These deposits can increase your total closing cost. Most lenders will require customers to pay for the appraisal, which is now a common practice. Be prepared to pay for the appraisal, but there are several lenders who do not ask for an application deposit.
What Is The Rate and Fees For My Mortgage?
It is important to know the loan rate and the closing cost associated with the mortgage. When comparing mortgage offers, it is important to only compare the fees the mortgage company controls. These are called lender fees and they will make up section A of the Good Faith Estimate or on the HUD-1 form, these will be the fees in the 800 section. Typical lender fees are processing, underwriting, loan origination fee, application fee, discount points and document preparation.
To compare offers, see what the total lender fees are and the rate of the mortgage. For example, if one lender is charging $2000 in lender fees are a rate of 4.25% and another lender is charging $1500 for the same rate, obviously the second lender is cheaper.
What Are The Mortgage Turn Times?
Sometimes getting the lowest rate and lowest closing cost is not always the best deal. Lenders that charge less cannot always close your loan on time. The service you will receive from a company that is the lowest in price might not be the same from another company that is a little higher in closing cost. Think of it this way, do you expect to get better service from Wal-Mart or Macy’s?
If you are wanting the best service and want your loan to close on time, ask the lender if they have any closing guarantees. Some lenders have guaranteed closing to where if they miss the closing date, they will lower their fees. This is important if you are buying a new house and must close on a particular day.
What Are The Required Documentation Needed?
Always ask the loan consultant what the required documentation you will need to provide in order to process your loan request. Having these documents ready at time of application can greatly speed up your loan request. Basic income and asset documentation is usually what the company will require.
David White is a Sr. Mortgage Officer who helps his clients with Texas home loans. He has over 12 years experience with Dallas home loans.