20 Questions Buyers Should Ask a Mortgage Lender

Looking for answers about mortgages? You need to know the questions first.

by Carolyn Rogers   

Most buyers - especially first-timers - know only one question to ask when shopping for a mortgage: What is your interest rate?

There is a lot more to the mortgage process than getting a good rate. High costs in fees and poor service sometimes come as a very unhappy surprise.

Here's a list of suggested questions a buyer might ask a lender:

1. How large is your company, and how long has it been in business?
2. How long have you been working in the mortgage loan business?
3. Are you a licensed mortgage broker or loan officer in Texas?
4. What is the process for funding and when will the loan fund (after or at closing)?
5. What is the difference between a mortgage banker and a mortgage broker?
6. What is the name and phone number (and e-mail address) of the person who will actually be processing my loan application? How accessible is that person?
7. Tell me about all loan fees. What fees must I pay up front? What fees will I have to pay at closing?
8. When will I get a Good Faith Estimate of the costs of the loan?
9. Do the costs you are quoting include the lender origination fee?
10. Are there loans available with not origination fee? No closing costs? Reduced closing costs?
11. What are your interest rates?
12. Tell me about any programs you have to lock in my interest rate. Is there a fee? How long can I lock the rate? If interest rates go down, can I relock at the lower rate? If so, will there be a fee for that?
13. What information must I provide to get a mortgage loan?
14. What documentation will I have to provide?
15. Will you require current tax returns (Take note of this especially between Jan. 1 and April 15 if you haven't prepared your return yet.)
16. How long will it take to get complete and unequivocal loan approval and be ready to close?
17. I plan to stay in this house for ____ years. Can you show me the breakdown of any ARM loans you offer vs. fixed-rate loans to see which could save me the most money in my situation? Do you have any other loan programs that might be good for my situation?
18. What is the private mortgage insurance. Other than a 20% down payment, how can I avoid the private mortgage insurance?
19. In the last three months, how many loan applications have you taken and how many have you been able to close?
20. Can you give me names and phone numbers of two or three people for whom you've funded loans in the last two months?