10 Important Questions to Ask Your Mortgage Lender 

Published On: December 16, 2021

Published by:
Entrust Capital Funding

If you are planning on buying a home, there is plenty to learn. As daunting as it might seem, you don’t need to worry. Odds are you’ll get the hang of it along the way. Should you have any questions—no matter how simple or complex they might sound to you—you should never hesitate to ask for help. 

Ultimately, the home buying process is a learning experience and you never know if you might find yourself in this scenario sometime in the future. We outline some questions you should ask your lender before closing off on a mortgage that way you are very familiar with the terms of your loan. 

My credit isn’t as good as it could be. Can I still get a loan?

The answer is yes! You can get a loan that is suited for those with low or poor credit. The FHA mortgage loan accepts buyers with low credit scores because the loan is backed by the federal government. This is something you should discuss with your lender right away. 

How much of a down payment do I need to put down if I am a first-time homebuyer?

The standard of a down payment calls for 20% of the mortgage. However, applicants who qualify for a VA or FHA loan can possibly pay as little as 3.5% of their total mortgage for a down payment. However, if you can afford the 20%, you should do so. 

What will closing costs look like?

Closing costs typically include fees such as: 

  • Title search fees
  • Title insurance
  • Recording and transfer costs
  • Loan preparation fees 
  • Discount points to get a lower interest rate 

You can always ask your lender to provide a comprehensive rundown of what will be charged in closing costs. 

Does your interest rate include loan discount points?

Mortgage discount points are typically available to future homeowners who want to pay an upfront fee in order to gain a lower interest rate. Discount points are not mandatory, so this is something to prepare for if your lender doesn’t offer that. 

Do you charge any application fees, credit report fees, or any other upfront fees?

Some lenders will charge application fees. These fees are intended to cover the costs of processing your application for a new loan. These costs typically include credit checks and administrative expenses. Application fees vary depending on the work it takes to process your loan application. 

How long will it take to get my loan with the application to closing?

Oftentimes, a lender will quote a rate that is good for 30 days, but it can take a total of 45 days for your loan to close. If this timeline doesn’t work for you, you should ask your lender about how this can affect your plans. This applies to purchase as well as refinanced loans. 

Are there any prepayment penalties?

This fee is charged when you pay all or part of your mortgage loan off early. It may also come up if you ever decide to refinance for a lower rate. Lenders cannot charge early payoff penalties on FHA, VA, or USDA loans, other loan types may charge penalty fees. You should ask if this applies to your loan. 

Do you provide any down payment assistance programs?

Oftentimes, lenders offer down payment assistance programs and they are usually offered to veterans and first-time homebuyers. VA loans do not require down payments and offer lower interest rates. If you have limited savings, you should ask your lender what programs you might qualify for. 

When can I lock in the interest rate?

Interest rates are known to fluctuate. Locking in a rate can be helpful. You should inquire with your lender about when you can lock in a particular rate and for how long you will be able to keep it locked in. 

Can you estimate when the closing will be?

Many of the factors that determine the close date are out of your control as an applicant. Delays can happen and the best way to avoid them is to simply be in touch with your lender as much as possible. Asking your lender can help you get a rough idea of the timeline you’ll be working with. 

Get a Loan that Works for You with Entrust Capital Funding 

Entrust Capital Funding offers unique services you will not be able to find anywhere else. Our hard money loans can help you increase the value of your home, being able to price it for more, should you ever consider selling. Want to know more about our services? Give us a call today to learn more. 

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