Questions To Ask Your Lender When Applying For A Mortgage
Purchasing a home can be an exciting time. It can also be an experience that leaves you feeling overwhelmed with questions and uncertainty. This is particularly true if it is your first time buying a home.
One of the first hurdles you will need to overcome in the home buying process is determining what financing options are available to you. In fact, it is wise to speak with a lender prior to even starting your search for the perfect home. This will help you understand what you can actually afford, giving you a better chance of choosing something within your budget.
When you first reach out to speak with a lender about the possibility of a conventional mortgage, you might not even be sure what to expect. The good news is that your lender is there to help. They should be open to plenty of questions, and they should be willing to give you unlimited amounts of advice.
Prior to contacting a lender, put together a list of questions to ask. Check out the following six questions that you can ask your lender when applying for a mortgage. Each question will shed invaluable insight into the buying process.
#1: What Loan Types Are Available To Me?
One size doesn’t fit all in the case of mortgages. In fact, there are numerous options available and which mortgage type is right for you is going to be determined by a variety of factors. Be sure that you ask your lender about the variety of mortgages available to you.
For example, the following are a few different loan types you might want to consider:
- VA Loans
- Conventional Loans
- USDA Loans
- Jumbo Loans
- FHA Loans
- Construction Loans
#2: Is Now The Ideal Time For Me To Buy A Home?
If you are purchasing your first home, you have likely spent a lot of time thinking about your decision. It isn’t easy to know exactly when the ideal time is to purchase a home. Whether you are tired of renting or you are settling down and need space for your growing family, there are a lot of reasons why you might have decided to start the home buying process.
During the early stages of looking into your lending options, it is worthwhile to ask for the advice of your lender. Is now the ideal time for you to buy a home or should you work on a few things first?
For example, your lender might recommend that you focus on cleaning up your credit score prior to purchasing a home. A higher credit score could translate to lower interest rates. Over time, these lower interest rates could save you thousands of dollars.
Another example of why you might need to wait a little longer could be due to your lack of savings for a down payment. While there are programs available for first time home buyers that negate the need for a large amount of money down, this can lead to higher costs in other areas. Talk to your lender to see if they think you are in the right position to buy.
#3: How Much Money Will I Need For Additional Costs?
Unfortunately, purchasing a home isn’t as straightforward as you might think. The price tag you see on a home isn’t all you will need to pay. There are closing costs, fees for inspections, and potential remediations you need to make.
Talk to your lender about how much you will need to cover all these additional costs. It is far better to know what you are going into up front than to enter the contract blindly. You can also speak with your lender about options for rolling some of these costs into your actual mortgage. For example, first time home buyer loans often give you the opportunity to add your closing costs into your total loan amount. This can help cut down on the amount of money you need on hand to close a deal.
#4: What Is The Normal Time Frame For Approval?
The last thing you want is to find your dream home, put in an offer, and then fail to purchase your home due to your lender dragging their feet. Talk to your lender upfront about the time frame involved for approval.
Ask about how their process works and how quickly they can move if you find the right home. Make sure you understand the difference between being pre-qualified for a loan and pre-approved. Get detailed information about how the entire process will work.
#5: What Down Payment Will Be Required?
The amount of money you can put down on a house will determine a lot about the right mortgage for your needs. Ask about the down payment requirements for different loan options. There are specific mortgages available geared towards those with less money to put down.
Conversely, if you can save back a decent amount to put down on a house, say 25% or more, you can be eligible for better rates and you can avoid spending more on extraneous costs, such as PMI (Private Mortgage Insurance).
Make sure you have a clear understanding of what down payment you will be expected to make.
#6: How Will You Communicate With Me Going Forward?
The loan approval process is not always simple or fast. In some cases, delays can occur and more information will be required from you. Be sure that you understand how your lender will be communicating with you going forward.
A good lender should be in close communication with you. They should make it easy to get ahold of them with questions and they should never leave you waiting in the dark. Purchasing a home can be stressful enough, make sure that the team you choose is working to reduce that stress, not make it worse by being unresponsive.
Here at Patriot Home Mortgage, we are passionate about helping people find the right funding for the purchase of a home. From VA loans to FHA mortgage loans, we are equipped to assist you in finding the right lender for your needs. Reach out to our team today to learn more about how you can finance your future home.