How To Choose A Mortgage Lender and What Questions To Ask
Choosing a mortgage lender can be difficult. When it comes to dealing with a lender you always want to be prepared. When a lender sees that you take initiative they will most likely trust you more. How can you know what mortgage lender to choose? Before you decide there are some things to take care of first.
Boost Your Credit Score
Take a look at your finances and see where they are at. If you have a perfect score then awesome but if you’re like a lot of America there’s probably room for improvement. Find areas that you can fix to improve your credit score. Ensuring that you have the best credit score possible will support you in choosing a mortgage lender later.
Discover Your Budget
When you know how much you can comfortably spend a month that will help you narrow down a mortgage lender. Lenders preapprove you based on your gross income, outstanding loans and revolving debt but don’t look at your expenditures. Make sure your budget is ready to handle the monthly rent. Knowing how much you can pay will almost certainly help you and your lender.
Choose Your Lender
Don’t just choose the first person you meet with, shop around. According to research from Freddie Mac, borrowers can save around $1,500 over the life of their loan if they get at least one more quote. Likeability is also important to factor in when choosing a mortgage lender. This is a someone or a group you’ll be working with for a while so be sure you approve of their style.
Questions to Ask Your Lender
Knowing the right questions to ask is extremely important so let’s go through some to support you on your mortgage journey.
- How much can I borrow to buy a home?
Preparing your credit score and finances as stated before will affect the outcome of this question.
- How much money do I need to put down?
Discuss with your lender about the minimum down payment required for your loan and if you might be qualified for any down payment or cost-saving assistance programs, and decide what’s right for you.
- What’s the interest rate?
- What’s the difference between a fixed rate and an adjustable rate?
It’s important to compare these two types of mortgages to see which one works best for you.
- How can I lock in interest rates?
- What are my estimated closing costs?
- Are there cost or fees I should know about?
- Can you estimate when the closing will be?
This is important so that you have a timeframe to work with to prepare.
With these questions, you should have a solid foundation to meet with your new mortgage lender. This questions will support you going forward and help you prepare for the future. Be sure you write down any answers and mark any concerns you may have. Good luck with your future home owning endeavor with a stellar mortgage lender that you chose!