Buying a home is one of the most important purchases you will ever make. Simplify the process and find a lender you can trust by asking these questions:
1) Can I get references?
Your realtor’s suggestion for a mortgage banker is never a bad thing; however, make sure this is someone you could trust by asking for references. Ask for the names and contact information from a few recent customers who have closed their loans. Follow up by calling these references to ask if they were treated fairly and if they would use them again. Use 3rd party websites to verify customer satisfaction (e.g., BBB).
2) How do you handle rate locks?
Interest rates fluctuate daily and sometimes hourly. If interest rates are going up, you might want to lock in your rate now. If they go back down, will your lender let you lock in at that lower rate? Working with a profession bank that can properly advise you on when to lock, can save you thousands over the life of your loan.
3) What mortgage types do you offer?
A conventional 20% down mortgage might not be right for you. As a veteran, you could benefit from a VA loan, or maybe an adjustable-rate mortgage would be ideal for your situation. Make sure your mortgage banker is willing and able to provide you with the best loan possible. If they don’t offer specific products for you to compare, you should contact a bank that does.
4) What are the full costs of my mortgage?
Shortly after filling out an application, your mortgage banker should provide you with a Good Faith Estimate. This document outlines line-by-line what your closing costs will be with the current mortgage rate and terms best suited for you. Use this information to shop around to different mortgage companies to find the best rates.
5) What documents do I need?
Mortgages require a lot of documentation. From copies of driver’s license to last year’s tax statements make sure you get a detailed list of everything needed to receive your loan upfront. Get these documents together as you are looking for a home to verify you are ready to lock in your rate.
6) How long will it take to process my loan?
If you plan to close on your new home in 30 days, make sure your mortgage banker can, too. The quicker you supply the needed documents, the sooner your banker can complete the appraisal and other documentation required to close your loan.
7) Is there a prepayment penalty?
In today’s market, prepayment penalties should not apply when you’re shopping for conventional, FHA and VA products.
8) How do you know if a realtor's lender or builder's lender is someone you should use?
Realtors/Builders usually have a business relationship with a lender. This could be good or bad for you as the customer. Make sure you shop for the best deal for you. Just because they use a specific company, doesn’t mean they have the best interest rate or lowest cost. In the end it’s your mortgage payment, and you deserve the best deal regardless of whom they want you to use.
When you have questions about home loans, talk to an expert at NASB. Give us a call at 855-465-0753.