When Applying for a Mortgage, Ask These 5 Questions

When applying for a mortgage loan, it is important to be as prepared to make the loan process as easy as possible. There are five basic questions you should ask your mortgage officer to make sure that you are getting the best possible mortgage and to make sure that your loan will close on time.

What Is The Mortgage Program I Am Trying To Qualify For And What Are The Terms Of The Mortgage? There are several different types of home loans and when qualifying for a home loan, you need to know if you are trying to qualify for a FHA, VA, Conventional or any other type of loan program. Each program has different requirements when it comes to down payment, job history and credit score. Also, you need to ask your loan consultant what the term of the mortgage will be. Are you applying for a fixed rate mortgage? Do you want a 30-year note or a 15-year note? Understanding the term of the mortgage and the loan program can make the process move faster.

Are There Any Upfront Costs? Some mortgage lenders require an application deposit before taking your loan application. Sometimes, these deposits are nonrefundable. These deposits can increase your total closing cost. Most mortgage lenders will require customers to pay for the appraisal, which is now a common practice. Be prepared to pay for the appraisal, but there are many lenders who do not ask for an application deposit.

What Is The Rate and Fees For My Mortgage Loan? It is important to know the mortgage rate and the closing cost connected with the mortgage loan. When comparing mortgage offers, it is important to only compare the fees the mortgage lender controls. These are called lender fees and they will make up section A of the Good Faith Estimate or on the HUD-1 form, these will be the fees in the 800 section. Common lender fees are underwriting, processing, document preparation, application fee, loan origination fee and discount points. To compare offers, see what the total lender fees are and the rate of the mortgage. For example, if one lender is charging $2000 in lender fees are a rate of 4.25% and another lender is charging $1500 for the same rate, obviously the second lender is cheaper.

What Are The Mortgage Turn Times? Sometimes getting the lowest rate and lowest closing cost is not always the better deal. Mortgage lenders that charge less cannot always close your loan on time. The service you will receive from a company that is the lowest in price might not be the same from another company that is a little higher in closing cost. Think of it this way, do you expect to get better service from Wal-Mart or Macy's? If you want the best service and want your mortgage to close on time, ask the lender if they have any closing guarantees. Some companies have guaranteed closing to where if they miss the closing date, they will reduce their fees. This is important if you are purchasing a new home and must close on a particular day.

What Is The Required Documentation Needed? Always ask the mortgage consultant what the required documentation you will need to provide in order to process your mortgage loan request. Having these documents ready at time of application can greatly speed up your loan request. Basic asset and income documentation is commonly what the lender will require.

We hope you have found this information valuable. We currently offer numerous custom loan programs to fit your needs. Please contact us at 716-685-9696 to set up your FREE No-Obligation consultation where we will meet to tailor a program to fit your needs and comfort levels for monthly payment and investment.


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Ron Fronckowiak

Licensed Mortgage Professional

NMLS ID 7054