Q: Besides comparing mortgage rates, what else should I look for when choosing a lender?
A: In addition to the interest rate you pay, there are typically a number of fees associated with a mortgage. Many of these are paid upfront as closing costs, but some, like mortgage insurance may be ongoing. It is also worth knowing what the prepayment fee is - that is a fee that is charged if you repay your mortgage early, which could come into play if you sell the home or refinance the mortgage within the time period covered by the prepayment fee.
For any prospective loan, ask the lender to provide a written list of all charges, and plug the numbers into a mortgage calculator to put rates and fees in the proper perspective.
Beyond cost, the experience, diligence, and knowledge of your loan officer are also important. A good loan officer should be familiar with a variety of different loan programs and guide you to the best mortgage for your situation. Experience comes into play in giving you a realistic assessment of your chances of getting approved for a loan, and in helping to guide your application through the approval process.
Some questions to ask your lender:
- How long have you been a mortgage loan officer?
- How long have you been with your current company?
- What different loan programs do you work with?
- How many mortgages do you get approved each month?
Take note of what questions the loan officer asks about you - the more detailed the effort to understand your situation, the better the chances the loan officer is truly concerned about loan suitability.
Work with a loan officer who demonstrates the expertise to facilitate your application's approval.