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Questions to Ask your Loan Officer When Getting Approved for a Mortgage

Posted by  on Apr 16, 2009
 
In these times of scams and fraud we are all a bit more hesitant to trust someone with our money — and with good reason, unfortunately. So when you're ready to begin to talk to a loan officer about the loan you will need for your home purchase, you need to be on guard and asking the right questions in order to get the deal you deserve and the loan you want.

  • Are you a lender or a broker? — Often, you will need to double check on this to make sure that you're not dealing with someone that is actually not qualified to offer you a loan. You need to make sure they have the authority to qualify you for the money you need.
  • When you are dealing with a broker, you will want to see if you will need to pay them for their services — in most cases you will. Try to find out what the money will be going to and why the rates are what they are. In some cases, you might be able to get a reduced interest rate when the broker is getting compensated by the lender.
  • Are insurance and escrow costs included in the mortgage? These costs can be added to most loan agreements, so you will want to make sure they can be added as a part of the services you are receiving.
  • Will I get fined if I complete my house payments early? If you plan on paying off your home early, this will be a question you need to ask.
  • What do I need to bring to the loan appointment? Before you even head to the loan officer, you will need to ask what papers and documentation you will need in advance of arriving. This will save you time and help them with finding you the best loan for your situation.
  • What's the loan's Interest Rate and Annual Percentage Rate? It sounds basic, but if you're not completely sure what your loan's interest rate and APR is, you might be signing up for something that you can not afford.
  • How many points are to be charged? The question of points is one that most people do not understand in relation to their home buying experience, but this ignorance can be an expensive mistake. Each point is one percent of the loan amount and will be charged to the loan itself, depending on the lender.
  • Is there a lock in policy? If you sign up for a loan in a certain time period, some lenders will let you lock in a certain interest rate and discount points. Though you might have to pay a fee, it can be well worth the cost
  • How long will everything take? Finding out how long the process can take is not only a matter of convenience, but also will give you a sense of whether or not you might want to go to another lender if it's a long time.
  • What are the closing fees? Find out every fee that you can before you get stuck with the bill at the end of the transaction.

You will probably come up with additional questions as you are sitting with the loan officer, so be sure to ask everything that you can and write down any questions that you might want answered after the fact.

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