What Questions Should I Ask a Broker or Loan Officer?
Trust me, we get it: Buying a new home is exciting, though stressful with how many things you need to know and learn during the financing process. If it weren’t, you wouldn’t need a mortgage broker or a loan officer to help navigate all the ins and outs of home buying! But just because it’s a normal part of the process, that doesn’t mean it isn’t frustrating to try to figure out how to get started. When shopping for a mortgage broker or loan officer, you want to make sure you’re choosing someone who makes you feel comfortable and confident and who you know has your best interests in mind. So we’ve pulled together some of the best questions to ask a loan officer when buying a house.
1. How much am I able to borrow when buying my home?
Let’s start with the big one: show me the money!
There are a few big factors that mortgage brokers, loan officers and other lenders consider when deciding how much you can borrow, including your income, how much debt you have, whether you’re employed and your credit history. How much you can borrow won’t necessarily be the same as your neighbor or even your coworker who makes the same amount as you.
Before you start looking for a house, you should discuss your price range with your loan officer; it may be one of the most important questions you ask them.
2. How much money should I put down?
As a rule of thumb, you should aim to put down at least 20% of a home’s purchase price, but that’s not a concrete rule. Your down payment will affect things like your interest rate and monthly payments, so you should ask your loan officer questions about what your minimum down payment should be when buying a house or if there are programs that offer cost-saving assistance. (FYI: There often are.)
3. What will my interest rate be?
While there are federal interest rate parameters, rates can still vary from lender to lender, so this is one of the most important questions to ask loan officers when choosing who to go with. What they tell you will help you make the right decision about which lender to go with, and what you can afford for payments.
When you’re asking lenders for quotes, make sure to ask about corresponding annual percentage rates, or APR. What the APR is will tell you about other fees and loan-related charges you’ll have to plan for.
4. Should I go with a fixed-rate mortgage or an adjustable-rate mortgage?
OK, these are a bit self-explanatory, but a fixed-rate mortgage means the interest rate on your loan will stay the same for the entire duration that you’re paying off your home. An adjustable-rate mortgage depends on the housing market and will go up and down.
Ask your lender questions about what the market is currently like, and whether they have predictions for the near future of the market.
There isn’t a hard-and-fast rule on what you should go with—it depends on the individual—so it’s important that you work with a lender you trust and understands your needs and situation so they can help you figure out the best solution.
5. What should I expect my closing costs to be?
After the down payment, interest rates, inspections and more—yep!—you’ve got closing costs. But having a ballpark on your closing costs before you start searching for a home will help you prepare. Closing costs cover factors like loan originator fees, appraisal fees, and attorney fees, if applicable. Ask your loan officer what your closing fees may be when buying a house so you know what to expect—this could be one of the most important questions you ask up-front.
6. Should I expect any delays in closing?
Unfortunately, buying your dream home isn’t like heading to the mall and coming home with your new favorite closet staple—it takes time and there can be delays along the way. When you start working with a lender, you should feel comfortable asking them what types of delays you should expect. Plus, when you work with a loan officer you trust, they should be able to keep you up to date if any changes occur and work in your best interest to keep delays from happening.
7. What should I know about any other costs or fees?
A good lender will make sure there aren’t any surprises because there’s nothing worse than being hit with more fees after you’ve already set aside the down payment and closing fees. A good lender will provide you with a Closing Disclosure that will lay out all the costs associated with your loan. When you include this question in your list of things to ask a loan officer, you’re more likely to find someone who works with your needs and makes sure you’re aware of all the ins and outs from the start.
Try out these questions to ask a loan officer on BAM!
Getting started is easy: Give us a call at Best Advantage Mortgage. We take the time to get to know you and your goals for buying a home and can answer all these questions to ask a loan officer when buying a house openly and honestly so you truly understand the home buying process. Hopefully, we can be the only call you need to make in finding the perfect lender partner. Contact us today to learn more!