HELPFUL QUESTIONS TO ASK A POTENTIAL LENDER

1. What loan programs do you offer? Can you do FHA, VA, USDA, and Conventional?

2. Are you familiar with local downpayment assistance and affordable purchase programs?

3. What are the fees and/or costs and when are they due? Are the fees guaranteed?

4. Will you be at my closing?

5. What type of loan is best for my situation?

6. What is the current interest rate and annual percentage rate?

7. Do you offer loan rate locks? If yes, what are the fees for this? What is the timeframe for a rate lock?

8. How long has your company been operating locally?

9. How long have you worked in the industry?

10. Will you supply a Closing Cost Worksheet and a Truth In Lending statement?

Notes:

Finding Your Lender

You’re in charge of who you want to chose as your lender. Feel free to ask your Real Estate Agent, family, friends, or other trusted individuals for advice, but remember, the choice is yours. Referrals are the best source for finding your lender.

Not every lender is going to be the right lender for you. Ask as many questions as you need in order to find the lender you feel most comfortable with. Once you’ve chosen a lender, make sure they fully understand your financial situation so they can best support you through the mortgage loan process.

Pre-Qualification

A Lender will ask you the information about your income, credit history, and debts. They’ll use this information to calculate housing affordability ratios and tell you the following:

» Potential loan amount, using interest rates and loan programs currently available

» What price point you should look at, based on that loan amount

» Down payment amount you will need

» Your monthly payment amount

There is no fee to receive a pre-qualification, however, it is not a guarantee that you’ll be approved for a loan.

Pre-Approval

A Lender will verify your income, assets, and credit to determine if you qualify, and for how much. You may qualify for more mortgage than you can afford, so it’s important to know your numbers (page 36)! Know exactly how much you can comfortably afford and don’t exceed that amount.

The Lender will base their decision on your gross income, including ALL of your income from employment, alimony, child support, Social Security, disability, interest income, and more. Ask your Lender if you have specific questions.

Pre-approval = verified information & Underwriter approved

Guaranteed

This is one of the most frequently asked questions when it comes to homeownership. To answer this question, look at yourself through the lens of the Lender. The Lender has two main concerns. First, they want to make sure you can afford the home you want to purchase, or in other words, you are likely to repay the loan, and second, is the house you want to purchase worth the price you are paying for it. Lenders look at four different factors called the Four C’s of Credit.

Capital

The money you have available to cover:

» down payment

» closing costs

» reserves

Credit History

» how much money do you owe?

» history of repayment of borrowed money

» credit score/report

Capacity

» your ability to make monthly mortgage payments

Everything you’ve ever wanted to know about mortgages, and more...

Collateral

» the house you purchase will be collateral or security for the loan

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