What to ask
your loan officer
Whenever you are going to apply
for a loan, you will probably
have a lot of questions. Even if you
have done your own homework about
loans, there are questions you should
ask your loan officer.
The article, “10 Questions To
Ask Your Loan Officer,” published
on themortgagewire.com, gives you
10 sample questions to ask your loan
officer, that should make you feel
more comfortable about taking out
a large loan.
- What's the loan's Interest
Rate and Annual Percentage Rate?
“The APR is a combination
of the interest rate, points and
other charges divided by the loan’s
term to give an annualized rate.”
It is the best way to compare loan
- How Many Points Will
One point is equivalent to one percent
of the original loan amount. Points
are added on to the loan after the
interest rate. As a result, a loan
with a lower interest rate but higher
points could end up costing you
thousands of more dollars than a
loan with higher interest rates
and lower points.
- What will be the Total
Closing Cost Fees Charged?
“Lenders charge fees for the
services incurred to process and
your mortgage. By law, closing
costs must be disclosed within 3
days of the loan application, however,
there are different approaches to
calculating them. Some brokers will
initially disclose closing cost
figures which are very appealing,
only to provide much higher costs
as your closing date approaches.”
- Is There a "Lock-In"
Basically, you should ask if there
is an additional charge to “Lock-In”
an interest rate and discount points.
Even if there is an additional charge,
choosing a lock-in feature could
save you thousands of dollars in
- How Long Does it Take
This will depend on type of loan.
The loan process, meaning the time
it takes from the completed paperwork
to be approved, to eventually be
funded, should take about seven
to 10 business days.
- Are You a VA Automatic
or FHA Direct endorsement Lender?
“VA automatic and FHA direct
endorsement means that a lender
has met all the government requirements
for FHA/VA and the lender’s
underwriter has completed mandatory
education requirements. An automatic
or direct endorsement lender can
approve or disapprove a loan just
as if the loan had been sent directly
to the regional FHA or VA office.”
- Can I Finance the Upfront
Private Mortgage Insurance (PMI)
“Premium into the Loan Amount?
If your down payment is less than
twenty percent of the sale price,
to qualify, you will be charged
PMI, an insurance premium to protect
the lender in case you or someone
else who assumes your loan defaults
on the loan.”
- Is There a Pre-Payment
There usually is no penalty to prepay
a loan ask long as you give the
loan officer notice that you are
going to be selling or refinancing.
But different loan officers have
policies, so make sure you ask.
- What is the Lender’s
“It’s important to rate
your lenders reputation for speedy
processing, knowledgeable loan service
and meeting contract deadlines.
You want to hire
a mortgage broker who will treat
you the way you want to be treated
and has respect for your purchase.”
- What Do You Offer to
the First Time Buyer? (If applicable)
“If you are a first time borrower,
make sure your lender knows this.
He or she will slowly explain everything
in the documents and they sometimes
offer special rates and discounts.”