How to Interview a Potential Mortgage Lender
As homebuyers, you never want to just work with the first mortgage lender that you come across. Unfortunately, many buyers are forced into this situation because they have waited until the last minute to work on securing a mortgage.
To make the most out of your home buying experience, and possibly save thousands of dollars, you will want to interview several mortgage lenders before deciding which one you want to work with.
Here are questions to ask a potential mortgage lender during your interview process.
-
Should I be Buying in My Situation?
Your mortgage lender will need to know the details of your financial situation. They will have to look at how much money you are bringing in and how much debt you already have.
With this information they will calculate your debt-to-income ratio. They will also look at your assets, your credit history, and your credit score.
All of these things together will help your lender determine if you are a high risk or if you are safe to loan money to. You want to work with an honest mortgage lender that isn’t just going to tell you what you want to hear.
-
What Changes Do I Need to Make to Get a Better Rate?
Your mortgage lender will be able to see the details of your credit report. They will know what is affecting your score and what you need to do to improve it as well.
Ask your lender what you can do and then see what they say. An experienced lender will be able to tell you which loans you should focus on paying off first and how long it will take to get your score up high enough to lower the interest rate that you can get on a mortgage.
-
Will it Help Me to Pay Points?
Paying for points on your mortgage can help you get a lower interest rate. However, it will also cost you. A good mortgage lender will provide you with the details of how this works and be able to steer you toward making the right decision.
-
What Are My Closing Costs?
Depending on when you interview your mortgage lender, there is a very good chance that they will not be able to give you a specific answer. However, they should be able to provide you with details of what types of items will be included with closing.
-
Will You Service My Loan?
Some mortgage lenders continue to service the loan through the life of the loan, and others sell the loan or have a third party company that handles the loan once it is closed. Your lender may not be able to guarantee who will service the loan if they are selling it off, but they should be able to share enough information to make you feel comfortable with the whole process.
As you interview potential mortgage lenders watch their responses. Do they seem comfortable and confident in what they are talking about? Do they sound like a used car salesman that is trying to scam you? You are getting ready to make what is most likely the largest purchase of your life, so choose a lender that you are comfortable with.