What questions should I ask a potential lender?
If you are a first-time home buyer shopping for a loan, here are ten pertinent questions you should ask every loan officer:
- What types of financing do you handle? VA? FHA? Conventional? Adjustable Rate?
- What is the total cost of origination and/or application fees?
- How much are lender's processing fees? (Document review, underwriting fee, document preparation, tax service, etc.)
- How many points will be charged?
- What are the loan's interest rate and annual percentage rate (APR)? APR is a combination of interest rate, points, and other charges divided by the loan's term to give an annualized rate.
- How long will it take to process the loan?
- Is there a prepayment penalty? You want to be able to pay off the loan upon sale or refinancing of the property without penalty.
- Can I lock in my interest rate? What lock-in fees are charged?
- What is the lender's track record?
- Will the loan be sold? Who will handle servicing? Some people prefer to deal with lenders who are in town and can handle servicing questions and problems.
We have working relationships with many local lenders and, based on our experiences, we can answer many of your questions. Call or e-mail us for invaluable assistance in selecting a potential lender.