Choosing a Mortgage Lender
The Top 10 Questions to Ask When Choosing a Lender for a Home Mortgage
Pacific Beach Real Estate, Mission Beach Real Estate, San Diego County Real Estate
- What is the annual APR (Annual Percentage Rate) for the home loan you're offering me?
An APR is the cost of credit calculated on a yearly rate. This includes any points and fees in addition to the interest rate.
- What points and fees are involved?
Points are one-time charges equal to up to 1% of your loan amount. Lenders often require you to pay points and other fees at closing that were "hidden"-sometimes these charges range 2 to 6% of the total loan amount. Make sure your lender is up front about all charges for your home mortgage before you get to closing. Ask for a "Good Faith Estimate."
- Can you show me at least five different programs that might be right for me?
Lenders have a variety of programs that might fit your individual needs, usually up to 10. Don´t accept the first one shown. Know all your options.
- Am I better off with a Fixed or Adjustable Rate Mortgage (ARM)?
If your company moves you across country every couple of years or you´re not planning to be in the home you´re buying for over three to four years, an ARM might be a better choice. Ask your lender to help you determine which option to choose.
- How fast do you anticipate having my home loan approved?
With today´s technology, most lenders can at least pre-approve you for a home loan in a very short amount of time. Sometimes within a day, so you know how much home you can afford. Don´t go shopping for a home until you have been pre-approved.
- If I've been approved, found my dream home and signed a contract, how long before my loan might fund?
Most prospective sellers don´t want to wait weeks for your loan to fund. Make sure you know what the turnaround time is.
- How long will you commit to the interest rate you've quoted me for my home loan?
Some lenders will make promises of low, low rates, but will try to change the rate they´ve quoted prior to closing. They´ll argue that your "lock-in" rate has expired. Make sure the lender gives you ample time to close on your new home.
- If I have derogatory credit on my credit report, can I still get a home loan?
Most lenders have access to home loan programs that allow you to be approved for a home loan even if your credit is less than perfect. But sometimes certain lenders don´t want to help credit challenged buyers. If your credit is less than perfect, look for a lender who´s willing to work with you.
- Can I still qualify for a home mortgage if I have declared bankruptcy in the past two years?
There are programs available where you can get a home loan if your bankruptcy was discharged at least 12 months prior to the closing of your home. Ask your lender if he knows about these special programs.
- Is that your final answer?
If turned down on your home loan application, realize this may not be the final decision. Go in person to the lending institution, ask to see a higher authority and explain why you deserve a home loan because of your special circumstances.
In today´s marketplace there are virtually hundreds of lenders in every community offering just as many loan programs. Unfortunately for the buyer, the challenge is to select the one who can be creative in tailoring a specific loan program to fit individual needs and circumstances. You also need someone who will provide you with superior service and most importantly, someone who you can count on to deliver on their promises and commitments. In essence, you need to work with a lender who you personally know or who comes highly recommended. If you need a recommendation, I work with several whom I have tremendous confidence in. Please call me today and I look forward to helping you become a very satisfied homeowner.