It’s much more fun to search for 🏡's online and attend open houses than it is to research home financing 💵. If you’re like many homebuyers, you’re not really sure where to start when it comes to your home loan 🤔. That's why we came up with 5️⃣ essential questions every buyer should ask their loan officer!
1️⃣ What is your process for pre-approval and closing?
Make sure the lender’s timelines line up with your home buying goals. Understand when they will pull your credit score. Don’t open or close any accounts during that time, or take out credit for any other large purchases. Ideally, you should check your own credit score first to review for any errors or issues you’ll need to address that may negatively impact your credit score.
What information will your lender need to preapprove you for a home loan? Ask how long the preapproval will be valid. Typically, it’s for 60 – 90 days and can be updated as needed.
Ask about the lender’s closing process. Where will it take place? Do they work with a particular law office or do they do it in house? Some lenders may offer a closing at your home or even online.
2️⃣ How do you communicate with homebuyers?
You never want to be the last to know. Ask how they will manage your loan process and all the steps along the way. Will you have an account representative who will inform you of updates? Do they offer an online system with notifications? Think about how you like to communicate and what works for your schedule.
3️⃣ What will be my down payment requirement?
Your minimum down payment will depend on the type of loan your lender recommends for you. Talk to your lender about what you have saved, how much you’d like to put down and your goals for a monthly payment.
4️⃣ Do you participate in any down payment assistance programs?
There are nearly 2,500 homeownership programs available across the country that can help you save on your down payment and closing costs. State and local housing agencies administer a wide range of programs, including down payment grants, affordable first loans and tax credits.
Most homebuyer programs have multiple participating lenders. Find out what special low down payment programs and accompanying down payment assistance programs they may offer. Some lenders offer they own proprietary down payment help as well.
5️⃣ What fees will be included in my loan and what fees will be due at closing?
Lender fees will be associated no matter what loan product choose. They include origination fees, the cost of writing the loan and closing costs. Fees are just as important as your interest rate, and there are ways to lower your interest rate with additional fees.
The cost of your loan is determined by several factors, including your loan terms (15 years, 30 years, etc.), your credit score and your loan type. Ask your lender to outline fees based on your personal situation and by different loan options.