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5 Questions to Ask Your Mortgage Lender
5 Questions to Ask Your Mortgage Lender
Purchasing a home is a large investment of time, energy and resources. Consumers who decide to buy property should take time to consider all the options and challenges involved in the process. Learn some of the best questions to ask a potential mortgage lender and what to avoid when starting out the search.
Avoid Buyer's Remorse
Twenty-one percent of home buyers reported buyer's remorse over the lender. People who became dissatisfied cited lack of communication, unmet expectations and pressures to select specific products as reasons for not liking a chosen lender. People who are happy with mortgage professionals cited quick, friendly responses that were combined with fair pricing. Trust is key when building rapport with a lender and is something to watch for in the selection process.
Finding a Lender
A lender or broker who works with an individual, couples or families will ultimately be the best one to choose for a property purchase. Whether meeting face-to-face or working online and over the phone, a lender should meet some general requirements. Get started with the following five open-ended questions.
Is the timing right? Lenders should look at all facets of an individual's portfolio, including debt-to-income ratio, how much a person plans to put down and other factors. A lender should explain a situation in a way that is easily understood.
Should I repay personal debts prior to closing? Good lenders will suggest looking at a person's credit history to see how to improve the credit score. According to credit reporting agency Experian, a credit score of 700 or above is generally considered good. Anything over 800 is excellent which can help bring down interest rates and increase the likelihood of a good deal. Free reports can be ordered online or supplied by the lender.
What should I know about pay points? An interest rate may be paired with mortgage discount points. One discount point typically amounts to 1 percent of the loan amount. One point on a $250,000 mortgage might equal $2,500. The longer a person plans to live in a home, the more sense it makes to pay points.
What will closing costs be in the end? Any lender will make sure consumers understand all the costs up front that will be involved. Scammers can wipe away buyer's closing funds during electronic transfers so it is best to understand how money is transferred, and how much, once the deal closes.
Who services the loan? A servicer is the company that collects mortgage payments and deals with late or missed payments. Some lenders service their own mortgages or outsource servicing. Others may sell the mortgage. While a consumer typically has no say on who services the loan, the question is a good one to give lenders. It will provide an opportunity to understand the scope of business and commitment to consumers.
Buying a home is an exciting time for potential owners but finding the right one can take some time. Choice Properties is committed to helping potential buyers find the right opportunity at the right price. Call us to find out how to get started on your home search needs.