When you are buying...

Questions buyers should ask a mortgage lender

Most buyers---especially first-timers---know only one question to ask when shopping for a mortgage: What is your interest rate?

But there is a lot more to the mortgage process than getting a good rate. High costs in fees and poor service sometimes come as very unhappy surprises.

List of suggested questions you might ask a lender:

• How large is your company, and how long has it been in business?
• How long have you been working in the mortgage business?
• Are you licensed mortgage broker or loan officer in Texas?
• What is the process for funding and when will the loan fund (after or at closing)?
• What is the difference between a mortgage banker and a mortgage broker? Is your company a mortgage banker or a mortgage broker?
• What is the name and phone number of the person who will actually be processing my loan application? How accessible is that person?
• Tell me about all loan fees. What fees must I pay up front? What fees will I have to pay at closing?
• When will I get a Good Faith Estimate of the costs of the loan?
• Do the costs you are quoting include the lender origination fee?
• Are there loans available with no origination fees? No closing costs? Reduced closing costs?
• What are your interest rates?
• Tell me about any programs that require me to lock in my interest rate. Is there a fee? How long can I lock in the rate? If interest rates go down, can I relock at the lower rate? If so, will there be a fee for that?
• What information must I provide to get a mortgage loan?
• What documentation will I have to provide?
• Will you require current tax returns? (Take note of this especially between Jan. 1 and April 15 if you haven't prepared your return yet.)
• How long will it take to get complete and unequivocal loan approval and be ready to close?
• I plan to stay in this house for ____ years. Can you show me the breakdown of any ARM loans you offer vs. fixed-rate loans to see which could save me the most money in my situation?
• What is private mortgage insurance? Other than a 20% down payment, how can I avoid the private mortgage insurance?
• In the last three months, how many loan applications have you taken and how many have you been unable to close?
• Can you give me names and phone numbers of two or three people for whom you've funded loans in the last two months?

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