From the moment you decide to buy a home there are so many things to think about it that it can easily prove to be a frightening experience. You want to know that you will find a home that you can be comfortable in and spend building memories in, but you also want to make sure that you’re making a financially sound decision.

Part of this decision includes who you choose to be your mortgage lender or broker. Many people will warn you of the dangers of real estate agents and how salesman oriented they can be, but you rarely hear the same of lenders.

As a real estate agent I can say that I work with many people and do not hold their beliefs. A salesman I may be but I am also a family man and I like to believe that I help to build the dreams of the families that I help. I want to see them succeed because nothing is more heartwarming then seeing the excitement in a child’s eyes as they run into their new home and begin the process of picking out their new bedroom.

Financially a real estate agent can only guide you by recommending certain situations if you ask us about them. We do not run the loans through or handle the mortgage. We handle finding you the home and the mortgage company supplies the money to make the dream come true.

Unfortunately they are salesmen with slightly more amounts of power then real estate agents. Every lender is not the same and using the wrong one can cost you a great deal of money.

With that in mind I wanted to do my best to help you as much as I could. I obviously cannot pick your lender for you but this was something that I could do.

I have compiled a list of things that you should ask your lender before you sign any agreements with them. You see it’s simple. You are like the boss and you are hiring a lender. You should be able to ask them as many questions as you need to before you make the decision to complete a loan application with them. By doing this you are allowing yourself the mental comforts of knowing that you made the right choice. This means that you will not have to worry about your family’s future or your hard earned money being placed in the wrong hands.

If the lender cannot or will not answer your questions or they don’t answer them in a way that you like it is best for you to just move on! There are plenty of lenders out there and there are too many mistakes that could happen if you go with one that you feel you cannot trust.

Are you a full time lender or broker?

This is a very common question to ask. If a person does not do this full time you may wish to ask why? They could have a good reason why they are not in the business full time or it may mean that they are not secure enough in their job. The important thing is that you find out for yourself.

How long have you been doing loans?

You should be able to get an honest and easy answer to this question. Whether they do them full or part time you will want to know how long they have been doing them. This is not to say that someone new is not knowledgeable but if you are worried about your experience buying a home as it is, a seasoned professional may make all the difference in the world to you. The option is up to you and the point is you should be able to make the choice for yourself.

How many loans do you complete in a year?

This is a perfectly understandable question. If a person tells you they do 4 loans a year, you will most likely wonder why they are getting such a low number of loans. The person you choose should depend on your comfort level and their experience level. No set number of loans is a correct number, but if this is their full time job it should be at least a double digit number. If it is low you can always ask why the number is small, perhaps they will have an explanation of why it is a low number.

Based on our situation what is the correct situation for us and why?

You are going to want someone with a plan. If they cannot answer this question and are claiming to have much experience I would be weary of them. You want to know that they are telling the truth and that they can offer you what you need. If they do loans and do not have some form of idea how they can help you, this signals a red flag.

What is the most popular loan you offer and why?

No matter what they say to this you deserve to know your options. If you ask this to three qualified people, you may just want to go to the best offer. This is like shopping. You want to get the best deal available. Competitive lenders will offer the best deal available to get the sale and to help you get your home. If they are not willing to offer you a decent deal, be certain that there is another lender out there that will.

How long will it take you to process and close the loan?

Every situation is different but this does not have to be a lengthy situation. If you have given the lender all information they need this will speed the process along and it should not take long at all. If the time frame they give you seems high, do not be afraid to ask how they came up with that number.

Are your rates, terms, and fees negotiable?

Obviously this seems like a yes or no question but if it is one they answer no to you may want to consider someone else. As stated above for every lender that will not negotiate there is a handful more that will.

What are your standard fees and are there any special fees?

No matter who will be handling your loan it is understandable that there will be certain fees involved in that loan. As a consumer it is your right to know exactly how many fees will be included and what every fee accounts for.

What are the up front charges for private mortgage insurance and what is the renewal fee?

If you are interested in private mortgage insurance it is best that you check with each specific lender about it. Every one is likely to charge a fee based on certain things and you will want to know where they come up with their numbers and how much these things are going to cost you.

Should we include these fees up front or pay them in our mortgage? Why?

This will depend on your situation in some cases but whether it does or not you should find out what your lender thinks. Make sure they tell you why something is a certain way too. Don’t just accept you should pay them now, with no explanation as to why.

Could you please describe the basic scenario from our mortgage application to our home closing?

The scenario for the average buyer does not change all that much. This is why this is a good question to ask. It should be one they do not have a huge amount of trouble answering. It should be a basic to the point answer that leaves you with a better understanding of the process that lender will put you through.

At what point does the mortgage servicing department pay the necessary property taxes to insure the income tax deduction for that year?

The lender should also have a basic speedy answer to this question. Most companies have a certain amount of time they do this in so it should be an easily answered question.

How many months of property taxes and insurance are required for a reserve account?

Once again this should be a more or less standard answer that is due to the place of work for the lender. This means that it should be answered easily. If for some reason it is not answered swiftly or the lender isn’t sure what you are referring to, this could be a major red flag.
You should be able to ask your potential lender anything you need to in order to be more comfortable. Most established real estate agents have lenders they work with often, so if you are using an agent and have not found the proper lender, you should feel free to inquire with your agent. They may have the perfect lender for you!

As with all articles you find here, I hope they have enlightened you and bring you closer to the home you desire. If you need any help on the path of your dreams, please feel free to contact me at any time.