Explore Financing

Knowing what to ask your lender when you’re ready to apply for a mortgage will save you lots of money, stress and heartache. Get answers for each of these questions before signing your mortgage application.

1. What is the interest rate?

This is the most important figure to obtain. To know exactly what you’ll be paying in interest over the life of the loan, you need to know the interest rate.

2. What closing costs will be charged on this loan, and will you pay them up front?

There are various fees associated with mortgages that lenders and other parties involved in the transaction provide. Make it a top priority to find out what you will be charged. Only use a lender or broker if they will provide an estimate up front.

3. When can I lock in my interest rate? What will it cost me?

Between the time you apply and the time you close, the interest rate of your mortgage can increase or decrease. You may want to lock in this rate for a specified period of time, rather than have a floating rate until closing. Ask your lender if there is an additional fee to lock in the rate.

4. Is there a prepayment penalty on this loan?

If you have less than perfect credit, this question is very important. Identify the duration of any penalty period and how the fee would be calculated.

5. What is the minimum down payment required for this loan?

You might be charged different interest rates or quoted different terms depending on the amount of your down payment.

6. What are the qualifying guidelines for this particular loan?

These guidelines relate to your income, employment, assets, liabilities and credit history. Sometimes first-time buyer programs have easier qualifying guidelines.

7. What documents do I have to provide?

It is standard to provide proof of income and assets to get a mortgage loan. However, ask your lender what documents are required.

8. How long will it take to process my application?

This process varies from lender to lender. It usually depends on the volume of business the lender is handling. If the market is hot, underwriting departments develop bottlenecks. Ask for a realistic estimate, and use it to figure out how long of a locked interest rate you need.

9. What might delay the approval of my loan? 

When complete, accurate information is provided to your lender, everything should go smoothly. However, if credit problems arise there could be delay, which is why it is crucial to get your credit in order.