Interviewing Mortgage Lenders
INTERVIEWING MORTGAGE LENDERS/BROKERS
A lender is a financial institution that makes loans directly to you. A broker does not lend money. A broker finds a lender. A broker may work with many lenders. Ask the salesman if they are a lender or broker.
Whether you use a broker or a lender, you should always shop around for the best loan terms and the lowest interest rates and fees.
About the Lender
- Are you licensed by the state?
- Whom do you represent (e.g., a bank, broker, finance company)?
- What are your loan programs? Do you offer any specific programs for public servants (i.e. police officers)?
- What is the par rate (the actual rate for a particular loan) for a 30-year fixed loan? (He should have the answer at the tip of his tongue.)
- Can you estimate and explain your fees?
- Are you going to hold this loan or sell it?
Additional Questions for Lenders/Brokers:
- Is there someone I can talk to whenever I need to?
- How are you keeping my personal information secure?
- Do you sell my information?
Additional Questions for Mortgage Brokers:
- How do you get paid?
- How much will you make on this loan?
- Who are some of your top lenders (lenders who purchase the loan applications from the broker)?
About the Loan
- What is the interest rate you are offering, and how did you arrive at it?
- How do I know this is the best rate?
- How will the rate change over the life of the loan?
- If an adjustable-rate mortgage (ARM), what is the worst-case scenario I could face when the rate resets?
- Are you locking in my rate? For how long? What does the lock cost me?
- Could you estimate closing costs for my loan?
- Can you explain an APR, and what is it for this loan?
- What am I paying in points?
- What are my monthly payments?
- Do I need to pay private mortgage insurance (PMI?)
- Are there any prepayment penalties on this loan?
- What's the usual timeframe for closing these loans?
Need a Referral?
If you need a list of Mortgage Brokers and Lenders, give us a call 251-974-1288; we'll be happy to help!