What to Ask When Mortgage Shopping

 A home is often the largest purchase a person will make. It is important to be as informed as possible when making that purchase. Here are some important questions to ask when shopping for a mortgage:

 
What type of mortgage is it?
When it comes to mortgages there are many options to choose from, from a conventional fixed 30 year with 20% down to a FHA with 3.5% down and financed costs. As your mortgage professional I will be able to look at your financial situation and determine which options are best for you.

 
What are the terms of the loan?
After we determine the best type of loan for you we can then determine the appropriate length of time for that loan based on your financial situation. Fixed rate loans are generally 10, 15, 20 or 30 years. ARMs (adjustable rate mortgage) are amortized based on a 30 year term but adjust at different periods depending on the program and type chosen.

 
How much do I need for a down payment?
If you are purchasing a home you may need to make a down payment. The amount you are required to put down will be determined by the loan program you choose to go with.

 
What is the interest rate and can it change?
If you opt for a fixed rate loan the interest rate will stay the same for the duration of the loan. If you choose an ARM (adjustable rate mortgage) the rate will be fixed for a period of time and then will change at a future date based on the terms of the ARM.

 
What is the total estimated monthly payment?
Your monthly payment will include the monthly principal and interest paid to the lender, mortgage insurance (if it is required), and monthly taxes and insurance paid into an escrow account (if applicable).

 
What are the estimated fees and closing costs?
The fees associated with the loan will be listed on the Good Faith Estimate I provide after you have completed a loan application and we have discussed your options. The fees are associated with originating, processing and closing the loan. There are often pre-payment fees for taxes, insurance and interest as well. I will be happy to answer any questions you have regarding the fees listed on the Good Faith Estimate.

 
Are there any assistance programs available?
Depending on your financial situation, the properties you are viewing and other factors, there may be assistance programs available to you. Please ask me about these!

Choosing a Mortgage Banker

 Financing a home can be a daunting task. There is a lot of information to sort through and often times it can be confusing to compare mortgage options. A good mortgage banker can help ease frustrations and make the transaction smooth and painless. Consider these factors when conducting your search:

 How is experience and reputation important?
Often the best source for referrals can be your friends and family. I have worked hard to create a positive reputation in the mortgage business so my clients will feel comfortable referring their friends, family and acquaintances to me. It is also important to consider the experience of the banker and the company he or she works for. A company with a long history in the mortgage business most likely has that history because they have made a commitment to providing quality service and employ bankers with experience and integrity.

What level of service should I expect from a mortgage banker?
Whoever you choose to work with you need to feel comfortable and trust that he or she has your best interests in mind. After you have contacted someone, asses your first impressions; was your call or e-mail returned in a timely manner? Did the person answer your questions to your satisfaction and in a manner that was courteous and respectful? Did he or she use a lot of industry jargon that was difficult to understand? Did you feel pressured to get started on the process before you were ready? Your initial impressions can be helpful in assessing the type and quality of service you will receive.

How does a mortgage banker choose mortgage products?
There are many options when it comes to financing a home. The banker’s roll is to look at your financial situation and assess what options will best fit your needs. Ask the mortgage banker what factors he or she considers when looking at products and how the selection process is determined. Once you have a quote you can compare that to other quotes. A knowledgeable mortgage banker will be helpful in the comparison process so you can make the best decision for your situation.