First time dealing with a mortgage lender and don’t know where to start when looking for one? Begin with these simple yet very important questions and find out all the details you need.
What are my loan options?
A reputable lender should thoroughly review your financial situation before recommending specific loan options. Once you’ve provided the appropriate information regarding employment, income, assets, credit, and other details your lender might need to know, they should then be able to educate you on what mortgage programs might best suit your needs.
How long will it take to approve my loan application?
This varies for each lender and also depends on how complex your financial situation is. Your lender may also request additional documentation before making an underwriting decision.
What documents must I provide?
This depends on your credit, employment, and financial situation. Mortgage guidelines have changed in recent years, so be prepared to gather a lot of documents. The most common information that any lender will ask from you are pay stubs, bank statements, W-2s, and tax returns.
When should I lock my interest rate?
It’s never too early to discuss locking your rate with your lender. Make sure you know what your options are upfront. Some lenders offer long-term rate protection, which is great if you’re building a new home. By locking your rate you’ll gain peace of mind about your mortgage payment and protect yourself from fluctuations in the market.
How much will I pay in closing costs?
Closing costs can vary from lender to lender, so make sure you compare all the costs carefully. The Good Faith Estimate (which is provided within 3 days of your mortgage application) will show approximate costs, but not the exact amount you need to bring to closing. The day before closing you’ll receive a HUD-1 Settlement Statement which discloses the actual dollar amounts that will be required. You may also have to set up an escrow account for payment of your taxes and insurance.
Take your time when shopping for a lender. Don’t hesitate to ask questions and weigh your options. See how each lender compares to one another by reviewing their Good Faith Estimates. Besides finding a lender with competitive rates and fees, it’s just as important to find a lender you can trust with one of the biggest investment decisions of your lifetime.
If you have any questions regarding mortgage financing, please visit the TBI Mortgage website.
TBI Mortgage, a subsidiary of Toll Brothers, contributed to this story.