Are you in the process of working with a loan officer? Here are a few questions you can ask to learn more about their process, what they recommend and how your mortgage looks.
Loan Officer Question #1: What Type of Loan is Best for Me?
There isn’t just one type of mortgage.
- You have different term options: 30 years and 15 years are the most common, but you can also do other lengths such as 20 years
- If you’re a veteran, you may qualify for a VA loan
- Depending on your credit and down payment, a conventional loan may be best
- An FHA loan might be the one to pursue depending on your circumstances
There are a variety of loans for a variety of different situations. While you can do your own research and come to your own conclusion, it’s good to get advice from an expert.
How Much am I Pre-Qualified or Pre-Approved for?
When a lender pre-qualifies you, they’re making a few estimates based on the information you provide them. They’re trying to get an idea of what kind of mortgage to offer you and how the numbers would look.
Keep in mind that this is different from a pre-approval. In a pre-approval, the lender pulls your credit score and will start asking you for information such as your W-2 and bank statements.
This is done for two main reasons:
- Expedite the process (by doing this upfront, it saves time later after you’ve put in an offer on a home)
- Give a seller more confidence that you can actually buy the home
Both your pre-qualification and pre-approval can be helpful to know depending on your stage of the home buying process.
What is My Interest Rate?
Your interest rate will depend on several things:
- Your credit score
- Your down payment
- Your debt-to-income ratio
- The type of loan you get
In general, your interest rate is dependent on the lender’s confidence in your ability to repay the loan on time. If you seem like a low risk, you’ll get a lower rate.
The good news is interest rates are extremely low right now!
What is My Monthly Payment?
Sometimes a new homebuyer is surprised when they see how much they’ll have to pay each month. Maybe they had used an online calculator to estimate their mortgage but hadn’t accounted for other costs. These things add up:
- Property taxes
- HOA fees
- Home insurance
The sooner your lender gives you this information, the better. It will help you understand how much you can realistically afford and should budget for your home.
What is Your Loan Processing Time?
You want a lender who can close within 30 days or less. Most home sellers are eager to get out of their house, so they want a buyer who can close within a month of the offer.
That’s why it’s important to get pre-approved. The faster you get some information to your lender, the faster they can process your loan once the seller has accepted your offer.
Make sure to ask your loan officer a lot of questions. Their job is to make sure you get the best loan for you! To prove that we go above and beyond to help our customers get a great deal on their mortgage, send us an email at firstname.lastname@example.org. We’ll talk to you soon!