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What To Ask Your Lender When Getting A Loan.

When showing homes in Boulder Colorado to first time home buyers, I often get the following question, “Do you know a good lender?” Of course I do, and I usually recommended three that I have done business with over the years.  It’s best to interview at least three mortgage companies to find the best fit for you. But then what?   Because now is the time to buy in Boulder and the surrounding areas, homebuyers are abundant and many have never been to a lender before.  Recently at an open house, a couple of first-time homebuyers asked me what they were supposed to ask the lender at the interview.  It’s a great question and many first timers make the mistake of not asking the right questions, so I came up with some of the most popular questions  to ask a lender regarding a loan.

1.) Based on our situation, what looks to be the best program for us? Why?

2.) What is the projected time for processing and closing a loan?

3.) If Private Mortgage Insurance is required, when and how does it go away?

4.) Are your rates, terms, and/or fees negotiable?

5.) What standard underwriting guidelines do you follow? Are there any special underwriting guidelines?

6.) Who services your loans?

7.) What is your most popular loan program and why?

8.) What are your standard and special fees?

9.) Six months to a year from now, what will make this loan look good/bad to most borrowers?

10.) What if rates go down during the lock-in period?

11.) Who is our contact person for progress reports?

12.) What, if any, escrow requirements exist?

13.) What, if anything, do you need from us to get our loan approved?

14.) Do you have any concerns about our ability to get a quick loan approval?

15.) Interest rate, total number of points (including loan origination fee), annual % rate, length or repayment term of the loan.

16.) Is the loan assumable? If yes, explain.

17.) Is there a prepayment penalty? If yes, explain.

18.) What will my P& I (payment) be?

19.) What are the estimated closing costs?

20.) Will my monthly payments include escrow payments (taxes and insurance)?

OMGIHB

Tags: Tags: boulder, Boulder real estate, escrow, first time homebuyer, homebuyer, interest, loan origination, mortgage company, mortgage lender, principal

This entry was posted on Thursday, October 23rd, 2008 at 9:03 pm and is filed under Buyer's Corner, First Time Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Scenic City Scoop - Chattanooga Tennessee Real Estate Blog said at October 24th, 2008 at 1:15 pm

   Hello John, Great questions for first time homebuyers to ask one of your three lenders. Always a good idea to recommend more than one and more important, this should be the first step a first time homebuyer makes, even before looking at homes.

   David

2. Dawn Moll said at October 27th, 2008 at 6:57 am

   I saw you mentioned assumable loan. I just recently learned about assumable mortgages from my parents and in-laws. (They both bought homes in the 80’s using the assumable loan option) Wow, what a great opportunity for a first time buyer in today’s market. I also found a great website called homeassume.com that lists properties for sale with assumable mortgages. Good luck to your readers in this crazy market!

3. Kirby Brooks, Broker/Owner at San Juan Realty, Inc. said at October 27th, 2008 at 9:10 am

   This is a great list of resources for not just first-time homebuyers but buyers in general. We often hear the same question from our clients out here in Ridgway, CO. Given the current mortgage market climate, many buyers think financing has dried-up, but the reality is that you just have to be better prepared when going into the home buying process. A strong mortgage prep is the best prep, we think, a buyer can put into their home search. Provides them with a definite advantage when beginning the negotiation process with the seller!

   Kirby

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