What to Ask a Mortgage Broker or Lender
When shopping for a mortgage, don’t look at just the mortgage interest rates, but all the terms of the mortgage program. So it is vital that you interview lenders or mortgage brokers before committing to any of them. Following are some of the top tough questions you should ask them. If their replies are not acceptable to you, walk away and continue shopping.
1. Which is the best type of loan for me?
Reputable mortgage brokers/lenders will gather from you as much information as they can before suggesting the type of loan that you can apply for. You can request them to explain about each type, including the pros and cons.
2. What is the APR (Annual Percentage Rate)?
The APR is the result of dividing the interest rate and all the lender fees by the term of the loan. Bear in mind that APR rates for adjustable loan can’t be computed accurately.
3. What Are Discount Points and Origination Fees?
One per cent of the loan amount is equal to a “point”, so 2 points on a $200,000 loan is $4,000. Points are tax deductible and can lower the interest rate of your loan.
4. What does “All the Costs” mean?
The term “all the costs” include not only the lender fees but also the fees for appraisal, lenders title policy, escrow (if applicable), taxes, credit report, pest inspection report, recording fees and other fees by 3rd party vendors. An estimate of these fees is called Good Faith Estimate (GFE).
5. Will you guarantee the GFE?
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