Critical questions to ask a lender
THE CRITICAL QUESTIONS YOU SHOULD BE ASKING EVERY LENDER THAT CAN SAVE YOU THOUSANDS OF DOLLARS.
- Does this loan have a Pre-Payment Penalty?
(Owe money for pre-paying or paying off your loan early)
- Does this loan have negative amortization?
(Deferred interest which makes you owe more than you borrowed originally)
- Is this a fixed rate and if so, how long do I have to pay it back? Is there a balloon payment?
- Is this an ARM and if yes, explain the terms to me
(a) How long is the fixed rate period?
(b) How often can it change after that period ends?
(c) What is the life-time cap?
- Are you the ONLY person who will be running my credit report?
(Very important they are not allowing multiple companies to pull it)
- When you pull my credit for pre-approval is it all three bureaus?
(It should be all 3 bureaus)
- At what point is my rate locked in and what do you have to do to lock it in?
- What is the rate? And am I paying any points or origination and if so, how many?
- Can you protect my rate while I shop for a home?
(Coldwell Banker Mortgage can protect it for 90 days free)
- What documentation will I need to do this loan?
- Am I paying PMI (Private Mortgage Insurance) and if so do you have any alternatives besides putting 20% of my own money down?
- What is my Principal and Interest amount, the PMI amount, and what are your estimates for taxes and insurance. Finally what is the total payment.
- Can you please furnish me a copy of the Good Faith Estimate immediately.
- Do you sell the servicing on my loan?
(Coldwell Banker Mortgage will service your loan.only one place to deal with)
- Can the Sellers make a contribution and if so, how much?
- What is the LTV (Loan-to-Value), the least I can put down?