Shopping for a Lender? Here's What to Ask!
Updated: Aug 25, 2020
When you're considering a big move and the purchase of a home, finding the right lender is an important part of the process.
Here at Better With Bethany, my team and I want to ensure that you're well-prepared and comfortable for every step of that process, so I'm arming you with my top tips that you can ask your lender when shopping around!
Bethany's 6 Top Tips to Ask Your Lender
What loan type is right for me?
How much do I need for a downpayment?
What are your lender fees?
What will my interest rates be?
Do I need mortgage insurance?
What will total closing costs be?
Can you run a case example for me?
These six top tips will help you feel confident and comfortable, knowing that you've picked the best lender for you and your family. Are you ready to dive in? Let's do it!
Communication With Your Lender
Communication is one of the most important things to ensure you'll have with your lender. A few things to look out for from the get-go are:
Is your lender timely in their responses to you?
Do they take time to explain and educate?
How do they respond when you ask questions?
The lending portion of your entire home-buying process will be a huge part of purchasing a home. Even working with the very best lenders out there, there may be times when you're missing one particular piece of information or you're waiting on approvals and it feels a little stressful.
Ensuring that the lines of communication are as strong as possible between you and your lender will ease any stress or tensions that come along as a natural part of every lending process.
If you've done your own research and feel like you're still coming up empty-handed, or you're just starting out and would rather have a recommendation before "shooting in the dark," I'm happy to recommend some of my favorite lenders in the Metro Detroit area to you as well.
What Loan Type is Right For You?
Loan types can feel tricky, especially if you're buying a home for the first time. Lucky enough, I have a whole blog dedicated to the subject. I wrote this to ensure I can provide you with as much information as needed, in a way that's easy to digest (I tried not to be too long-winded, I mean).
Check it out here: What the Heck Are Mortgage Loan Types?
Once you've given that blog a look over, you'll be able to pick out one or two loan types that seem like they'll be a perfect fit for you and ask your lender for more information and guidance with confidence.
How Much Will I Need for a Downpayment?
The amount you'll need for a downpayment will be determined by a few different factors like the price of the home you're looking at and your mortgage loan type. It'll be important for you to ask your lender what your downpayment will be for you, specifically.
Pro Tip: If you're feeling nervous approaching this question, because you aren't sure if you can afford a large downpayment, just remember that there are loan types for everyone out there. By choosing a lender with great communication they'll help you feel comfortable and empowered to make the right decision for you.
What Are Your Lender Fees?
Just like real estate agents have a commission they're paid as part of helping you through the buying and selling process, lenders have their own lending fees. Be upfront right away and ask your lender what their fees are. It can be an important part of deciding which lender you want to choose!
What Will My Interest Rates Be?
This is, again, a personalized answer that'll depend on your mortgage type and also the market! Ask your lender what interest rates will be for you according to your mortgage type and ask about what interest rates are doing in the market - at the time you're purchasing your home. The answer to this question could inform whether or not it's the right time to purchase for you!
Do I Need Mortgage Insurance?
I touched on this briefly in the What the Heck Are Mortgage Loan Types blog, as some loans require mortgage insurance and others don't. Find out from your lender whether or not they'll require you to have mortgage insurance.
What Will Total Closing Costs Be?
You never want to go into a closing blind or feeling like you don't know exactly what to expect as far as closing costs. Also ask about any pre-paid taxes and insurance, as well as title insurance during this chat.
Can You Run a Case Example For Me?
Running a case sample is a great way for you to get an idea of the costs associated with your commitment to purchase a home.
Show your lender an example of a house you're interested in so that you can see what a monthly payment would be, including taxes and insurance. Ask what the amount you'd need to bring to close would be, based on the case sample of your chosen example home.
This way you'll have a tangible example of all of the insurance, taxes and total closing costs!
If you have any other questions - or just want to chat - you can always call B!