Questions for Your Potential Mortgage Broker or Lender part one

Being a first time home buyer, you are going to have a bunch of questions about the whole process.  You may have so many questions that you might not even know where to begin.  Here are some tips for questions to ask your potential lender (lenders are also known as mortgage brokers).

One of the first questions you will want to ask your potential mortgage broker is, what type of home loan do they think is best?  The first red flag that you should see is if they just start throwing options at you without ever finding out about you!  Any good lender will make sure they do their due diligence with you before they ever suggest a home loan type.  There are some choices out there like adjustable loans, fixed loans, and interest only loans to name a few.  Make sure that when they suggest some home loan types that they go over all of the positives and negatives about each type.

This is one of the more obvious questions but, make sure to ask what the APR (annual percentage rate) is and also what the interest rate is because they are different.  Make sure that your potential lender goes over all of these details with you because they can influence some of the terms of the loan and how much you will really pay for the home over time.  Just keep in mind that APR is a very complicated formula and that a lot of mortgage brokers sometimes are off on their calculations.

There are many costs that go into a loan and sometimes it can look like a grocery receipt with all of the different costs on it.  This is somewhat normal but, make sure that you get an account to where all of your money is going down to your last red cent.  Some of the costs included in the home loans are fees for credit reports, appraisals, different types of inspections, and taxes.  An estimate of these fees is usually referred to as a Good Faith Estimate, these are required by law.  Like stated before, there are many costs you just need to make sure you know where your money is going.

Good Faith Estimates are not guarantees but, Lenders have three days to give you a GFE after you have applied for your home loan.  Just remember that these are estimates and not written in stone.  So the question you need to ask the mortgage broker is, do they stand behind their GFE?  If the answer is no, go look for a new lender.

These are just a sampling of questions to be asked and we will be following these up shortly with a part two of questions to ask your potential Lender / Mortgage Broker.