SIX QUESTIONS YOU SHOULD ASK YOUR LENDER

Consumers are finally learning that there is more to choosing a mortgage than just a low interest rate. A good mortgage planner is more in the advice business than the lowest price business. Borrowers should consider asking these questions before selecting a lender:

1. What type of lender should I use?

There are three basic types of lenders. Mortgage BROKERS promote a broad product menu, competitive pricing, and entrepreneurial approach; however, BROKERS cannot lock, commit, or approve your loan because they are not actual lenders. Banks and Credit Unions rely on financial strength, direct lending capabilities, and stability; however, they sometimes have limited product offerings. Mortgage BANKERS blend the best of both: direct lending ability, financial strength and stability, wide product offerings and competitive pricing.

2. What loan products should I consider?

Make sure your lender offers multiple loan products (Conventional, FHA, VA, MSHDA, etc.). While most people today do choose a 30 year fixed, it is not always the wisest choice. Borrowers need to consider how long they will be staying in the home and any anticipated income changes before settling for the same loan as everyone else. Additionally, buyers acquiring properties in need of repairs may want to consider the FHA 203K Program.

3. Should I lock or float my interest rate?

A knowledgeable mortgage advisor should be able to give you more than historical information. Weighing numerous factors ranging from your projected closing date to upcoming economic reports, look for counsel regarding future interest rate projections. While no one can predict with absolute certainty, you need to reach a comfort level that the lender you choose has the best information and your best interest at heart.

4. What are mortgage rates based on?

There is only one correct answer. It is the pricing of Mortgage Backed Securities. (Unfortunately, too many people answer the 10-year Treasury Bill.) If you get the wrong answer on this basic question, what else don’t they know?

5. What upcoming economic data will impact rates?

How will a Jobs Report, a Fed Board Meeting or Inflation Number affect your home loan? Your mortgage planner should know, explain it to you, and keep you informed.

6. How can I improve my chances of getting approved and at the lowest possible cost?

Sometimes even minor improvements in a credit score, the amount of your down payment, or how you position your assets can make a big difference. During your counseling sessions, your mortgage planner should be advising you on how the little things can make a big difference.
Good advice, whether it’s from your doctor, lawyer, real estate agent or lender, can be invaluable. Finding a lender who is an expert….who has your goals in mind…and who offers creative solutions is one of the most important factors in a successful real estate transaction.