The very first step of the home buying process is to get a pre-approval letter from a lender stating how much you are qualified for. It’s important to ask your potential lenders some questions to make sure they are a good fit for you.
Don’t understand something your lender says? Stop and ask for clarification. This is your home buying journey, and you deserve to understand the process every step of the way. With a mortgage pre-approval, you are able to secure a rate for total of 120 days – plus you do not need to commit to a specific lender.
Getting a mortgage pre-approval ahead of time saves you time when it comes to searching your home and it puts you in a better position to negotiate.
1. What type of loan do you recommend for me? Why? There’s no one type of mortgage loan that’s superior to another—but whichever you choose, you need to know why it’s best and how it works.
2. Will my down payment vary based on the loan I choose? If you’re tight on cash or don’t want to be cash poor, let your lender know. Loans vary in their down payment requirements.
3. Can I lock-in an interest rate? If so, for how long? If you think rates will be moving up, ask if you can lock it in for a set period of time.
4. What will my closing costs be? Are they a part of my loan, or will I pay them in cash at closing? Remember, closing costs usually run 3-6% of your loan value so you need to know how they’ll be covered.
