Here’s some general advice when shopping for a mortgage loan:

  • Speak with at least three different mortgage brokers and/or lenders, so you can be confident you’re getting a competitive rate and terms.
  • Don’t disclose the lowest rate(s) you’ve found so far. Simply ask “what are the best rate(s) you can offer me?”
  • Use Good Faith Estimates (GFE) to compare the loans that are offered. Explicitly ask for them. Without a GFE, you really don’t know what your full costs will be.

Here are some questions you can ask lenders you’re considering. It could be useful to pose these questions in writing, by email, ahead of a conversation:

  1. Are there any fees I will be charged for your loan services? If yes, what will they be for, how much will they be, and when will I pay them?
  2. How long of an interest rate lock-in will be provided to me at no additional cost? What is needed from me to lock-in the rate?
  3. Do you offer a float-down should rates drop? If yes, what are the details?
  4. What is my middle credit score?
  5. Do you offer any rapid re-score services if an attainable higher credit score may benefit me?
  6. Will the interest rate on this loan ever adjust? If so, what are the terms? Is there any type of balloon payment with this loan?
  7. Is there any prepayment penalty for this loan if I pay it off early or refinance it?
  8. Are there any other loans or specialty programs that I qualify for besides the loan you are currently recommending to me?

And, if you’re seeking a mortgage to finance the purchase of a home (rather than refinancing an existing mortgage), here are additional questions you might consider:

  1. What is the maximum amount of seller contribution (expressed as a percentage of the home sale price) that I would be allowed to use toward my settlement costs?
  2. If I want the seller to cover my closing costs but the seller will not, how much lender credit can you offer to help cover my closing costs?

Let me know if you have suggestions for other advice or questions to add (thank you).  I hope all goes well for you when you’re securing your next mortgage loan!