Securing the right mortgage is one of the most important steps in buying a home. Choosing the right lender can make all the difference in ensuring a smooth transaction and the best financial outcome. Before you commit to a lender, here are five crucial questions you should ask to ensure you’re making an informed decision.
1. Am I working with a broker, bank, or mortgage banker?
Knowing who you’re dealing with is essential. Brokers may offer access to multiple lenders, giving you more options, while banks and mortgage bankers often have their own specific loan products. Understanding this helps you navigate the loan options available and find the best fit for your needs.
2. Can you lock in the interest rate up front at time of application?
Interest rates can fluctuate, sometimes daily. By locking in your rate early, you protect yourself from rate increases during the loan process. This is especially important in a volatile market, where rates can change quickly.
3. Is there a pre-approval program for buyers?
Some lenders offer specific pre-approval programs that streamline the process, giving you a verified approval even before you find a home. This can set you apart in a competitive market and give you greater confidence in your budget.
4. Is there a “closing on time” guarantee?
Delays in closing can be costly and frustrating, potentially causing you to lose the home. A lender who guarantees on-time closing is committing to a smooth and timely process, which can provide peace of mind during what can be a stressful time.
5. Do the lender’s jumbo programs offer the same qualifying flexibility that conforming loans do?
Jumbo loans are for home purchases that exceed conforming loan limits, and they often have stricter requirements. Asking about qualifying flexibility ensures you’re aware of any added criteria and can better prepare for the approval process if you’re in the market for a higher-priced home.
