Some people jump into a house hunt by getting a real estate agent and attending open houses. But you should speak with someone about obtaining a mortgage before you get to the fun part. That way you have a realistic expectation of what you can afford. Plus, having this information makes you more attractive to sellers and their agents. They don’t want to waste their time with people who are not serious about buying.
Speaking with people about your finances can seem a bit intrusive. You don’t want to give Joe-Shmo your annual income and credit score not knowing what he is going to do with it. It may take some time, but you want to find out as much information as possible. So whom do you ask? Here are five reliable sources you can use to learn about home loans.
Your Bank or Credit Union
Your bank/credit union can be a great resource when deciding on a home loan. They know the most about your financial standings and will often offer you the best interest rates compared to others. When speaking with your bank, make sure you ask these questions:
- What are the qualifying guidelines for a home loan and what documents do you need?
- How long will it take for my mortgage application to process?
- What is the interest rate/APR on this mortgage and are there any discount points?
- When can I obtain the loan and what will it cost me to do so?
Your Real Estate Agent
Your agent is a valuable resource in the home buying process. Not only do they know market information about surrounding houses and property, but they can also help you decide on a home loan. Ask your real estate agent the following questions:
- What are the different types of home loans that should be available?
- What type of loan is the best fit for me?
- Who will be the title escrow agency or attorney?
A Mortgage Broker
A mortgage broker is an intermediary who brokers loans on your behalf. They will find a bank or a direct mortgage lender that will work with your specific needs for a loan. Mortgage brokers are a great resource when searching for a loan. They often can find you the best loan possible. Before committing, make sure you ask them the following questions:
- What are all the different costs associated with this home loan?
- Will the lender guarantee a Good Faith Estimate?
- Will the lender offer a loan rate lock?
- How much time do they need to fund the loan?
A Real Estate Attorney
You don’t need an attorney during the mortgage process, but they can still help you make your decision. They can answer all those tricky legal questions you may have about the property and condition of the home. You want to ensure you are purchasing a home that is worth the amount of money you are loaning. Ask your real estate attorney the following questions:
- What if something goes wrong after putting down a deposit on the home?
- Is a short sale possible with this house?
- What should I look for in the property deed?
- Are there any liens or claims on the property?
Credible Online Services
Internet-based mortgage services can seem a bit scary because you don’t really know the lender. Some decide to go with online services because they are convenient and surprisingly, may be able to offer you a better interest rate or APR than your bank or broker. Just make sure you are choosing an online service that is reputable and credible. Ask them the following questions before committing:
- How do you decide the best lenders to work with you?
- Is the lender convenient, reliable, and offer good interest rates?
- How will working with you affect my credit score?
- When will I be able to review the status of my loan?
Did you think of some other questions to ask your mortgage lender before committing? Share them with us in the comments below.