Questions to Ask Your Mortgage Lender

The more you read up on mortgage industry information, the better you'll be able to deal adeptly with your mortgage lender. Here are some suggested questions to ask before signing with a lender.

1. What's my interest rate? This is one of the most obvious yet most important questions. Your interest rate will determine your monthly payments and how much you'll pay in interest expense over the life of the loan. When you're collecting mortgage industry information, a good way to compare offers it to look at the APR, or annual percentage rate. This number takes into account the total cost of borrowing-the interest rate and all other charges and fees.
2. Will my interest rate change? This question is important to ask to determine the type of mortgage you are getting. With a fixed-rate mortgage, your interest rate and payments will remain fixed for the life of the loan. With an adjustable-rate mortgage, your interest rates will fluctuate. If your interest rates will change, you should ask when they will change, or reset.
3. Do you charge points? As you find more mortgage industry information, you will learn that most lenders will let you buy down your interest rate if you pay more up front. Lenders also sometimes charge origination points, which are an administrative/processing fee that does not affect your interest rate. It's important to understand which type of points you are paying.
4. Can you give me a reasonable estimate of all closing costs and fees? By law, lenders have to provide a good-faith estimate of closing costs and fees within a few days of receiving your application. As you gather mortgage industry information and compare different loan offers, take closing costs and fees into account, as they can be quite expensive.
5. Can you lock in my interest rate? The closing process on a mortgage takes a while-often up to 30-60 days. You don't want the interest rate you were quoted initially going up during this period, so ask your lender to lock in the rate you were quoted so it remains constant during the closing process.