Questions to Ask Your Lender

Before you choose a mortgage lender, ask these questions. A good lender will answer each one clearly.

Which type of mortgage is best for me?

A good lender explains the pros and cons of each loan type for your situation instead of steering you to one. Ask, “What are my options?”

How much down payment will I need?

A 20% down payment is every lender’s ideal, but it’s not always required. Ask what each down payment option means for your rate, monthly payment and mortgage insurance.

What will my interest rate be?

Ask for a rate quote. If you’re considering an adjustable-rate mortgage, also ask how often the rate adjusts, how much it can change each time, and the highest it can go.

When will you do a hard credit check?

A lender needs a hard credit inquiry to give you a firm rate quote. If you’re comparing lenders, have these checks done within a short window, such as a week, to minimize the effect on your credit score.

Do you charge for an interest rate lock?

A rate lock keeps your rate from going up before closing, though it won’t go down, either. On a typical home loan (not a construction loan), there should be no charge.

Will I have to pay mortgage insurance?

Probably, if you put down less than 20%. Even “lender-paid” mortgage insurance is usually built into your rate. Ask what it will cost, whether it’s upfront or ongoing, and whether you qualify for loans that don’t require it.