25 Essential Questions to Ask When Applying for a Mortgage

Getting approved for a home loan and choosing the right mortgage is one of the most critical steps in the homebuying process With so many loan options and lenders to select from, it’s essential you come prepared with questions to ask to find the ideal mortgage for your situation.

Asking the right mortgage questions upfront makes sure you understand all the key factors, costs, and fine print before committing to a loan Here are 25 crucial questions to ask lenders when applying for a mortgage.

Loan Basics

These fundamental questions help you learn the mortgage basics each lender provides

• What are the different types of mortgage loans you offer? This learns if they provide conventional, FHA, VA, USDA, adjustable-rate mortgages (ARMs), fixed-rate, and other options.

• What are your current interest rates and APRs? Ask for quotes on both 30-year and 15-year fixed mortgages as well as 5/1 or 7/1 ARMs if you’re considering those.

• How do you determine mortgage rates and fees? Get specifics on credit score minimums, down payment impacts, and other rate decision factors.

• What down payment options are available? Key detail to learn if you’re short on funds for a 20% down payment.

• Is private mortgage insurance (PMI) required? If so, what is the cost and when can PMI be removed?

Loan Costs

Understanding the true costs of a mortgage is critical before agreeing to terms:

• What are estimated origination and underwriting fees? Get itemized estimates of lender fees.

• What third-party fees will I pay? Title insurance, appraisal fees, and more should be disclosed.

• Are rate lock fees charged and for how long will my rate be locked? Locking in your rate comes with a fee that varies by lender.

• Does your loan have discount points and prepayment penalties? Ask for explanations if unfamiliar with these costs.

• What are estimated closing costs? Lenders should provide a Loan Estimate outlining all fees.

The Lending Process

Asking about the lending and approval process helps set proper expectations:

• What documents and financial information will I need to provide? tax returns, bank statements, etc.

• How long does your approval process take? Gauge if the lender can meet your home purchase closing date.

• What credit score minimum do you require? Each lender has its own threshold.

• Is loan pre-approval available? Pre-approval shows sellers you are qualified and serious.

• Do you service the loans you make or sell them to other servicers? Knowing who will handle your long-term servicing is useful.

• How can I get loan status updates and check progress? Online portal access, text updates, etc.

Working With the Lender

It’s key to understand the lender’s communications process and who you will interact with:

• Who will be my loan officer and main contact? Get their direct contact information.

• What is your communication process like during the loan application? Email, phone call frequency, document uploads, etc.

• For issues after closing, who do I contact and how? Get servicing department info in case you need assistance later.

• How does your company handle disputes or complaints from borrowers? They should have a formal dispute resolution process.

• Can I get direct access to a processing manager or senior officer if needed? Request escalation contacts in case your loan officer cannot solve an issue.

Choosing Your Lender

Smart mortgage borrowers interview multiple lenders and ask these important questions before deciding who to work with:

• Are you a direct lender or a mortgage broker? Understand who will fund the loan vs simply processing paperwork.

• How long have you been in business and what experience do you have? Look for an established track record over many years and through various market cycles.

• What percentage of your borrowers go into default? High default rates could indicate loose underwriting or predatory lending.

• Do you sell your loans or retain servicing rights? If sold, you lose the relationship and access to whoever approved your loan.

• Can you provide references from past borrowers I can contact? Speaking to their past clients provides insights on the lender.

Doing your due diligence by asking the right mortgage questions prepares you to make the most informed borrowing decision. Be sure to get rate quotes and loan estimates from multiple lenders before applying so you can thoroughly compare options.