The 7 Essential Questions to Ask a Lender when Buying a Home
By Team ARG | Jun 27, 2019 | Real Estate |
When you plan to buy a home you’re confronted with the decision to purchase with cash or to finance through an institution like a bank, credit union, private lender or mortgage broker. Most people tend to finance because it leverages your limited money by using an investor’s surplus. However, no one wants to make the wrong choice when financing because a lot of money is on the line. People want the right loan for their scenario and the best rates, they don’t want unfortunate surprises along the way, and they don’t want to get bamboozled by an inept or unethical lender. It’s a good idea to check with different lenders when beginning the process to find the right one for you. I even advocate solidifying your lender choice before looking for homes–today’s market requires speed and confidence in your numbers in order to seize opportunities. Without knowing your numbers, its difficult to optimize your deal and negotiate properly. Here are some questions that I normally suggest my Buyers to ask when interviewing Lenders:
Interest Rates. How does their company compare to others? Why? (Remember: when comparing one lender’s interest rates to another, it’s necessary to ask on the same day because rates can fluctuate by the day. What’s possible on Monday may not be possible on Tuesday. More important is to find out about their fees/ costs. See below)
What are closing costs? How are they different from down payment? How much are closing costs?
How quickly can they close after a purchase contract is signed?
Is their office local? Are their underwriters local or contracted outside of the city/state? (Underwriters are the people in the background who prepare your loan after going under contract. Your Lender’s ability to communicate/ coordinate with them easily is important.)
Are there any incentive programs that you might qualify for? What are the trade offs? (In other words, is this an actual discount in fees or does it displace fees for interest rates?)
What should be considered when buying condominiums? (If applicable.)
I’m stuck between you and this other lender. Why should I choose you?
While usually “choosing a lender” and “choosing a realtor” are interchangeable beginning steps in the process, I recommend choosing your Realtor first. Why? Because a seasoned real estate professional can give you extra tips and insight on who might be best to go with. It’s not our decision, but we do know more lenders, who are easy to work with (also their track record and reputation in the marketplace), and which lender might have the right tool in their toolbox that fits your scenario. Want to know more or who we think is the best?? Contact us!
