Ask your Loan Officer these Questions Before You Buy!

Ask your Loan Officer these Questions Before You Buy!

When people are looking to purchase a home they typically need financing.  The interest rate is important but the loan officer handling the loan is even more important.  You want to ask your loan officer the following questions and treat it like an interrogation so that you make the right choice.

How much experience do you have?

You want to ask your loan officer how long they have been in the business.  Years on the job will not guarantee they will do a good job but it is something to consider.  The longer they have been in the industry, the more familiar they will be with home loan programs.  You also want to find out if they have experience with any special loan programs that they are trying to enroll you in.

What is your license number?

You want to ask your loan officer for their license number.  You can check and see if they have a complaint history and how any complaints were handled.

What are the closing costs?

You want to ask your loan officer about closing costs right away.  You want to find out what closing costs are standard and what fees are specific to them and their company.  You also want to find out about taxes and third party fees.  You want to get a Good Faith Estimate right away so you can compare apples to apples if you are shopping around for loan officers.

Do you have any special loan programs?

There are always new and different loan programs out there that you should look into.  Sometimes you can purchase a home with a very small down payment and many people that do not think they would qualify for a loan may possibly be able to purchase a house. In Illinois, there are several down payment assistance programs that IHDA (Illinois Housing Development Authority) offers.  Read more here about down payment assistance

What is the timeline to close?

You want to ask your loan officer how long it will take to close once you have a property under contract.  Find out how long it takes them personally to close on average.  If you are applying for a special loan program, you want to find out timelines for that specific program.  You also want to find out details like how long a loan is in underwriting, how soon appraisals are ordered, etc.

Are there any prepayment penalties?

You want to ask your loan officer if there are any prepayment penalties if you decide to pay the loan off sooner.  How much would the prepayment penalty be if there is one?

Is the loan a fixed rate?

You want to ask your loan officer if the loan is fixed or adjustable.  Adjustable rate mortgages can be risky so sometimes it is better to lock in a rate.

What different terms do you offer?

What will the payment difference be between a 15 year, 20 year, and 30 year mortgage?  Sometimes, it is wise to go with a shorter term if you want to pay off a house quickly.

Can I get a better rate?

Sometimes you can get a better interest rate by paying points on the front end.  Not all  loan programs are created equal so some have a lower interest rate.

How will DTI and miscellaneous debt affect my application?

You want to ask your loan officer the debt-to-income ratios that are required to qualify for a loan.  If your debt-to-income ratio is too high, how can you bring it down?  For example, will paying off a credit card or paying off a car loan qualify you?

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