Questions to Ask: Lenders

  1. Where is the location of your:
    a. Office?
    b. Processing department?
    c. Underwriting department?
    d. Closing department?


  2. What is your background?
    a. How long have you been in the business?
    b. Are you paid on commission or salary?
    c. What is your specialty?
    d. How many offices/sales associates do you work with?
    e. Will you provide quote sheets?
    f. What days off do you take?    Vacations scheduled?


  3. What loan programs do you offer?
    a. Conventional, FNMA or FHLMC?          Ratios used?
    b. FHA Direct Endorsement?     Maximum loan amount for area?
    c. VA automatic underwriting?     Residuals used?
    d. What are the most popular mortgage loans you make?  Why?
    e. What type of mortgage plan do you think would suit us?  Why?


  4. What is your pre-qualifying/pre-approval procedure?
    a. Do you pull preliminary credit reports?
    b. Do you pre-approve without property?
    c. Where do you prefer to do pre-qualifications/loan applications?
    d. How long will the loan approval process take?
    e. How long will it take to close the loan?
    f. Are your rates, terms, fees, and closing costs negotiable?
    g. Who will service the loan – your bank or another company?


  5.  What is your lock-in procedure?
    a. Will you provide a written copy for me?
    b. What is your lock-in period?
    c. Will I be able to obtain a lower rate if rates drop during this time?
    d. Do you charge for locking in a loan?
    e. Will you lock refinances?
    f. Do you have a lock-break feature?


  6.  What escrow requirements do you have?
    a. What is the number of days in advance of closing does that money need to be deposited?
    b. What form does the money need to be in? i.e. cashier’s check?


  7. Will I have to buy private mortgage insurance? 
    a. If so, how much will it cost?
    b. How long will it be required?
    c. Will I be automatically notified when I reach the loan value to discontinue PMI?


  8.  What is your processor/loan officer ratio?
    a. What is your processor’s name?   How long have they been in the business?
    b. What is the average turnaround time?   Is there currently a back-log?
    c. Will you keep me updated if it changes?
    d. What happens if your processor gets sick or goes on vacation?
    e. When is the most convenient time for me to call to get updates and be sure I can speak to a live person?


  9.  How many underwriters does your company have?
    a. What is the average turnaround time in underwriting?
    b. Do you have access to your underwriter?


  10.  Do you have an Appraiser list?
    a. Who do you like to work with?   Why?
    b. Will you add to your current list?
    c. What is the average time line involved with the appraisal process?
    d. Is there a back log?


  11. Will you give me a copy of a good faith estimate?


  12.  Are there any charges or penalties for pre-paying the loan?


  13.  What administration fees do you charge? (i.e. document preparation, underwriting, processing, etc.)


  14. Will you provide me with the Settlement Statement (HUD1) 24 hours before closing?


  15.  Would you share your company’s policy on overages?