This is a volatile real estate market and the days of assuming that you qualify for a loan or expecting a guaranteed closing are long gone. You better make sure that the mortgage company or broker you're dealing with can take you to the closing table and ensure you don't leave it without the keys to your new home. Your best bet is to interview multiple lenders and compare fees and services BEFORE you allow anyone to pull your credit score. Why? Because each time your credit score is pulled it may cost you a points.
With that said, here are some questions that you (or your Realtor) should ask your loan officer before you sign on the dotted line.
- What is your prequalification process, how long does it take, and what documentation is required?
- A prequalification just provides you with an estimate of how much home you can afford based on your income.
- What is required to obtain a preapproval?
- A pre-approval means the lender has verified your credit, income, and assets and has probably submitted your application through automated underwriting and received an approval. As such, your loan will be finalized pending a satisfactory appraisal and provided your financial circumstances do not change significantly before you go to settlement.
- Do you charge any fees for prequalification or preapproval? Are there any application fees?
- How long will it take to process my loan application?
- When is my credit report pulled? Is there an associated cost?
- When do I receive my Good Faith/Truth-in Lending Estimate? How accurate is it? Under what circumstances might there be a significant change?
- When can I lock my interest rate and for how long? How much would it cost to request an extension?
- Do you offer any service guarantees if we don't settle on time?
- How will we conduct our communications? Fax, email, phone, office visits?
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