As a borrower, you have the right to ask questions of any lender with whom you might do business. Before handing over your financials, ask the loan officer, mortgage broker, or online lender the following six questions:
1. Does the application fee include the credit report, or do I pay for that separately?
2. Approximately how much should I factor in for closing fees? (Your lender is required by law to give you a good-faith estimate when you apply for your loan, but your loan officer should also be able to provide an estimate of closing costs before you apply.)
3. How long have you been in the mortgage business? (Look for a lender with experience, who can walk you through the application process and help you work through any obstacles that might crop up.)
4. Can I get a preapproval letter to take with me on my house hunt?
5. Will I be able to lock in the interest rate at any time? (Interest rates change daily, and many lenders will give you the option of locking in a rate at any time.)
6. Will this loan have prepayment penalties? (Make sure that you can prepay your loan without incurring a penalty. There may come a time in the future when you will want to make additional payments to save money on interest.)
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