16 Questions to Ask a Mortgage Lender

You chose your new home with care. It's essential to take the same care to find an experienced and knowledgeable loan officer who can help guide you through the process. We advise seeing a loan officer before you make an offer on a home. These questions can help you ensure that you're working with an experienced loan officer who can help you succeed in your home-buying journey.

1. What fees (such as origination fees) will I be charged if I get a mortgage through you?
   Generally, all lenders charge for the same fees. This includes origination, title, appraisal, credit report, recording (usually charged by the state or county and passed to you), and others. However, some lenders will charge much higher fees, for example, a percentage rather than a flat fee.
2. What are your mortgage interest rates? What is the APR?
   Remember that the rates you see on the website (and likely what the loan officer will quote you) are the lowest rates currently offered. Your rate may be higher, so ask what the highest rate is to get the range in which your interest rate will fall. Since advertised interest rates don't always include fees, there are better ways to compare loans. Instead, ask for the APR, or annual percentage rate, which consists of all possible fees and will help you better compare both rates and fees between lenders. Check out WaFd Bank's mortgage rates and compare the current APR to different mortgage types.
3. If I fall on hard times, what programs do you offer that would help me keep my home?
   Every lender should have a program to help you keep your home if you face economic hardship. Some programs are more robust than others, so it's a good idea to ask all lenders you're considering what their programs include. WaFd Bank offers multiple homeowner assistance programs to help you keep your home if you fall on lean times.
4. What are your required credit qualifications?
   Sometimes, credit qualifications are very strict, while other lenders are more lenient. If you want a lender who will work with you on your unique situation, try finding a portfolio lender. Because they don't sell their home loans, they have more flexibility to work with you and help you get approved.
5. How often and how will I be updated on my loan's progress?
   This is important—the home buying process can be lengthy, and you want to ensure you know where your application or loan is in the approval process. Will you be emailed, or should you expect a phone call? Will you be updated when your application advances to the next step or every week, regardless of movement? Some lenders are more communicative than others.
6. Do you offer any help for home buyers, such as grants, forgiveness loans, or down payment assistance? Do I qualify?
   Many banks and credit unions offer grants and/or forgiveness loans to their clients, and many of them also work with other assistance you might qualify for, such as state home buyer grants. Even if you think you don't qualify, always ask and apply. You might be surprised! Learn all about WaFd Bank's Smart Start mortgage with down payment assistance, and even use our calculator to see if you might qualify before filling out an application.
7. Do you have any mortgage options where I can lock in an interest rate? If yes, how long does the rate lock last?
   This is a good option if you know you want to go with a specific lender but also know it will take some time to find a house that fits your needs. Rate locks generally last between 30 and 90 days; if you close within a specific time frame, the interest rate you received when you submitted your application will not change. This way, you're protected if interest rates rise while you're still house shopping.
8. Do you have any preapproval or prequalification programs?
   A preapproval or prequalification can be very helpful while you're putting in offers on a home; it shows the seller that you're serious about buying and you have all your finances in order, which makes for a smooth closing. Some lenders provide an electronic initial approval, while others provide a full manual review of loan applications with an underwriter to provide additional assurances on your loan application. Make sure you understand the differences between the assurances that your lender will provide to you before closing so you aren't surprised at the last minute.
9. Do you charge prepayment penalties?
   Generally, mortgages do not have prepayment penalties, which are fees charged if you pay off a loan earlier than the calculated last payment date, but it's always worth asking! If your lender charges these fees, looking elsewhere might be worth it.
10. What is your average loan processing time?
    Sometimes, this can be the difference between officially closing the deal and losing out on a house. It can also be inconvenient to wait longer to get your keys than expected. Most loans close between 30 and 60 days, but sometimes, they can take longer.
11. Do you offer any discounts for inspections, home ownership classes, or for setting up auto-pay?
    Some banks and credit unions will offer a discount on fees they charge or even offer you a lower interest rate if you take a home ownership class or sign up for autopay. Knowing about ways to save is always worth it!
12. If I get my mortgage through you, are you also the loan servicer?
    Sometimes, a lender will only originate a mortgage, which means they will process and underwrite your mortgage application. Mortgage servicing is sometimes done by other companies, which is the company you send payments to, ask questions, get statements from, and work with when you get homeowners insurance. It can be much easier to have your lender both originate and service your loan, so there isn't a question about who to go to if something comes up.
13. Which type of loan is the best choice for my needs?
    Your loan officer should ask you several questions before offering advice or suggesting a loan that's right for you. For example, they may ask you how long you plan to live in the home, whether you're subject to job relocation or transfer, and if you value consistent loan payments to gain insight into your comfort level with a fixed or adjustable-rate mortgage. The loan officer should explain how the payment will change, how high the payment can go if the interest rate and payment are based on an index, what the margin is, and more. If you need help understanding their explanation, consider a different type of loan or loan officer.
14. Is PMI required with this mortgage option?
    PMI is private mortgage insurance, generally required if you buy a home with less than 20% down. Some lenders offer options where you don't have to pay PMI and can have a smaller down payment. Always ask for options that don't require PMI and if you qualify.
15. What documents are needed for approval? Can I submit them online?
    An experienced loan officer will know which documents you'll need throughout the process. Find a loan officer who will explain each step and keep in touch as your loan application proceeds toward closing. Most lenders also have a secure online portal to make submitting documents a breeze; if they don't, you'll have to take documents to your loan officer in person or send them another way, such as secure email or fax.
16. How much down payment will I need?
    There are more options that allow you to have a lower down payment than ever before. While 20% down has been customary to get the best interest rates, discuss the options that require less and any associated costs that might come with those options.

WaFd Bank is Here to Help

At WaFd Bank, we know navigating the buying and selling process can be tricky. For over 105 years, we've specialized in helping people achieve their home ownership dreams with a variety of mortgage options to fit their needs. To find out how we can help, visit your local branch, contact one of our friendly loan officers, or give us a call at 800-324-9375.