While the loan officer is scrutinizing you, you should be scrutinizing the loan officer. A great loan officer is one who goes to bat for you, fighting to get you the best interest rate and ensuring your loan is approved without any hiccups. However, even the best loan officer can't help you if he isn't sure what you want. It's in your best interest to have some serious loan-related questions ready so he can get you into your new home.
Rates and Locks
When your loan officer quotes you an interest rate, ask where he got it and when. While interest rates are set on a federal level, he could be talking about an adjustable rate instead of a fixed rate Your credit score does impact the rate you qualify for, so shop around and see what rates you’re offered based on your score. Always ask the loan officer what interest rates her company offers.
Your loan officer brings lenders to the table for your deal, but he gets compensation from somewhere. More often than not, you can negotiate these fees. You'll find them listed in your Good Faith Estimate and Truth-In Lending Disclosure. If your loan officer doesn't get this to you within three days after applying, he has violated federal law. That alone should make him someone you don't want to do business with.
If the rate you hear sounds too good to be true, that's a good time to ask if there are any strings attached. Ask about associated costs, such as points, title fees, escrow deposits, homeowner’s and mortgage insurance. If your loan officer is licensed with the Department of Real Estate, those costs have to be in the Good Faith Estimate. Any loan officer who fails to tell you about these extra costs could be violating the law, and you're better off taking your business elsewhere.
Ask about the chances of your loan getting sold to another lender or servicer. Federal law requires lender give this to you in a percentage amount. This sell won't change your payment amount or terms, just whom you pay. You'll want to know if your loan servicer -- the company collecting your payment and managing your escrow account -- changes. The new outfit could make changes to your escrow deposits and insurance terms.
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