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Questions To Ask a Mortgage Lender

The Short Version

  • Everyone’s financial situation is unique, so avoid general questions and ask things that relate to your financial situation
  • Ask your lender to walk you through the fees and payments on the Loan Estimate form so you know what you’re paying for and can plan ahead
  • Just because one lender operates one way doesn’t mean they all do. Ask your lender to explain their terms when it comes to closing on the mortgage


No lender is one-size-fits-all. By asking the right questions, you can try a mortgage lender on for size and see if they’ll fit your specific needs. The difference between the right lender and the wrong lender could save (or lose) you thousands of dollars. 

You can seek out lenders on your own or go through a mortgage broker, who acts as a liaison to connect you to lenders they think would be a good fit. Either way, embrace your inner HR manager, and take the time to interview lenders before you commit to a mortgage. 

If you’re wondering what questions to ask, wonder no more. We’ve got a list of questions that we broke down between three categories: borrower questions (that’s you!), mortgage loan questions and mortgage lender questions.  

Borrower: About You

Asking questions that are specific to you and your financial situation will be helpful as you decide which loan you want, which lender to go with and ultimately how much house you can afford. Sharing relevant financial information can also help lenders better understand your priorities.

What Loans Do I Qualify For?

There are different types of mortgages. The ones you’ll be eligible for will depend on your income, debt-to-income (DTI) ratio and credit score. 

Don’t sweat, though. A lender can help you figure those crucial numbers and familiarize you with the different types of mortgage loans. 

Here are some of the common types of home loans you’ll be looking at: 

  • Conventional loans: These loans are best for borrowers with a credit score of 620 or higher who can make a 20% down payment. The two primary conventional loans are fixed-rate mortgages (the interest rate stays the same over the life of the loan) and adjustable-rate mortgages (the interest rate stays the same for 3 – 10 years, then it adjusts based on the market interest rate regularly).
  • Government-backed loans: These loans are targeted to lower-income borrowers, borrowers with a credit score below 620 and borrowers who will make a down payment that is less than 20%. We’re going to focus on Department of Veterans Affairs (VA) loans (which help qualifying veterans become homeowners) and Federal Housing Administration (FHA) loans (which are designed for borrowers with lower range credit scores and past credit issues).

After sharing your circumstances and financial situation with your lender, ask them which types of loans could fit your financial situation best! 

Am I eligible for down payment assistance? 

If you’ve ever found yourself staring at your bank statement wondering how and when you’ll have enough to make a 20% down payment, down payment assistance could become your best friend. 

FHA, VA, HomeReady® and Home Possible® loans all qualify for down payment assistance.

You can apply for forgivable loans, grants or matching programs that help cover your down payment – especially if you’re a first-time home buyer.

Every down payment assistance program has different qualifying criteria, so you’ll need to do your research and talk to your lender. Your lender should be familiar with these programs and be able to help match you with the right one(s). 

Should I co-sign a loan with my partner?

If your credit history might hurt your chances of getting approved for a mortgage or getting a lower interest rate, a lender may recommend that you get a co-signer. But there are a few things you should know before you start recruiting potential candidates.

While you’re likely to get approved or get a better interest rate because of your co-signer’s stronger credit history or higher income, the loan will impact both of your credit scores. And if you can’t pay the loan, the co-signer is legally responsible to pay it. 

You and your co-signer should both know and understand what you’re getting into before making any commitments. 

When will you do a hard credit check on me?

When it comes to getting a mortgage, your credit score is one of your most valuable assets. Your score measures your reliability with money. It tells lenders how responsible you are and whether you can pay off your debts on time.

A credit score is a three-digit number between 300 and 850. It’s calculated based on how much you owe, your payment history, open credit accounts and other factors. 

A hard check on your credit report is an indication to a credit reporting bureau (TransUnion®, Equifax® or Experian™) that you’re considering taking on new debt. When a lender (or anyone else) performs a hard credit check (or hard pull), it can hurt your credit score in the short term. 

This is different from a soft pull or check (like the ones you can get for free from your bank or credit card company). A soft inquiry won’t affect your score. You can check your credit score for free with a soft pull anytime.

You can’t avoid a hard credit check when you’re taking out a mortgage. But, if you know when a lender is going to check your credit, you can pool multiple lender checks into 2 weeks. The credit agency will record all the hard credit checks performed within that time frame as one hard credit check, minimizing the impact of multiple checks on your score. 

What do I need to bring to closing?

It’s finally time to close! The closing costs will be paid, the mortgage will be signed, the title of the house will change hands and you’ll finally get those house keys. But what will you need to bring with you on closing day? 

For starters, you’ll need a photo ID (think: driver’s license), so the lender can verify your identity. You’ll also need to pay the down payment, closing costs and any other fees that day. 

For this, you have two options. You can either initiate a wire transfer of the money from your bank, usually to an escrow account, or you can bring a cashier’s check to the closing. Your lender will tell you how much the closing costs will be before the closing. 

Lenders may also require that you bring your proof of insurance or other requested documents. Make a list of all requested documents and checks. All you want to worry about on closing day is which pocket to put your brand new house keys in, not missing paperwork or cashier’s checks.

Mortgage: About Your Loan

Understanding the terms of your mortgage loan and what you can and can’t do with it should be the natural next step for your line of questioning. 

Can I get a rate lock with a float-down option?

Yikes! Every industry has its lingo, and the mortgage industry is no different. Fortunately, we’re really good at translating mortgage-speak. 

Rate locks and float-down clauses are straightforward concepts that can help you take advantage of the interest rates you were quoted when you first sat down with lenders. 

  • Rate lock: A rate lock is an extra fee you pay to freeze the interest rate on a mortgage. The rate is “locked in” and won’t change during the specific period you and the lender agree on. Locking the rate protects you in case interest rates go up. (Depending on interest rates, a lender may or may not recommend a lock.) 
  • Float down: If you lock in your rate and interest rates go down between the time you paid for the rate lock and your closing, the float-down option allows you to take advantage of the lower interest rate. Some lenders offer this as part of a rate lock, but it’s not universal. 

Will I have to pay for mortgage insurance?

Just when you think you’ve gotten all the insurance anyone could possibly need, another one could sneak into the home buying process: mortgage insurance.

Mortgage insurance protects your lender in case you can’t make your monthly mortgage payments. 

If you plan on paying less than 20% down or you’re getting an FHA mortgage, you’ll likely have to pay private mortgage insurance (PMI) for a conventional loan or mortgage insurance premiums (MIPs) for a government-backed loan.

Your lender will sell you the insurance and should bundle it into your monthly mortgage payments. 

What will my monthly mortgage payment be?

While the lender will walk you through your interest rate and mortgage rates, they may not break down the monthly mortgage payment unless you ask. Many fees can get folded into the mortgage payment as well. 

Ask your lender to break the monthly payment down into these five categories so you can understand where your money’s going. 

  • Principal
  • Interest
  • Mortgage insurance
  • Property taxes
  • Homeowners insurance
  • Closing costs and other fees

Knowing the monthly mortgage payment ahead of time can help you decide if you can afford the house and plan a monthly budget. 

Can you walk me through all the closing costs?

There are lots of fees to keep track of. Closing costs are extra expenses you pay on top of the home’s purchase price. They usually equal 2% – 6% of the loan amount. 

Mortgage lenders are legally required to give you a Loan Estimate that details all this information. You should feel free to ask the lender to walk you through each fee so you’ll know what’s getting bundled into your closing costs. 

Here are some of the fees you can expect to see: 

  • Lender fees
  • Origination fee
  • Service fees
  • Application fee
  • Credit check fee

Have your lender walk you through each fee and explain its cost and purpose. You should also confirm that the costs and fees are part of the closing costs and not the mortgage payments. 

Is there a prepayment penalty?

Let’s say you come into a substantial sum of money. Maybe you got a bigger-than-expected bonus or a new job. Maybe someone left you a surprise inheritance or you won the lottery. However this unexpected windfall came into your life, you decide that you want to use that money toward your mortgage to pay it off early. Savvy money move, right?

Depending on your loan terms, maybe not! 

Some lenders charge a prepayment fee if you pay off part or all of your mortgage loan before the end of your repayment period (aka term). Ask the lender if they charge a prepayment fee. You’ll be paying enough for what’ll likely be your biggest investment. Why add extra, unnecessary fees to the price tag?

Mortgage: About Your Lender

Learn more about what your lender has to offer, including special features or perks. And confirm who you’ll be working with throughout the mortgage qualification process. 

Who will be doing the underwriting?

Let’s translate that first! 

Mortgage underwriting is the act of collecting, reviewing and verifying your financial information. This step will determine whether you get approved or denied for a home loan. 

Some mortgage lenders outsource the underwriting while others do it in-house. Either way, ask the lender who your point of contact will be and the estimated timeline to complete the underwriting. This way, your expectations are set, and you’ll know that you’re sharing your financial information with the right people. 

What are my mortgage point options?

Many lenders let buyers purchase mortgage points. These optional discount points help reduce your interest rate. But, depending on how long you plan to stay in your new home, as well as what you can afford upfront, mortgage points may not be a good fit for your situation. 

Every lender has different practices around selling mortgage points. Ask them if they offer mortgage discount points, how they work and what you might be eligible for.

Will you continue to service my loan after closing?

We can see the bright, red question mark hovering above your head. Yes, it’s true, your original lender may not be your lender for the life of the loan.

Many lenders will sell mortgage loans to major lending companies to free up their capital (read: cash), so they offer more home loans. 

It’s pretty standard for a lender to indicate whether they will service your loan for the life of the loan. The good news is that changing the loan’s servicer will never affect your rate or the terms of your loan. 

Loans change hands often. What matters is who handles all the monthly payments. 

Lenders are legally required to notify you 30 days before the sale, allowing you time to set up an account with the new lender. 

What’s your turnaround rate?

Life happens. And you know that as well as anyone. Any number of things could push a closing back. However, lenders should have an average turnaround rate from applying to closing that they can quote.

Mortgage lenders need lots of information before they can close on a home loan. They’ll need the results of the home appraisal, and they’ll need an extensive amount of financial documents from you. They may also have to wait on services like home inspections. 

Some lenders are faster and more efficient than others. So, be sure to ask about their turnaround rates on critical aspects of the home buying process. Having a quicker turnaround rate may make your offer more desirable to a seller.

Do you offer eClosings?

If you embrace tech and its promises of convenience and time-saving, this option could be the right one for you. With more people working remotely and with lingering concerns around COVID-19, more and more lenders are starting to offer electronic mortgage closings. 

Ask your lender if they offer any digital options you can take advantage of. 

Ready. Set. Ask!

When you’re shopping around for lenders, focus on asking questions that clearly outline the entire mortgage process step by step. 

Look for a lender who is fluent in mortgage-speak but answers your questions in a simple, clear, jargon-free way. No question is off the table. Take the time to find the lender that’s right for you. 

Take the first step toward buying a home.

Get approved. See what you qualify for. Start house hunting.

  1. Freddie Mac. “Home Possible®.” Retrieved October 2021 from

  2. Fannie Mae. “HomeReady Mortgage.” Retrieved October 2021 from

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