10 Questions You Should Ask Mortgage Lenders

1.  What’s the interest rate?

Right off the bat, you should ask your lender for a direct interest rate quote 

as well as the corresponding annual percentage rate (APR) for the loan. Since 

the APR accounts for fees and other loan-related charges, it gives you an 

apples-to-apples comparison among lenders. Don’t be afraid to shop around 

until you find one you’re comfortable with.

2.  How many points does that include?

A point is a fee paid to the lender at closing in exchange for a reduced 
interest rate. (1 point = 1% of your total mortgage amount.) Be sure to ask 
your lender how many points are included in the quoted interest rate and 
what the benefits might be to buying more or fewer points.

3.  How many points does that include?

A point is a fee paid to the lender at closing in exchange for a reduced 
interest rate. (1 point = 1% of your total mortgage amount.) Be sure to ask 
your lender how many points are included in the quoted interest rate and 
what the benefits might be to buying more or fewer points.

4.  When can I lock down the interest rate?

Interest rates always fluctuate. Sometimes locking in a low rate can really 
pay off. Ask your lender when you can lock down a particular rate, and for 
how long. Keep in mind, lenders will usually offer lower interest rates for shorter-term locks and higher interest rates for longer-term locks.

5.  What are my estimated closing costs?

Remember to factor in the various costs and fees associated with buying a 
home. Particularly closing costs. Closing costs include loan-origination fees, 
appraisal fees and attorney fees (if any), to name a few. Ask your lender to estimate what your closing costs might be so you can budget accordingly.

6.  Are there any other costs or fees I should know about?

Be sure to ask your lender for a detailed list of all the costs and fees you 
might encounter during the homebuying process. The more information 
you can collect up front, the more prepared you’ll be should you run into any unexpected expenses along the way.

7.  What’s the difference between a fixed-rate and an adjustable-rate mortgage?

A fixed-rate mortgage keeps the same interest rate for the life of the loan, 
typically 15- or 30-year terms. This keeps your monthly payment for principal 
and interest steady and predictable over time. Adjustable-rate mortgages, or 
ARMs, have interest rates that change based on the market, so your payment 
will go up and down. Most ARMs are based on a 30-year term and typically 
start with an initial fixed interest rate for a specific period of time, usually 5, 7 or 10 years.

8.  Are there any special requirements I should be aware of?

There are all sorts of qualification guidelines for homebuyers applying 
for a mortgage. Typical requirements relate to income level compared 
to debt, employment status and credit history. But, if you’re a military 
veteran or first-time homebuyer, you may also be eligible for special 
government-sponsored mortgage programs. Talk to your lender to see 
what you might qualify for.

9.  Can you estimate when the closing will be?

A lot of factors help determine when your exact closing date will be—many 
of which are completely out of your control. Ask your lender for a ballpark 
estimate of when you might expect to close. That way you’ll at least have a 
rough idea of the timetable you’re working with.

10.  Is there anything that could cause a delay?

The best way to avoid delays in your closing is to stay in touch with 
your lender and always provide the most up-to-date and accurate 
documentation in a timely fashion.

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