What to Ask When Comparing Lenders
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What questions should you ask during this process? We explore some of the most important ones below.
Comparing FHA Lenders
There are three areas most people think of when comparing lenders. Mortgage loan interest rates are one, and lender fees are another, and the lender’s credit requirements for loan approval, and minimum downpayment.
But you should also ask if there are benefits for being a new customer, for opening a checking account at that financial institution in association with the loan where applicable, and whether or not your lender is willing to issue a home loan for a multi-unit property.
But what about the not-so-obvious questions you should be asking?
Ask Your FHA Lender Which FHA Loans They Currently Offer
Why? Simply because not all lenders offer all FHA loan options. Can you get an FHA mobile home loan in New York City?
Can you get an FHA condo loan in the most rural parts of South Dakota? Not all FHA loans are right for all markets, and you’ll want to be sure your lender offers the type of loan you need.
Don’t forget to ask up front before filling out any forms whether the type of loan you need is available, and remember that there is a different type of FHA loan for condos, manufactured homes, and even building a new home from the ground up on your own lot.
FHA Loans That Require Construction
Are you buying a home with an FHA 203(k) rehabilitation mortgage? If your home loan requires construction, you’ll want to ask the lender if there are approved contractors it likes to use or where to look for reviews of builders in your area.
Be sure to ask the lender what happens is a rehab loan project comes in over or under budget, what happens if there are delays, and whether or not the rehab loan process will allow you to act as your own builder (restrictions apply).
Ask About Interest Rate Options
How can the lender lower your rate? It may feel uncomfortable (at first) to ask, but you might be surprised at how a direct question of the loan officer can start a whole different conversation. Try asking the lender, “How can we bring that interest rate down? What are my options?”
Take notes about how the lender responds and what they tell you. Lenders who try to talk around the subject might be best avoided. The lender giving you a direct answer may be one worth looking into.
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