Questions to Ask Your Mortgage Loan Officer
Your journey toward homeownership begins with someone who can help you get a mortgage — your mortgage loan officer (MLO). The MLO is your point of contact for a lender and will help you move through the application process for getting your home loan.
Whether or not it's your first-time meeting with an MLO, here are some questions to ask:
Which Mortgages Are Best for My Situation?
An MLO knows all of the mortgage options that their lender provides. After discussing your financial situation, they can recommend the mortgage that will best fit your needs. Make sure to identify your key financial goals, such as "low monthly payments" or "paying the mortgage off quickly."
They can also help you find specific mortgage programs that can help with finances — from VA mortgages for veterans to the Key Community Mortgage.
What Do I Need for Prequalification?
Prequalification is the first step to take when comparing lenders — allowing you to start your home search early with a better understanding of what you may be able to borrow so you can find the perfect home in your price range. Start with a mortgage checklist to make sure that you're taking the steps necessary to purchase your next home.
When Will You Perform a Credit Check?
Credit checks are typically required during the application process. These are often referred to as "hard" checks because they dig into your credit score and financial background. Let your MLO know if you have had any recent in-depth credit checks, and ask them before you make any large purchases or open new accounts during this time.
What Do These Different Interest Rate Numbers Mean?
Mortgage interest rate types come in several different varieties: adjustable, fixed, or both. Ask your mortgage loan officer if you have any questions about these rate options as this is their specialty. They are there to guide you every step of the way and to present all the options available that best suit your needs. For example, an APR (annual percentage rate), combines multiple fees for a general look at mortgage costs. The APR includes interest costs and additional fees so it gives you the overall “price” of a loan, expressed as an annual rate.
What Do I Need to Know About Mortgage Insurance?
You may need mortgage insurance — also known as private mortgage insurance (PMI). This insurance protects the lender from issues with mortgage defaults and may increase your estimated monthly payments if required.
What Are My Down Payment Options?
The down payment is the cash you must pay upfront for your home when taking out your mortgage. It's typically 5-20 percent of the loan amount. Certain programs, like FHA loans or Key Community Mortgage are specifically designed for those who could benefit from a lower down payment.
What Are My Total Fees and When Will I Have to Pay Them?
Your mortgage is easier when there aren't any surprises. A mortgage can include fees for origination, underwriting, closing, and more. Ask your MLO to calculate these fees into a final payment number so you know what you'll pay. Remember that the costs can often be bundled into your mortgage payments. Talk about these fees so that you know all of your options.
How Long Does This Process Usually Take?
At any stage, it's important to understand how long the steps should take. This is important when coordinating your mortgage with buying a home so that everything is scheduled correctly. Your MLO can guide you through the process and give you a valuable timeline. This will help put your mind at ease and make you feel comfortable that everything is being handled with your best interests in mind.