Ten Questions for a Loan Officer
A loan officer helps you secure your mortgage, which includes sending your application through the underwriting process and finalizing all the details. Since a loan officer plays a pivotal role in the house buying process, you should direct your important questions to him or her. Here are some questions you'll want to ask a loan officer.
What affects my chances of getting approved for a mortgage loan?
Since this is his or her specialty, a loan officer knows why mortgage applicants get turned down. The surprising truth is that your odds of getting a mortgage go far beyond simply your credit. A loan officer will help you see the whole picture, including how your debt-to-income ratio and loan-to-rate ratio affect the underwriting process. Furthermore, a loan officer will explain how your income and assets can help or hurt the odds of the mortgage loan approval.
What can I do to secure the mortgage?
After a loan officer explains all the things that can affect your shot of getting the mortgage loan approved, he or she can help you clean up your financial picture. A loan officer knows that getting your finances organized can make the home buying process a success. For instance, if you are able to pay off any loans or credit cards, a loan officer might advise you to do so. A loan officer should be able to process your financial situation and help make decisions to lower your debt-to-income ratio and raise your credit score.
If I get denied, what are my options?
In a situation where your mortgage loan application is denied, a loan officer should be able to offer valuable advice. He or she should be able to explain why you were denied, and a loan officer should offer advise on how to resolve these issues. If your debt-to-income ratio is too high, which is the number one reason mortgage loan applicants are denied, a loan officer will give you ideas on how to lower your debt.
What do you think is the best mortgage for me?
A loan officer will be well versed on the many different kinds of mortgages, the rates they offer, and the pros and cons of each. He or she can examine each option and explain the details, and a loan officer will often be able to give a recommendation based on your financial situation.
Will I be able to negotiate fees, points and closing costs?
The financial institution you are working with will have their own set of fees, some of which could be negotiable. A loan officer can offer a list of set fees and explain which you could be exempt from. Also, he or she should let you know if there are ways to lower any fees. These fees add up, and lowering them will help you at closing.
Is private mortgage insurance required?
As you are examining loan options with a loan officer, be sure to ask if you will be required to have private mortgage insurance (PMI). If you make less than a 20% down payment, your lender might require private mortgage insurance. This can cause your monthly mortgage payment to be higher, since PMI is included in your mortgage. A loan officer will be able to estimate the monthly payments you'll owe.
Who services the loan?
Some lenders service the loan in-house, meaning you pay them directly. Other lenders, however, outsource your loan to a different mortgage lender. Ask a loan officer who else might service your loan. This information might not be available until the underwriting process is complete; some lenders choose which loans to keep and which to outsource.
How long will it take for my loan to be approved?
A loan officer will have an idea of whether you'll be waiting a few days or a week for the results of your mortgage loan application. Also, ask if you'll be able to contact him or her to check the status of your loan application.
When will my mortgage loan close?
Closing is the final step of your mortgage loan application and paperwork. A loan officer will be able to tell you how long this process usually takes, as well as provide you with updates throughout underwriting.
When does the lock-in period end?
At the end of the lock-in period, your mortgage rates become final. A loan officer can tell you how long this period is and what your options are during this time.
Preparing for and finalizing a mortgage is complicated, but a loan officer can guide you through each step. Ask a loan officer any questions you have to avoid confusion later. You should be able to contact a loan officer throughout the mortgage application process.
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