Other Important Questions to Ask Your Loan Officer

There’s a lot of lists out there for buyers on common questions to ask your loan officer/broker, but here’s a few more questions that should be asked but usually are not:

• What type of mortgage program do you have me approved on?
  • Most common: 80/20, 100% one loan, Conventional, FHA. Be wary of interest-only loans or ARM loans as they are typically not the best loan for you over the longer term.

• What is the maximum seller contributions allowed with this program?
  • Most common: 3%, 6%. Lenders’ maximum seller paid closing costs will vary based on the lender and loan. It is important that you know the right amount so that you do not ask the seller for more than you can get… the difference is typically refunded to the seller.

• Are you going to be required to re-pull my credit before closing?
  • If your credit has to be re-pulled you want it re-pulled prior to final underwriting commitment and not have it re-pulled after the final underwriting date. It is important not to seek new credit or add debt (cars, furniture, etc.) before closing.

• Who will be funding this loan the day of closing?
  • Local funds are more likely to be there on time… if the funds are coming from California, you don’t want to close before 11am because of the time zone differences.

• How many loans have you funded with this funding company?
  • Do you want to trust a funding source that your loan officer has never done business with before?

• Has the file been reviewed by the funding company’s underwriter?
  • Do not be surprised if it has not. Many brokers will not send in a file to an underwriter until they have a purchase agreement, appraisal, and title work. They do not want to pay an underwriting fee until it is a real deal. Your risk is that you are solely relying on that person’s experience to determine if the borrower is approved.

• If we have a final underwriting date of ______ can you provide a copy of the funding company’s commitment letter showing all conditions including the title work and appraisal have been satisfied?
  • You want them to understand that it is this date that the file has to done by not the closing date. If they can not provide this commitment the seller has the right to cancel the purchase agreement.