Loan Interview - questions compiled to ask lender/broker

OK, I *think* this is most of it. I'll probably update and more. I made this for myself so I don't sound like an idiot when talking to a Lender. These questions come from multiple resources. I thought I'd post it to share with someone else going into the buying process soon, who like me is just learning. Answers to some of the questions are meant to circle so you don't waist time with a fast talker.

Any other additional thoughts, question to add would be great, but really this is to post for anyone who wants it

I just cut and pasted this, if there is a better way to share let me know.




Loan Interview

Name of Lender:

Name of Contact:

Date of Interview:

Mortgage Amount:




Type of Loan: Fixed Rate, Adjustable Rate, Conventional, FHA

Hybrid ARM (fixed-rate + ARM, i.e. 5 yrs fixed, 25 adjustable: most desired),

Name of Loan (doctors loan, and such names) :

Minimum Down Payment Required: built into the loan, expected at closing (?)


(If doctor’s loan, or quoted loan is being compared to doctor’s loan) Does the house have to appraise to what the loan amount is that includes the downpayment cost, regardless of the selling price? (the loan could be denied if the loan amount is above the appraisal price, so this is important)


Loan Term:

Interested Rate at Interview:

Is the rate guaranteed?: yes – how long? When? / no

Lock-In Rate Available (can get if not guaranteed) : yes – how long? Fee? - $ / no lock in


When does the lock-in occur? At application, approval, other:

If rate drops before closing, can you lock-in at the lower rate? Yes , No



APR/Annual Percentage Rate (interest rate, points, and other add-on loan fees and costs):

…………………………………………†¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.

Points/Discount Points (Discount points: These are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan and vice versa. Borrowers typically can pay anywhere from zero to 3 or 4 points, depending on how much they want to lower their rates..)


Points/ Origination fee/ Underwriting fee:
(Origination fee: This is charged by the lender to cover the costs of making the loan. The amount charged by a lender to originate and close a mortgage loan..)

When will the points be paid: paid up front, with closing costs



These can be called either or. NOTE:
Points are often disguised with different names -- such as loan discounts or origination fees -- but regardless of their name, they represent money which you -- the consumer -- must pay. And the payment is usually up-front, in cash, since it generally is not included in the loan amount.
Points paid to obtain a new mortgage are fully deductible in the year they are paid by the borrower. The IRS originally required that the borrower write a separate check to the lender for these points; in recent years, the IRS seems to have backed off of this position. However, it still makes sense to either write a separate check at closing -- or at least have the settlement statement (the HUD-1) clearly reflect the number and amount of points you are paying.

…………………………………………†¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦..
PMI: yes – how much? / no

PMI term:

Estimated monthly escrow for taxes & hazard Insurance:

Estimated monthly payment (PITI – principal, interest, taxes, ins) :




FEES:

Application fee/Loan processing fee:



What happens to origination fee if lender does not approve loan?
(we need to get this in writing before we pay)


Lender fee or Funding fee:

Appraisal fee:

Attorney fees:

Document preparation and recording fees:

Broker fees – if a broker (may be quoted as points, origination fees, or interest rate add- on) :

Credit report fee:

Other fees:


OTHER COSTS AT CLOSING/SETTLEMENT:

Title search/Title Insurance:
For lender:
For us:



Estimated prepaid amounts for interest, taxes, hazard ins, payments to escrow:

State and local taxes, stamp taxes, transfer taxes:

Flood determination:

Prepaid PMI:

Surveys and home inspections:

Total fees and Other Closing/Settlement Cost Estimates:





QUESTIONS/CONSIDERATIONS ABOUT LOAN:


Are any of the fees or costs waivable?


Is there a prepayment penalty (makes additional payments to pay loan off faster available only w/fee, don’t want this, but not that important) ?


Are extra principal payments allowed (not really something we need)?


Is the mortgage assumable (future buyer can take over remaining loan, - wonder if this is not available on doctor loan) ?


IF LOAN IS ARM, INCLUDING HYBRID ARM, ASK THE BELOW

Is there negative amortization (this is important if the loan is a Hybrid ARM if we should stay in house longer than 3-5 years, don’t accept a loan with this option!)?


What is the maximum the rate can increase during the adjustable period, (i.e. does it cap 2% per year after fixed rate is over)?


What are the rate and prepayment caps each year and over the life of a loan
(not so much important)?


What is the index that the lender is using?


What margin will the lender add to the index?


CREDIT LIFE INSURANCE: Kiplinger says use life ins to cover the mortgage amount + living costs instead

Does the monthly amount quoted include charge for credit life ins? Yes / no

If so, does the lender require credit life ins? Yes / no




TIPS IN LOAN COMPARISON:

To make a fair comparison of mortgages from different lenders, have lenders provide interest rate quotes for loans with the same number of points. For instance ask what their fixed-rate mortgage interest rate would be with one point. Make sure the term on the loans are the same.

In regarding to trying to compare and get lenders to give competitive quotes shoot for 1% reduction in ongoing rate as well as upfront fees. So if the traditional lender is quoting 8% + 2 points aim for 7% + 1 point, remember though that no fee = higher interest rate.




*all information written is derived from gov HUD online site, book Mortgages for Dummies, book Home Buying for Dummies, book Kiplingers Buying and Selling a Home, Motely Fool website, http://www.ginnieame.gov , info on points was taken from

http://realtytimes.com/rtcpages/20060123_deductions.htm

[Deebs]

Julie -
Thanks! We are in the process of comparing rates for our next house and this really helps pull it all together.

[houseelf]

Having just gone through this process I recommend the National Association of Doctors mortgage products over Bank of America for several reasons.

Bank of Am charges you $50 to approve you, doesn't offer the no PMI program in every state, and has stricter parameters on whose name can be on the loan depending on the spouse's future job and/or student loan debt. B of Am told me that my name shouldn't be on the loan because my student loan ratio would decrease the amount of mortgage we were eligible for. They tried to spin it as "Oh, but you will still be on the deed..."

Um, I don't f***ing think so. What about my credit history, jack a**? What happens if DH dies...I have to now apply for a new mortgage without a current mortgage listed on my credit report. That's fabulous financial protection for DH's family. ARGH!

So, I went to the National Association of Doctors website which offers no PMI, both spouses' name listed on the loan, and more flexibility with the loans offered.

Call Scott Mitchell at 866-676-6999 or google the Nat. Assoc. of Doctors' website.

Hope this helps someone out there.

Kelly

Thanks Kelly, just got off the phone with Scott. Four down - more still to go...

I'm giving this info to a resident spouse in town, and thought I'd bump it up in case someone else could use it.