1. How are interest rates behaving and why are they behaving that way?
A good loan originator studies the market and market movements. They know when to lock-in your interest rate to save you the most money. The interest rate on the day you call or the day you sign a purchase contract is largely irrelevant. Your loan officer should watch the market closely to determine when to lock-in your interest rate to get you the most favorable terms - whether that's today, tomorrow, or two weeks from now.
2. What are the points and lender fees associated with this product and rate?
When comparing closing costs between different lenders, points and lender fees are the most important charges to compare. Every other fee you are charged should be consistent from lender to lender. Although the initial estimates may be different, the charges should be the same at closing.
Points are paid to buy a lower interest rate (one point = 1% of your loan amount). Other charges that are paid directly to your mortgage lender or broker include application, underwriting and processing fees.
3. What percentage of loans that you originate close on time?
It doesn't matter what a lender promises if they can't close on time. If a transaction doesn't close within the time frame outlined on the purchase contract, you could lose your house! A good loan originator should be able to verify how often loans close on time.
4. What percentage of loans that you submit to underwriting are declined?
I'm going to be really candid. There are a lot of loan officers who have no idea what they're doing. As a mortgage loan processor, I frequently saw loan officers with 20 years in the industry who didn't know how to correctly calculate self-employed income using a borrower's tax returns. I had loan officers who took a loan application, collected a random assortment of paperwork, and turned the file into processing to figure out whether or not the borrower qualified.
As a loan officer, I’m often told by potential customers that another lender told them they couldn't use rental income to help them qualify, they couldn't use retirement income to qualify, they couldn't have two FHA loans at once, they couldn't get a VA loan with a co-borrower to whom they weren't married, and they couldn't qualify for a mortgage if their sole income was from an investment account or trust fund. For the record, all of those things are incorrect.
Mortgage lending guidelines are extremely complex. Please choose a loan officer who is knowledgeable and has a proven track record of success.
5. Can you provide the names of three buyers who have used you in the last 30 days that I can contact?
What do a loan officer's customers say about doing business with them and the lender for whom they work? Would they refer their friends and family? Does the loan officer have a robust library of online reviews? Check sites like: