The first step we took in our house hunting is mortgage pre-approval. We needed to know how much mortgage we could get. We found our mortgage lender, Churchill Mortgage (and our awesome team member Sue F.), through a friend and booked a meeting.
We weren’t sure if we wanted to even go with this company, so it was our time to interview. Remember, you don’t have to pre-approved with the first lender you see – just make sure you don’t go through the credit check and then decide against them. That’s a check you’ll never get back!
Here are the questions we asked the mortgage lender in the first pre-approval meeting.
Questions about the broker/lending company:
- What does your company charge for fees?
- What’s a good faith estimate, and does your company provide it?
- Do you guarantee your good faith estimate?
- When do you do hard credit checks, and what’s the process?
- Have you worked with foreclosures?
- How long will you hold my pre-approval for?
Questions about mortgages:
- What does “APR” mean?
- What interest rates can we expect?
- How long will you lock those interest rates in, or will you lock them in at all?
- How does private mortgage insurance (PMI) work?
- Is there a way to not pay the mortgage insurance, or to lump it into the mortgage amount?
- Can we do lump sum payments on the mortgage balance?
- What are mortgage points, and are they a good fit for us?
- What are origination fees?
Questions about the home purchase process:
- How much will closing costs be, and who pays for them?
- How do we pay for inspections, and how much will they be?
- How do appraisals work?
- How much will an appraisal be, and who do we pay?
- Are there first-time homeowner grants available?
- How does title insurance work?
- Do you have any recommendations for home insurance providers?
- How do property taxes work, can we pay them monthly, and where do we pay them?
- Do we have to pre-pay for any services before we move into a house?
Here’s what we found out during the meeting that we think is important.
Ask how much: The biggest question we asked at the end of the meeting was “How much are we going to pay out of pocket when we close on this house?” The answer (if the seller pays the closing costs), was about $1000 for all inspections and appraisals.
It’s fine to say “I have no idea what that means”: The best thing we did in that meeting was to clarify, clarify, clarify. People in this business have been doing it a long time, and use acronyms and lingo we didn’t understand. So we were okay to interrupt and say “We don’t know what that means.” A good lender will answer everything clearly.
Avoid the pressure and take a beat: They wanted us to sign on the spot and get started. So we just took five minutes in the hallway of the office to talk about whether we were okay with these lenders and if we were fine with the credit check. We signed once we’d both agreed we were comfortable.
After the pre-approval meeting, we decided to go with this lender. Take a look at this post to see what we had to provide to the lender once we decided to get officially pre-approved, and how the whole process worked.