Questions to Ask Your Lender

When shopping around for a loan:

• What is your best interest rate today? What are the total loan fees?
• Is this rate fixed or adjustable? (A fixed interest rate stays the same for the life of the loan, while an adjustable rate changes.)
• What is the total monthly payment, including taxes and insurance?
• What is the term (length) of the loan?
• Is there an application deposit? What is it, and how much is refundable?

When you apply for your loan:

• Do you charge overages? (An overage is a fee hike designed to give more profit to the lender.)
• If I lock in my interest rate today, what is the best rate available? What are the fees?
• What is the annual percentage rate (APR)?
• Is there a balloon payment due on the loan?
• Are there any pre-payment penalties? What are they and for how many years are they in effect?
• Does the interest rate increase if my payments are late?
• What is the total monthly payment, including taxes and insurance?

If the loan is an Adjustable Rate Mortgage (ARM), be sure to ask:

• What is the initial rate? How long will that rate stay in effect?
• How often can the rate change?
• What are the rate and payment caps (limits) each year, as well as over the life of the loan?
• Can I convert (change) my adjustable rate loan to a fixed rate without doing a new loan?
• Is there a prepayment penalty? If so, how long does it apply?
• Did your lender give you your Good Faith Estimate?
• Insist that you get a copy of this document within 3 days of your loan application!