How to Choose a Mortgage Lender: 10 Questions to Ask

Most buyers spend weeks choosing a home and an hour choosing a lender. Yet the lender affects your rate, your closing costs and whether you close on time. These questions help you choose well.

10 questions to ask

1. What rate and points are you quoting, and what is the APR?
2. What are your lender fees, such as origination, underwriting and processing?
3. How long can I lock my rate, and what does a lock extension cost?
4. Do you offer a float-down if rates drop after I lock?
5. Which loan programs fit me, and can you compare them side by side?
6. How long does it usually take you to close?
7. Do you underwrite and make decisions in-house?
8. Who will be my main contact, and how quickly do you respond?
9. Can you issue a strong preapproval letter quickly, even on weekends?
10. What will my total cash to close be?

How to compare offers fairly

After you apply, each lender must send a Loan Estimate within three business days. It’s a standard form, so you can compare the interest rate, monthly payment, closing costs and cash to close line by line. Ask each lender for quotes on the same day, with the same loan amount and lock period.

Red flags

• Rates that are far lower than everyone else’s, with fees hidden in points.
• Slow responses before you’ve even applied.
• Pressure to sign before you’ve seen a Loan Estimate.

Frequently asked questions

Will shopping lenders hurt my credit?

Several mortgage inquiries within a short period are generally treated as one for scoring. See 6 steps to build your credit.

Should I use a bank, credit union or mortgage broker?

Any can work well. Focus on the total cost, reliability and communication rather than the type of company.