Carol Lollich, Broker-Owner

E-mail:  homes@lollich.com
Call Toll Free:  (888) 412-0172  24 Hours a Day

Shopping for a Loan

To help you find the loan (and the lender) who best meets your individual needs, you might want to ask each lender you interview the following questions:

• What is the average number of days it takes for the lender to issue a firm loan approval?
• For how long a period will the lender "lock in" the rate they quote you?
• If you are locked-in, and rates go up, what is the lender's policy if the rate lock expires?
• Does the lender have a program that allows you to lock the rate, and have the option to "float down" if rates go down? 
• What fees are associated with the loan?
• Does the quote include discount and origination costs?
• Can you be "pre-approved" prior to purchasing a property?  Is there a fee for this service?  "Pre-Approval" puts you are in a much stronger negotiating position (especially in a multiple-offer situation), if you can tell the Seller that you have already been approved for the loan, subject only to the appraisal .
• Does the lender close at least 100 loans a year?  How long have they been in business?  This information can give you an indication of how smoothly the loan process and escrow period will be, and if the lender will be able to successfully close your deal.
• Can the lender provide you with at least three references you can contact?
• Are you required to carry life or disability insurance?  Must you obtain it from a particular company?
• Is private mortgage insurance required? (This is sometimes required by lenders on low-downpayment loans to protect the lender in case you default on your loan)
• Is there a late payment charge?  How much?  How late may your payment be before the charge is imposed?
• Is there a pre-payment penalty if you decide to pay off your loan early?  How much?  If so, for long long a period does the pre-payment penalty apply.  (Most loans that have pre-payment penalty clauses allow you to pay up to 20% of the mortage each year for the first 5 years).
• Can the loan be assumed?  Will the lender release you from personal liability if your loan is assumed by the new buyer when you sell your home?  
• If you sell your home and the buyer assumes the loan, will the lender have a right to charge an assumption fee, raise the rate of interest, or require payment in full of the mortgage?
• If you have a financial emergency, will the terms of the loan include a future advances clause, permitting you to borrow additional money on the mortgage after you have paid off part of the original loan?
• Will you be required to pay money into a special reserve (escrow or impound) account to cover taxes, hazard insurance, or other charges?  If so, how large a deposit will be required?