Most buyers want to shop around for the right lender, which usually means the one that offers the lowest interest rate. Other than rate, payment, and closing costs, a buyer doesn’t normally ask any more questions. While these are important questions, and the answers can make all the difference; make sure to ask these four additional questions of every lender before deciding:
1. What percentage of buyers that you pre-approve actually close on a loan?
2. What percentage of your loans close on time (without extension)?
3. On average, how much time does your team need to close a loan? (30 days, 45 days, etc.)
4. What type of down payment assistance programs do you offer?
The answer to the first question lets you know whether the lender does most of their due diligence upfront and how much importance you can place on their pre-approval letter. In this current environment, many lenders will underwrite your file upfront, which makes your pre-approval letter much stronger for a seller.
The second question lets you know that their lending process is like a well-oiled machine, and deadlines are held in high regard. Sellers are not obligated to extend your contract if you are unable to close on time. More often, they will extend, but you don’t want to be in the position to ask if you don’t have to.
The third question will serve you well when competing with other buyers for a home if your lender can close in 30 days or less.
Finally, if you need assistance with your down payment, there may be programs available, but many depend on a host of different criteria. Also, different lenders offer different programs, so make sure to ask upfront.
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