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Are you applying for a mortgage? Make sure you come prepared to ask the right questions, as the more you know, the better decisions you can make. Here are the top ten questions to ask your mortgage lender – jot them down or program them into your smartphone today.

Question #1: What is the interest rate on this mortgage?

Currently, the interest rates are low, but just because the lender is flashing around low rates doesn’t mean you’ll get them. You have to qualify to get the lowest rates, and a low credit score can hurt your chances. So before you take for granted that you’ll be offered a low interest rate, be sure to ask what your specific rate is.

Question #2: What are the closing costs and will I receive a good faith estimate?

Most lenders will provide you with a good faith estimate that details the chargers you will be assessed for their services, also known as closing costs. Since many lenders expect you to pay for closing costs out of pocket, make sure you know what these costs will be as soon as possible.

Question #3: Are there any potential delays that may impact my closing?

As long as you provide honest, upfront information to the lender, the process should go rather smoothly. Some of the factors that can delay the process include changing jobs, having a decrease in your salary or changing marital statuses. Be sure to let your lender know of these changes immediately if they are to occur.

Question #4: What are the qualifications for the loan?

Generally speaking, conventional loans are the most difficult to receive, but other loans have less strict criteria. Be sure to ask about the various loan options and the qualifications for each. First-time homebuyer programs for example, have incentives for new homebuyers.

Question #5: What is the down payment for this loan?

The rate and terms of your loan will be dependent on how much you put down. Most lenders ask for 5 to 20 percent of the total loan amount, and the more you put down, the lower your payments will be and the better terms you’ll have.

Question #6: Can I lock in my interest rate?

If you’re approved for a low interest rate, ask your lender about locking in the rate, but do so with caution. There may be fees to lock in through your lender, and you never know, the interest rates may go down further.

Question #7: Will I have to pay points on my loan?

Many lenders charge prepaid mortgage interest points in order to lower your interest rate. Many of these points have little to no benefit to the borrower, so be sure to ask if you’ll be paying for points and what kind of points they are.

Question #8: What documents do I need to provide?

In order to keep the process moving along smoothly, you’ll want to have the necessary documents in place. Most commonly, these documents include proof of income, bank account information, IRS Form and credit reports, but ask your lender for more specifics.

Question #9: Is there a prepayment penalty on this loan?

Prepayment penalties can kick in when you go to sell your home, reduce the principal balance by a certain amount or refinance. If there is a prepayment penalty, find out how much the penalty is and how the amount is calculated.

Question #10: How long will the process take?

Although lenders may say two weeks, it’s best to expect 45 to 60 days to have the loan application processed. If there are any obstacles or changes along the way, that will slow the process as well. It’s always better to be safe than sorry!

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The thought of finally having your own home and not having to worry about throwing your money away on rent each month can be very exciting. Of course, before you get too enamored with the idea of becoming a homeowner, you need to temper that excitement with rational thinking. The following dos and don’ts can help buyers such as you save some money and be happier in the long run.

The Dos

Credit Check-Up: Even before you start your search for your home in earnest, you need to check your own credit and pull if from the three credit bureaus. You can get the information free of charge, and it won’t damage your credit. Rather than just looking at the credit score, you need to check and see if there are any mistakes. You will also want to know check for bankruptcies, tax liens, and judgments. If you notice any problems on your report, challenge them and make sure that the corrections show up on all three bureau reports.  If you have questions about items on your credit report ask us for help as we have years of experience dealing with these sort of issues.

Pre-Qualify: Once you know that your credit is in order, you need to know how much house you are able to afford, and this means contacting a mortgage company to get pre-qualified. Just because you might be able to get a loan for a large sum of money doesn’t always mean that you are going to be able to afford the home. You need to make sure that you will still be able to have enough money left over after paying the mortgage each month so you can pay all of your other bills and still live comfortably.

Be realistic: When choosing your home, make sure that you are living within your means. You might not need to have a house as big as the one that you’ve been looking at. It might be a better move financially to choose a smaller home that fits your current needs. It will almost certainly be closer to your budget as well. When choosing a home, consider the location in regards to schools and your commute.

The Don’ts

There are a long list of “don’ts” when it comes to buying a home, but these are 2 of the most common ones we see:

Take on new debt:  Don’t buy anything large right before you buy a house unless you are paying in cash. If you buy a car and have a large car loan, it can make getting a loan for a home more difficult.

Quit your job:  While many people dream of owning their own business, wait until AFTER you buy a home to do so if you are in the market.  If you are newly self-employed, you may have to wait a few years before trying to get a mortgage loan. During those first couple years of self-employment, it can be difficult to qualify for a home loan.

If you are getting ready to purchase a home, or are trying to refinance your loan, you need to make sure that you are working with the best mortgage lender. That means finding a lender who will get you a great rate, but will also make sure that you understand the process and important paperwork involved with your new loan with the least amount of stress.

With so many changes happening in the industry and the sheer number of lenders available, it can be difficult to know if you are choosing the right one.  Here is our guide to choosing the right mortgage lender.

Tip #1:  Ask lots of questions

The best thing you can do in the beginning is ask questions. Understand what the fees are, and if you feel as though the lender is being dishonest or not answering the questions to your satisfaction, you should probably move on to a new lender.

Tip #2:  Be honest about your situation

You also need to be honest with the lender when it comes to anything that could affect your chances of getting a loan through them. It is much better to be honest with them and see if there is a way that they can help you work around the problem. As you are researching the lender, check to see what other options they have. Many lenders today have several different mortgage options and ways of helping people qualify for the loans they need.

Tip #3:  Check their rates

One of the most important things to consider choosing the right lender is the rates. Check the rates of several different companies so you will be able to find the one that offers the most competitive rates. Those who have trouble with their credit will likely find that the rates they have to pay are going to be higher, but should still be able to find a lender.

Tip #4:  Consider their experience

While experience isn’t the most important thing, it can be very important especially in today’s complex world.  Mortgage companies who have survived and prospered through the last few years should have good experience in the industry and can use that knowledge and expertise to make sure you are getting the best loan.

Tip #5:  Look for testimonials

You can check sites on the web to learn about them, or you can talk to friends and family and see if they have recommendations. If someone you know had a great and easy experience buying their house recently, ask them if they wouldn’t mind sharing the name of the lender. It can help reduce a lot of the work you would normally have to do on your search!