When you’re buying a home for sale in Midland, there’s a pretty good chance you’re going to need a mortgage lender – but if you’re like many people, you may only talk to one or two. That can be a huge mistake! You should talk to a minimum of three mortgage lenders before you make a decision on which to borrow from… and you should ask each of them the ten questions in this guide before you commit.

10 Questions to Ask Every Mortgage Lender You Talk To

You’re under no obligation to work with any mortgage lender, even if their representatives make you feel like you are. You should talk to at least three lenders and ask each of them these ten questions:

  1. How much home can I afford?
  2. How should I use the money I’ve saved for my down payment?
  3. What kind of interest rate do I qualify for?
  4. What mortgage would you suggest for me?
  5. Do you know of any down payment assistance programs that could help me?
  6. Do you offer points to lower my interest rate?
  7. What do you need from me to process my loan?
  8. How long will my loan take to close?
  9. What lender fees will I be responsible for?
  10. How much will my monthly mortgage payments be?

Here’s a closer look at each.

Question #1 to Ask a Mortgage Lender: How Much Home Can I Afford?

Lenders should ask you several questions, including how much money you make and what your credit score looks like, before they tell you how much you’ll likely qualify to borrow.

Pro Tip: You don’t have to use all the money a lender offers you. There’s nothing wrong with buying a house that costs less than your max mortgage amount. In fact, doing so can save you a ton of money over time.

Question #2 to Ask a Mortgage Lender: How Should I Use My Down Payment Money?

In some cases, it makes more sense to use some of the money you’ve saved for a down payment in other ways. For example, if you have high-interest credit card debt, a good mortgage lender may tell you to pay down that debt and come into the lending process with a lower down payment. You want a lender that’s looking out for your best interests, even if it means redirecting the money you’ve saved.

Question #3 to Ask a Mortgage Lender: What Interest Rate Do I Qualify For?

Your lender will need a good look at your financial picture before telling you what interest rate you qualify for. Generally, lower interest rates are better; they mean your mortgage payment will be lower each month.

Question #4 to Ask a Mortgage Lender: What Mortgage Do You Suggest for Me?

Lenders should have a good idea – at least after talking to you about your situation and goals – what type of loan product is right for you. For example, your lender may suggest that you use a VA loan if you’re an honorably discharged veteran of the U.S. Armed Forces, or a USDA loan if you’re interested in buying a farm on the more rural outskirts of Midland.

Question #5 to Ask a Mortgage Lender: Are There Down Payment Assistance Programs for Me?

Loan officers often know about down payment assistance programs available to buyers (particularly first-time buyers and those who haven’t owned a home in quite some time). You should ask whether there are any programs available to you based on your situation; every little bit helps (and lowers your monthly payments in the future).

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Question #6 to Ask a Mortgage Lender: Do You Offer Points?

Many lenders offer their borrowers the chance to pay for points. Points are fees that lower your interest rate. Generally, one point is equal to 1 percent of the loan. For example, if you’re borrowing $200,000, one point will cost you $2,000. You pay these fees up-front in exchange for a lower interest rate. Your lender may say something like, “If you pay one point, your interest rate will go down from 3.9 percent to 3.7 percent.” That means you have to give the lender $2,000 at closing in exchange for that 3.7 interest rate.

Question #7 to Ask a Mortgage Lender: What Do You Need From Me to Process My Loan?

Lenders know exactly what documents they need from you to process a loan. Most will ask for things like tax statements and pay stubs, bank statements and other documents. Some lenders need more information than others do.

Question #8 to Ask a Mortgage Lender: How Long Will My Loan Take to Close?

Every lender is different, but it generally takes between 30 and 60 days to close on a house (though some close much faster than that – and others take much longer). You need to know how long yours is likely to take so you can plan your next move.

Question #9 to Ask a Mortgage Lender: What Lender Fees Will I Have to Pay?

Lender fees can add up quickly, and they include things like loan origination and broker fees. You should ask each lender you talk to how much you’re expected to pay – especially considering that lender fees can total as much as 3 percent of your total loan amount.

Question #10 to Ask a Mortgage Lender: How Much Will My Monthly Mortgage Payments Be?

You definitely need to know how much your monthly mortgage payments will be – they’re going to make a major impact on your budget. Lenders have the tools on-hand to figure out just how much people will have to pay after borrowing from them.

Are You Buying or Selling a Home in Midland, Texas?

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