Overwhelmed by money (or the lack thereof)!

March 14, 2007 2:18 PM

What questions do I ask when trying to get a mortgage?

I'm calling mortgage lenders, brokers, and banks tomorrow because I'm getting ready to take the big plunge and buy a ridiculously overpriced condo in DC. I understand the lending process, and some of the fees involved (thank you, Homebuying for Dummies!). I have a rough idea of what I can afford (I think), so now I guess I need to get pre-approved for a loan. So I'm wondering...

What do I say when I call one of these guys? How do I introduce myself and what questions should I be asking? What questions should I expect? I'm overwhelmed by this whole process, nervous because I don't like talking to strangers on the phone, and am scared to death I'll get screwed over.

Help, mefites, help!

posted by echo0720 to home & garden (10 comments total)

Be sure to check out E-Loan. I've used them in the past and have been 100% satisfied, both with the service and the unbeatable rates.

The EL process is all online, so there's not much worry about asking the right questions.
posted by unixrat at 2:37 PM on March 14, 2007

There are a multitude of questions here, but I will point you in the direction of using an Upfront Mortgage Broker. You can read all about them here. I recently bought a house and the Broker got me a lower price than E-loan or Amerisave (which are the two best online lenders in my opinion).
posted by bove at 2:52 PM on March 14, 2007

why do you worry about how to introduce yourself and what questions to ask them?

Hi my name is equo and I am looking to buy a condo and would like to find out what mortgage you have to offer to help me do this...don't make it more complicated than it has to be!

assuming you know what kind of mortgage you want (capital repayment, interest only, fixed rate etc) you could specify that and which leaves the following:

- how much money will you give me
- what conditions (valuation etc)
- what fees will i have to pay
- what interest rate will you charge me
- what will my monthly repayments be
- if it is fixed rate - what kind of early repayment penalties do apply and can i overpay x% monthly if can afford to...

am also just in the process of buying my first property and it was surprisingly easy to get my mortgage pre-approved on the phone and then a full mortgage offer once my offer on the property was accepted. in fact i had a really nice chat with one woman i spoke to...no need to worry!
posted by koahiatamadl at 2:53 PM on March 14, 2007

Ask your friends or colleagues to recommend a real estate agent - they can talk you through the basics so you're more prepared to go to a mortgage broker.

And, like koah.... said, no need to worry. It seems insanely complex, but really, despite the ream of paperwork, it all works out pretty easily.
posted by M.C. Lo-Carb! at 3:35 PM on March 14, 2007

I'm buying a house as well. Here are some tips:

- know your credit score. then you don't have to have a bunch of credit checks. You can just tell them your credit score and then if you decide to go with that company, have them check your credit.
- ask what the interest rate is and the apr.
- ask what the closing costs are. see if they will get you a good faith estimate or have them break the costs down.

I found when looking for mortgages, the main difference really was in closing costs. I have excellent credit, so I was getting very similiar interest rate quotes.

Do you know what kind of mortage you want? (30 year fixed?, FHA mortgage ?) This is helpful in terms of trying to compare apples to apples. Also, how you are putting down makes a difference as well.
posted by hazyspring at 4:21 PM on March 14, 2007

Ask if there are any hidden fees (they might lie anyway). It's easy to show up for a closing and get slapped with thousands in unexpected taxes, fees, charges, etc. Oddly, the worst example of that for us was when we bought a house in New York, where you're required to use a real estate lawyer. They wanted a $3,000 cashiers' check on the spot in addition to the money we knew about and were prepared to pay. Every other time was +/- $250.
posted by clarkstonian at 4:43 PM on March 14, 2007

Keep in mind that getting pre-approved is generally a really quick and easy process. It should cost you nothing but a little time, and it doesn't mean you're obligated to actually get a loan with that lender (or broker or whoever). You'll have plenty of time to worry about the actual mortgage later; for now you're just dipping your toe into the water.
posted by xil at 5:48 PM on March 14, 2007

My experience when I first started looking for loans was that I called one lender, who took all my info and then called me back to say "Congratulations, you're approved for $X." And that was it.

The second lender I called took my info, and then sent me sample loan paperwork showing my maximum loan amount, and how that worked out with closing costs, taxes, average property tax in the area, insurance, and exactly what my monthly payment would be. That was immensely more helpful than just getting a number.

If the lender you talk to is like the first example, then you should look for a different lender. They should explain everything to you without you having to ask them to. You should shop around; you can have your credit report pulled multiple times within 45 days and it will only count as one inquiry in your FICO score.

Unfortunately, there are tons of people who get mortgages without even trying to understand the details of what they are agreeing to, and some unscrupulous lenders will take advantage of them. You just need to make it clear from the start that you are not one of those people.

If it would be easier to talk to someone in person rather than on the phone, many bank branches have mortgage officers on staff. Also, if you don't already have a realtor in DC, I can recommend one.
posted by clarissajoy at 6:06 PM on March 14, 2007

I just bought a house in September. Like you, I was a paranoid freak when it came to mortgage lenders and was determined not to get fucked. I read homebuying for dummies, which was helpful, but by far the most useful resource I found was the mortgage professor. Just read his articles, especially the ones on closing costs. I ended up going with Amerisave, which worked out really well. There were no hidden anything, and the people were very helpful. Uh, ok, I don't want to sound like a shill, but you should check it out. At least check out the professor's site, which helped me understand the concepts behind different lending costs, etc.
posted by chinston at 6:32 PM on March 14, 2007 [1 favorite]

Oops, I didn't realize that bove had already mentioned this. Uh, what he/she said. E-loan and Amerisave were the best lenders I found, and Amerisave consistently beat E-loan for what I wanted (a boring 30-year fixed).
posted by chinston at 6:34 PM on March 14, 2007