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tom lysik 224.800.4731

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Applying for a mortgage

If you haven’t applied for a mortgage yet while searching for a home it is now time after you sign the purchase contract to meet with the lender and apply for it. It would be prudent to shop for the best lender before you sign the purchase agreement so you don’t have to rush at the last moment to pick out just any lender which may cost you more. When selecting a lender ask as many questions as needed to get clear understanding of what documents you need to prepare and what you will be getting from that lender. The following are some of the questions you should be asking your lender:
1. What will be the interest rate on the mortgage they are offering you?
You need to know the rate to know the exact amount you will be paying over the term of the loan.
2. How much is the application fee?
This is the cost to process your application. Usually the lender will charge you this fee when they take your application. Generally lenders do not refund this fee if your mortgage is not approved or you decide not to take it.
3. How much do I have to pay for the appraisal?
The lender will have to order an appraisal from an independent appraising company on the house you want to purchase. The bank requires the estimate of the market value of the house you want to buy to determine if its estimated value will support the selling price. Buyers are entitled to get a copy of the appraisal.
4. Is there any prepayment penalty on the loan?
Each lender is different and they have different programs. If you want to pay off your mortgage earlier there may be a prepayment penalty for doing it. You would like to know if they will charge you the prepayment penalty and how much.
5. Are there any discount or origination points I have to pay?
To lower your interest rate lenders may charge you prepaid mortgage interest points. Find out how many they will charge you and get a clear understanding if it is beneficial for you to do it.
6. Is there any cost for locking the interest rate and when can I lock it?
Interest rates fluctuate and to prevent them from going up; after you apply for a mortgage you may want to lock in the rate. Check with your lender when you can do it and if they’ll charge you for locking in the rate.
7. What will be my closing costs?
There are other fees associated with the mortgage for various services provided by the lender and other parties involved in the transaction.
8. Do you provide a good faith estimate of all the costs up front?
You want to know as early as possible what those fees will be. Lenders should provide to an applicant a written good faith estimate of closing costs within few days after receiving a loan application. It is advisable to avoid using a lender or a broker who is unwilling to do so.
9. What is the minimum down payment I have to put for my loan?
Different programs require different down payments. Check with your lender how much is the minimum you have to put down to avoid (PMI) private mortgage insurance.
10. What is the time frame to process my loan?
You need this information to determine how long to lock in your rate and to coordinate it with the dates on your purchase contract you signed with the seller.
11. Is there anything that may delay the approval of my loan?
Providing the lender with complete and accurate information will help the loan process to run smoothly. Delays may occur if the underwriter finds credit problems. Make sure you will notify your lender of all changes between the time you submit a loan application and the time the loan is funded: changing a job, your income increase or decrease, or if your marital status has changed.


After you apply for a loan with the lender, your loan officer will start verifying all the information you provided and will then process your loan. The approval process takes on an average of three to five weeks depending on the lender. It is a good practice to follow up with your loan officer periodically to check the status of the loan and if there are any additional documents needed from you.