Two lenders. Same loan amount. Same credit score. One costs you $23,000 more over 30 years. That’s not a hypothetical. It’s what happens when you don’t ask the right questions to ask a mortgage lender before filling out an application.
Here’s what kills me: people will spend three hours reading Amazon reviews for a $40 coffee maker, then sign a $350,000 mortgage after one conversation. The lender isn’t going to flag their own high fees for you. That’s your job.
These 21 questions are organized into five sections that cover everything from loan types to long-term flexibility. Print the checklist at the bottom, bring it to every lender meeting, and fill in the answers side by side. You’ll spot the differences fast.
Before You Meet with a Lender
A little prep work before your first meeting saves you from wasting time (yours and theirs) and puts you in a much stronger position from the start.
- Check your credit score and review your credit report. Pull your free reports at AnnualCreditReport.com and dispute any errors before a lender runs their own check. You want to know your number before they tell you.
- Calculate your debt-to-income ratio. Add up all monthly debt payments (car loans, student loans, credit cards) and divide by your gross monthly income. Most lenders want this below 43%, and below 36% gets you better terms.
- Determine your down payment range. Know how much cash you can realistically put down (3%, 5%, 10%, 20%) because it affects which loan programs you qualify for and whether you’ll pay PMI.
- Research current mortgage rates. Spend 10 minutes checking Freddie Mac’s weekly rate survey or Bankrate so you have a baseline. If a lender quotes you a rate that’s 0.5% above the market average, you’ll know to push back.
- Write down your questions in advance. Bring this checklist, but also jot down anything specific to your situation: self-employment income, a recent job change, gift funds for the down payment. The more specific you are, the more useful the conversation becomes.
Loan Types and Eligibility Questions
1. What types of mortgage loans do you offer?
Not every lender offers every loan type, and this matters more than most people realize. Conventional, FHA, VA, and USDA loans each have wildly different down payment requirements, credit score thresholds, and mortgage insurance rules. If your lender only does conventional loans, you could miss an FHA option requiring just 3.5% down, or a VA loan with zero down.
Ask this first. If they only offer one or two products, you’re talking to a salesperson, not an advisor.
2. Which loan program do you recommend for my situation, and why?
This is where you separate the good lenders from the order-takers. A solid loan officer will ask about your credit score, income, debts, savings, and whether you’re a first-time buyer or veteran before recommending anything.
Someone with a 620 credit score and thin savings? FHA is probably the play. A veteran? VA loans should be the first conversation, full stop. A buyer in a rural county might qualify for USDA with no down payment at all.
Tip: If the lender recommends a product before asking you a single question about your finances, that’s your cue to leave.
3. What minimum credit score do you require for each loan type?
Minimums vary by lender, even within the same program. FHA technically allows scores as low as 500, but most lenders won’t touch anything below 580 or 620. Knowing their cutoffs before you apply saves you from a hard credit inquiry that dings your score with nothing to show for it.
Ask for the numbers: conventional (often 620-640), FHA (typically 580-620), VA (most lenders want 620+ even though there’s no official minimum). And ask what score tier gets you their best rates, since there’s usually a meaningful break at 740.
4. Do you offer any first-time homebuyer programs or down payment assistance?
Many lenders participate in state and local programs offering grants, forgivable loans, or reduced rates for first-time buyers. We’re talking $5,000 to $15,000 in free or low-cost money that reduces your cash at closing.
The catch? Lenders don’t always mention these unless you ask directly. A knowledgeable lender should rattle off at least one or two programs tied to your state or county. If they draw a blank, consider a lender who specializes in first-time buyers.
Interest Rates and Mortgage Costs
5. What is the current interest rate for the loan program I’m considering?
On a $350,000 loan, the difference between 6.5% and 7.0% is roughly $125 per month. Over 30 years, that’s about $45,000. So yeah, this number matters.
Get a specific rate tied to a specific loan program, term, and credit score range. Rates change daily, so ask what the rate is today for someone with your profile. Be skeptical of any rate quoted without the lender first asking about your credit and down payment.
6. What is the APR, and how does it differ from the interest rate?
Honestly, if your lender can’t clearly explain the difference between rate and APR, find a different lender.
The annual percentage rate rolls in your interest rate plus lender fees, points, and other costs into one number. It’s the true cost of the loan. Lender A might offer a lower interest rate than Lender B but charge higher fees, making their APR actually worse. Always compare APR to APR, never just rate to rate.
If the gap between the interest rate and APR is more than 0.25%, that means significant upfront fees are baked in. Ask for a line-by-line breakdown.
7. Are you quoting me a rate with or without discount points?
Discount points are upfront fees that buy down your rate. One point costs 1% of your loan amount (so $3,000 on a $300,000 loan) and typically shaves about 0.25% off your rate. A lender can make their rate look incredible because you’re prepaying for it.
Without asking this question, you literally can’t make a fair comparison between lenders.
Get quotes both ways: with and without points. Then divide the point cost by your monthly savings to find your break-even timeline. Planning to stay 7-10+ years? Points might make sense. Moving in 3-5 years? Skip them.
8. How long can you lock in this rate, and what does a rate lock cost?
A rate lock freezes your quoted rate for a set period (usually 30, 45, or 60 days) while your loan is processed. If rates jump during that window, you’re protected.
Here’s what to nail down:
- Is the lock free? (It should be, for at least 30-45 days.)
- What happens if closing gets delayed past the lock period?
- Is it a “float down” lock that lets you benefit if rates drop?
- What’s the extension fee? (Typically 0.125% to 0.375% of the loan amount.)
9. What fees do you charge, and can I see a full Loan Estimate?
Lender fees stack up fast: origination fees, application fees, underwriting fees, processing fees. Expect $2,000 to $5,000 or more before third-party costs enter the picture.
Federal law requires a standardized Loan Estimate within three business days of your application, but you should ask about fees before applying. Pay close attention to the origination fee (usually 0.5% to 1.0% of the loan). Watch for vague line items like “administrative fee” that duplicate other charges. A trustworthy lender walks you through each line without getting defensive.
Monthly Payments and Mortgage Insurance
10. What will my total monthly payment be, including taxes, insurance, and PMI?
This is the question that prevents sticker shock on day one.
Your monthly mortgage payment isn’t just principal and interest. It includes property taxes, homeowners insurance, and possibly private mortgage insurance. First-time buyers routinely focus on the P&I number and then get blindsided when the actual payment is $400 to $800 higher.
Demand a full PITI breakdown: principal, interest, taxes, and insurance. If the lender only quotes principal and interest, push for the complete number. That’s the one your bank account actually feels.
11. Will I need to pay private mortgage insurance (PMI), and how much?
PMI protects the lender (not you) if you default on a conventional loan with less than 20% down. It typically runs 0.5% to 1.5% of your loan amount annually. On a $300,000 loan, that’s $125 to $375 tacked onto your monthly payment.
Here’s the critical distinction most buyers don’t learn until it’s too late: conventional loan PMI drops off automatically at 22% equity. FHA mortgage insurance premiums (MIP) last the entire life of the loan if you put less than 10% down. That difference alone could push you toward one loan type over another.
12. What will my estimated closing costs be?
Closing costs typically run 2% to 5% of the loan amount. On a $300,000 loan: $6,000 to $15,000, due at the closing table.
That covers lender fees, title insurance, appraisal fees, prepaid taxes, prepaid insurance, and recording fees. Ask for a detailed estimate broken into lender fees versus third-party fees. And ask whether any costs can be rolled into the loan or covered by the seller. “No closing cost” options exist but usually come with a higher rate, because the money has to come from somewhere.
13. Do you require an escrow account for taxes and insurance?
Most lenders collect property taxes and insurance as part of your monthly payment, then pay those bills for you through an escrow account. Some let you opt out with 20%+ equity, though they may charge a fee for that privilege.
If escrow is required, ask how the initial deposit is calculated. Lenders typically collect two to three months of taxes and insurance at closing, which adds to your upfront costs.
Application and Mortgage Approval Process
14. What documents will I need to provide?
Gathering documents is one of the most annoying parts of the mortgage process, but missing paperwork is one of the top reasons closings get delayed. Ask for the full list upfront and get ahead of it.
Standard requirements: two years of tax returns, two years of W-2s, 30 days of pay stubs, 60 days of bank statements, government ID, and a list of your debts and assets. Self-employed? Add profit-and-loss statements, 1099s, and possibly more. A well-organized lender hands you this list before you even ask.
15. How long does your approval process typically take?
The average mortgage closes in 30 to 45 days, but some lenders are slower. If you’re under a tight contract deadline, a 60-day lender could cost you the deal.
Ask for a specific timeline with milestones: application, processing, underwriting, conditional approval, clear to close, closing. Lenders who can consistently close in 30 days or less generally run a tighter operation.
16. Will a single loan officer handle my file from start to finish?
Getting bounced between four different people is how things fall through the cracks. You want one dedicated point of contact who knows your file.
Get their direct phone number and email. Ask about response time. A good loan officer returns calls or emails within 24 hours, ideally the same business day.
17. Do you sell or transfer mortgage loans after closing?
Most lenders sell your mortgage to a servicer after closing. Your payments go to a completely different company than the one you shook hands with. Your loan terms don’t change, but customer service quality might, for the next 15 to 30 years.
This is normal. What matters is whether they keep the servicing rights. Credit unions and community banks are more likely to service their own loans. Ask plainly: “Will I be making payments to you or to someone else after closing?”
Prepayment, Flexibility, and Long-Term Loan Terms
18. Is there a prepayment penalty on this loan?
You want a clear “no.” Most conventional and government-backed loans don’t carry prepayment penalties in 2026, but some non-bank lenders still sneak them in. A prepayment penalty charges you for paying off your mortgage early, whether by refinancing, selling, or making extra payments.
If the answer isn’t “no,” ask for specifics: how long does the penalty last, how much is it, and does it apply to partial prepayments or only full payoffs? In almost every case, avoid loans with prepayment penalties.
19. Can I make extra payments toward the principal without fees?
Adding just $100 per month to a $300,000, 30-year loan at 6.5% saves you over $45,000 in interest and cuts roughly 5 years off the loan. That’s the power of extra principal payments.
Confirm that extra payments go directly to principal reduction, not toward future payments. Some lenders require you to specifically label it a “principal-only” payment, so find out the process. Also ask whether you can make one-time lump sum payments in addition to regular extras.
20. What happens if I have trouble making payments in the future?
Nobody plans for job loss or a medical emergency, but they happen. Knowing your lender’s hardship options before you need them matters.
Look for specific programs: forbearance (temporarily pausing or reducing payments), loan modification (permanently changing terms), and repayment plans. Lenders with dedicated loss mitigation teams tend to be more borrower-friendly when things get tough. Ask how quickly they respond to hardship requests.
21. What would refinancing look like if rates drop significantly?
If rates fall after you close, refinancing can lower your payment or help you build equity faster. But refinancing carries its own closing costs, typically $3,000 to $6,000.
Ask whether the lender offers a streamline refinance option with less paperwork and lower costs. Some lenders reduce or waive fees for existing customers who refi with them. The general rule of thumb: refinancing makes sense if you can drop your rate by at least 0.5% to 0.75% and you’ll stay long enough to recoup the closing costs.
Quick Reference Checklist
Use this checklist when meeting with mortgage lenders. Bring it to every conversation and fill in the answers for side-by-side comparison.
Loan Types and Eligibility
- What loan types do you offer (conventional, FHA, VA, USDA)?
- Which loan program do you recommend for my situation?
- What are your minimum credit score requirements per loan type?
- Do you offer first-time buyer programs or down payment assistance?
Interest Rates and Costs
- What is the current interest rate for my loan program?
- What is the APR, and what fees are included in it?
- Is this rate quoted with or without discount points?
- How long can you lock the rate, and is there a cost?
- What are all your fees? Can I see a full Loan Estimate?
Monthly Payments and Insurance
- What is my total monthly PITI payment?
- Will I pay PMI, how much, and when does it end?
- What are my estimated closing costs?
- Is an escrow account required?
Application and Approval Process
- What documents do I need for my application?
- How long does your process take from application to closing?
- Will one loan officer handle my file throughout?
- Do you sell or transfer loans after closing?
Prepayment, Flexibility, and Long-Term Terms
- Is there a prepayment penalty?
- Can I make extra principal payments without fees?
- What hardship options do you offer if I struggle to pay?
- What does refinancing look like if rates drop?
What to Bring or Send Ahead
Having your documents ready before the first meeting speeds things up and signals to the lender that you’re a serious, organized borrower. Here’s what to gather:
- Two most recent pay stubs: showing year-to-date earnings.
- Two years of W-2s or 1099s: both pages, for all employers.
- Two years of federal tax returns: all schedules included. Self-employed borrowers should also bring profit-and-loss statements.
- 60 days of bank and investment account statements: every page, even the blank ones. Lenders look for large deposits that need sourcing.
- A government-issued photo ID: driver’s license or passport.
- A list of monthly debts: car loans, student loans, credit cards, child support. Include the creditor name, balance, and monthly payment.
- Your pre-printed checklist of questions: this one. Fill in answers as you go so you can compare lenders side by side. A financial calculator can help you verify the lender’s math on the spot.
- Gift letter (if applicable): if any part of your down payment is a gift from family, the lender will need a signed letter stating the funds are a gift, not a loan.
Typical Cost Range and Factors
Mortgage costs vary widely depending on your loan type, location, credit score, and the lender. Here’s a realistic breakdown so you’re not blindsided.
Closing Costs: Expect 2% to 5% of the loan amount. On a $350,000 loan, that’s $7,000 to $17,500. This includes lender fees, title insurance, appraisal, prepaid taxes and insurance, and recording fees.
Origination Fee: Typically 0.5% to 1.0% of the loan amount ($1,750 to $3,500 on a $350,000 loan). Some lenders charge flat fees instead. A few charge nothing but make up for it with a slightly higher rate.
Appraisal Fee: $350 to $600 for a standard single-family home, though complex properties or rural areas can push this to $800+.
Interest Rates (as of early 2026): 30-year fixed conventional loans are running roughly 6.0% to 7.0%, depending on credit score, down payment, and market conditions. FHA rates tend to be 0.25% to 0.5% lower, and VA rates are often the lowest available.
Discount Points: One point costs 1% of the loan and typically reduces your rate by about 0.25%. Whether points make sense depends on how long you’ll keep the loan.
Private Mortgage Insurance (PMI): 0.5% to 1.5% of the loan annually for conventional loans with less than 20% down. On a $300,000 loan, that’s $125 to $375 per month.
Rate Lock Extension Fees: 0.125% to 0.375% of the loan amount if your lock expires and you need more time.
Title Insurance: $1,000 to $3,500 depending on the loan amount and your state. Some states have regulated rates; others don’t.
The biggest factor in your total cost? Your credit score. A borrower with a 760 score versus a 660 score can see rate differences of 0.5% to 1.0%, translating to tens of thousands of dollars over the life of the loan. That’s why checking and improving your score before you apply isn’t just advice. It’s math.
Red Flags vs. Green Flags
| Red Flag | Green Flag |
|---|---|
| They won’t give you a Loan Estimate. Federal law requires one within three business days of application. Reluctance to put numbers in writing before that? They’re hiding fees. | They provide a detailed fee breakdown upfront, even before you formally apply, and walk you through each line without being asked. |
| The rate looks too good to be true. It probably is. An unusually low rate almost always means high points or fees are attached. Compare APR, not base rate. | They quote you both the interest rate and APR without being asked, and clearly explain what’s included in each number. |
| ”This rate expires today.” No, it doesn’t. Legitimate rate locks last at least 30 days. High-pressure urgency is a dealership tactic, not something a mortgage professional should be doing. | They give you time to compare. A confident lender says, “Get quotes from other lenders and come back to me. I’m happy to compete on the numbers.” |
| Fees jump between the initial quote and the Loan Estimate. Small third-party variations are normal. Significant lender fee increases are a bait-and-switch. | The Loan Estimate closely matches the initial quote. Consistency between what they say and what they put in writing is a basic trust indicator. |
| They tell you not to shop around. A confident lender welcomes comparison. If they discourage it, they know their offer won’t hold up. | They encourage you to compare and offer to match a competitor’s terms if you find a better deal. |
| No direct point of contact. If you can’t get a direct phone number for a specific loan officer, communication during the 30-45 day process will be a nightmare. | One dedicated loan officer handles your file from application to closing, gives you their direct line, and responds within 24 hours. |
| They dodge the PMI question. If you’re putting less than 20% down, your lender should proactively explain when and how PMI drops off. Avoidance on this topic means you could pay unnecessary insurance for years. | They proactively explain PMI: how much it costs, when it drops off, and how your loan type affects the timeline. No dodging, no vague answers. |
Money-Saving Tips
- Get quotes from at least three to five lenders. The CFPB found that borrowers who compare just five quotes save an average of $3,000 over the life of the loan. Mix in a bank, a credit union, and an online lender, since each type tends to beat the others in different areas.
- Negotiate the origination fee. This is the one lender fee with the most room for negotiation. If Lender A charges 1.0% and Lender B charges 0.5%, tell Lender A. Many will match or split the difference to keep your business.
- Ask about lender credits. Some lenders offer credits that offset closing costs in exchange for a slightly higher rate. If you’re cash-strapped at closing, this trade-off can make sense. Just run the math on total cost over your expected time in the home.
- Time your rate lock carefully. If rates are trending downward, waiting a week or two to lock could save you money. If they’re climbing, lock immediately. Either way, always ask about float-down options.
- Request a seller concession. In many markets, sellers will agree to cover 2-3% of closing costs. Your agent can negotiate this into the purchase contract. It’s not free money (it typically means paying a slightly higher price), but it reduces the cash you need at the table.
- Don’t pay for things you don’t need. Lender-required title insurance is non-negotiable, but owner’s title insurance is optional in many states. Same goes for certain add-on fees. Ask which fees are required and which are optional before signing.
- Improve your credit score before applying. Even a 20-point improvement can move you into a better rate tier. Pay down credit card balances below 30% of your limit, don’t open new accounts, and dispute any errors on your report. A few months of discipline can save you tens of thousands over 30 years.
Glossary
APR (Annual Percentage Rate): The total yearly cost of your mortgage expressed as a percentage. Unlike the interest rate, APR includes lender fees, discount points, and other charges, making it the most accurate number for comparing loan offers. A higher gap between interest rate and APR means more upfront costs are baked in.
Origination Fee: A fee charged by the lender for processing and underwriting your loan, typically 0.5% to 1.0% of the loan amount. It covers the administrative cost of creating the loan. This fee is negotiable, and some lenders waive it in exchange for a slightly higher rate.
Discount Points: Upfront fees you pay at closing to reduce (or “buy down”) your interest rate. One point equals 1% of the loan amount and typically lowers your rate by about 0.25%. Points make sense if you plan to keep the loan long enough to recoup the upfront cost through lower monthly payments.
Escrow: An account managed by your lender (or a third-party escrow company) that holds funds for property taxes and homeowners insurance. Your lender collects a portion with each monthly payment and pays these bills on your behalf when they come due. At closing, you’ll typically prepay two to three months into this account.
PMI (Private Mortgage Insurance): Insurance required by lenders when your down payment on a conventional loan is less than 20%. PMI protects the lender (not you) if you default. It costs 0.5% to 1.5% of your loan annually and can be removed once you reach 20% equity (or automatically drops off at 22% equity on conventional loans).
Rate Lock: An agreement between you and your lender that freezes your quoted interest rate for a set period (usually 30 to 60 days) while your loan is processed. A rate lock protects you from rate increases during that window. Some locks include a “float down” option that lets you benefit if rates drop after locking.
Helpful Tools and Resources
Mortgage applications require stacks of documents: tax returns, pay stubs, bank statements, W-2s. A 13-pocket accordion organizer keeps everything sorted and ready for your lender.
Run your own mortgage payment calculations to verify what lenders tell you. A basic financial calculator lets you compare rates, terms, and break-even points on the spot.
A professional portfolio keeps your printed mortgage documents, Loan Estimates, and comparison notes organized for every lender meeting.
- CFPB Mortgage Shopping Worksheet: The Consumer Financial Protection Bureau’s free tool for comparing Loan Estimates side by side. Walks you through each section so you know what to look for.
- Freddie Mac Primary Mortgage Market Survey: Weekly national average mortgage rate data. Check this before your lender meetings so you know what “average” looks like.
- AnnualCreditReport.com: The only federally authorized source for free credit reports from all three bureaus. Pull yours before applying for a mortgage.
- CFPB “Explore Interest Rates” Tool: Enter your credit score, location, and loan details to see current rate ranges. Excellent for verifying whether a lender’s quote is competitive.
- HUD Housing Counselors: Free or low-cost housing counseling from HUD-approved agencies. Especially useful for first-time buyers who want unbiased guidance before committing to a lender.
- NMLS Consumer Access: Look up any loan officer or mortgage company’s licensing and disciplinary history. Takes 30 seconds and tells you whether your lender is operating legitimately.
Frequently Asked Questions
How many mortgage lenders should I compare before choosing one?
At least three, but five is better. The Consumer Financial Protection Bureau found that borrowers who compare multiple lenders save significantly over the life of the loan. Don’t worry about credit hits: multiple mortgage inquiries within a 14- to 45-day window count as a single inquiry on your credit report.
Will getting multiple mortgage quotes hurt my credit score?
Nope. Credit scoring models recognize rate shopping. As long as your mortgage inquiries fall within a short window (14 to 45 days depending on the model), they’re grouped as one inquiry. The small temporary dip (usually 5 points or less) is nothing compared to the savings from finding a better rate.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is a rough estimate based on what you tell the lender, usually without a credit check. Pre-approval involves actual verification of your income, assets, debts, and credit, resulting in a conditional commitment for a specific loan amount. Sellers take pre-approval seriously because it means you’ve been vetted. Pre-qualification? Not so much.
Should I choose a bank, credit union, or online lender?
Each has trade-offs. Banks offer convenience and sometimes rate discounts for existing customers. Credit unions typically charge lower fees and offer more flexible underwriting since they’re nonprofits. Online lenders tend to have competitive rates and faster processing but less in-person support. Get quotes from all three types and compare using this checklist. That’s the only way to know who wins for your situation.
When is the best time to lock in a mortgage rate?
Lock when you’re comfortable with the numbers and your closing date falls within the lock period (typically 30-60 days). Trying to time the market is a losing game, since rates are genuinely unpredictable. If rates are trending up, lock sooner. If you want some wiggle room, ask about float-down options that let you benefit if rates drop after you lock.
This article is for educational purposes only and does not constitute financial advice. Mortgage terms, rates, and programs vary by lender, location, and individual financial circumstances. Always consult with a qualified mortgage professional or financial advisor before making borrowing decisions. Loan program requirements and availability are subject to change.