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Choosing a mortgage broker might seem like a no-brainer if you go with whoever quotes you the lowest rates and fees. On the surface, that seems like a win-win strategy. But the lowest rates and fees can’t make up for poor service or a lack of transparency.
To get the lowdown on how to cut through lending jargon so you know exactly what you’re signing up for, we spoke to two veteran lending experts for insights. Joe Parsons is a branch manager with Caliber Home Loans in Dublin, California, and Kyle Kamrooz is co-founder and chief operating officer of Cloudvirga, an online mortgage lending platform.
Here are four important questions you should ask when evaluating mortgage brokers:
1. How does your application process work?
With more lenders offering online platforms so you can track the progress of your loan, the ambiguity around underwriting is slowly dissolving. But not all mortgage lenders are there yet, Kamrooz says. Here’s what you’ll want to know about the process:
- Average time to closing.
- Third-party fees and lender fees in an estimated fee sheet.
- Cost and timeline to lock in a mortgage rate.
- Specific loan product requirements for credit score, debt-to-income ratio, down payment, etc.
- Whether there’s an online platform where you can upload documents and check the progress on your loan.
- Documents needed at each point in the loan process and deadlines for submitting them.
- Companies used for home loan services such as appraisal, title insurance, escrow, etc. (You can shop around for these services if you wish.)
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