Three Questions You Should NOT Ask Mortgage Lenders in Arizona – and Why

How much mortage am I qualified for?

This is the #1 question asked of lenders. It doesn’t matter how much you qualify for if that payment makes you choke!  A better question to ask is: “What size loan would I need if I want my mortgage payment to be no higher than between $1,200 – $1,500?” Remember banks and mortgage companies will give you enough rope to hang yourself every time!  Be Smart!

What is your Interest Rate

A mortgage lender won’t tell you this but they are thinking:  “Do you mean my rate right now, yesterday, tomorrow, or when you actually apply for a loan. Does that mean the interest rate you would get if you had perfect credit and 20% down, or if you bought the interest rate down with one point, or the interest rate I would give my mother, or the interest rate you want to hear because it is a little lower than what you can find on the internet, and so on …” 

The problem is the answer to your question means very little.  In other words, the resulting answer is only to make you feel good because then you can say you compared it a rate you received from another loan officer or from a 30 second internet search.

To be smart, ask a question that might really tell you if you are dealing with a professional like: “What have been the mortgage rate movements in the last week and why?” Or: “What economic indicators came out in the last day (or will be coming out  soon) that you feel will move the markets and why?”  If you get a good answer  from the mortgage loan officer you are talking to than you probably found a quality professional.  If you get a long pause you should continue your search for a mortgage lender.

Remember, calling 10 lenders to find who has the lowest rate might be a great experiment to find the biggest storyteller.

How much are your fees?

Again, this  question is designed to tell you something you think you can compare. The problem is that it can be answered honestly in several ways without being dishonest. But, you don’t know in which way it was answered.

It would be like asking a doctor “how much will it cost to be treated” before he has seen you and run any tests. The doctor could say “$20″ because that is the amount of your co-pay and that is an honest answer.  However, the answer could change if it turns out you have a rare disease. You may have to satisfy certain deductible requirements. The $20 will not include the cost of medication.  Perhaps the $20 will be the cost for that doctor but not for the cost of the  specialist you need to see. The doctor can not add in hospital fees because he doesn’t know if you will need to be hospitalized.

A better question is:  “Can you give me an estimate of not only your fees, but all the fees involved from every company  involved in the transaction?”