If you’re thinking about house shopping, you’re also thinking about mortgage shopping! In this post, you’ll find out what questions to ask any prospective mortgage lenders.

Not all mortgage lenders are the same. Some only offer home loans; others (like many of our major banks) offer a long list of financial products that include home loans. Sometimes buyers work with mortgage brokers instead of the actual lenders. All in all, getting a mortgage can be a very complicated process.

Mortgage 1 Has the Answers Whether you’re a first-time buyer or looking to refinance, Mortgage 1’s loan experts can help you navigate the home-loan process. Call at 1-866-532-0550 or use our Pro SNAP digital app to get started.

Who’s Who in the Mortgage Business

Before we ask and answer our five questions, let’s take a moment to define some mortgage transaction terms and roles:

• Mortgage originators put together loans for clients and begin the process. They may or may not fund and service the mortgage themselves. Mortgage lenders, banks, or other institutions can all be mortgage originators.
• Mortgage lenders/bankers create and fund the mortgage. They may or may not service the loan.
• Mortgage brokers work with clients to find mortgage lenders and evaluate loan offers; they do not create or fund the loans themselves. They usually work with multiple lenders.
• Loan officers work for a mortgage lender. Like mortgage brokers, they help clients determine which loan options work for them, fill out paperwork, and submit it for processing.
• Loan processors ensure that the client’s paperwork is accurate and complete and hands it over to the underwriters.
• Underwriters determine if the client meets the requirements for their loan and if they’re able to repay the amount.
• Closers prepare the final documents and work with other professionals (e.g. attorneys or title companies) to ensure the closing goes smoothly.
• Mortgage servicers manage the loan during its lifetime, handling payment processing, accounting, administrative duties, and tax and insurance payments (if necessary).

It’s important to note that different mortgage and loan companies may have different names for these roles, or some roles may be combined. Also, some roles (such as underwriting and servicing) may be outsourced to other companies.

Now, on to the questions.

5 Questions to Ask Your Mortgage Lender

Do you fund your own loans?

Mortgages that are funded in-house allow the originator to eliminate third-party lenders and reduce their reliance on the outside financial market.

Mortgage 1’s answer: Yes! And we can offer personalized service that other in-house mortgage lenders like big banks cannot. This lets us move quickly when it’s time to process and close a loan.

Do you underwrite your loans or rely on a third party?

Some companies rely on outside mortgage underwriting specialists to process the mortgage. As most of the underwriting work involves carefully checking financial and real estate documents, this can be a time-consuming task.

Mortgage 1: We underwrite our own loans. This lets us close faster, provide better service to our clients, and makes for better communication between all parties – in fact, a better experience for all involved.

Do you handle my loan from start to finish? Or will other companies be involved?

Not every mortgage lender has the ability to do their own servicing and underwriting; it’s quite common for these to be contracted out to other companies. With mortgage servicing, this means the client is dealing with another company for the life of their loan.

Mortgage 1: All Mortgage 1 loans stay in-house, from the initial application to the final payment. None of our clients get handed off to mortgage servicing companies.

Are you licensed?

All mortgage lenders have to be either licensed or registered. What’s the difference? According to the Nationwide Mortgage Licensing System (NMLS): “Mortgage loan originators employed by state-licensed companies are generally required to hold a state license to conduct business in that state. Mortgage loan originators employed by banks, credit unions, and other federally regulated depository institutions must be federally registered in order to conduct business, and that registration is not limited to a particular state.”

Mortgage 1: Yes! We are fully licensed in Michigan, Ohio, Florida, Montana, Texas and several other states.

How long have you been in business?

This one is relatively obvious; you want to entrust such a major transaction to a company that’s been around for a while and has a good reputation.

Mortgage 1: We’ve been in business since 1994 and have become Michigan’s leading MSHDA lender and the state’s fourth-largest lender overall. We’ve also been the state’s leading lender for first-time home buyers for 9 years straight. We’ve grown from a single office to offices in 5 states.

For more ideas on what to look for when shopping for a mortgage, check out our expert home-buying advice or contact your local Mortgage 1 office today!