A mortgage company serves as a mediator between the lenders and borrowers of mortgage. Its brokers have mortgage rates and programs from various lending sources that enables you to evaluate different terms and conditions. You can ask them any mortgage related question including prepayment penalties, insurance programs, and underwriting process.

The general rule of thumb is that a potential home buyer should not only inquire about the mortgage interest rate. Instead, acquiring understanding of the entire terms and conditions of the mortgage program is absolutely necessary.

Following are some important questions that you should ask your mortgage agent.

1. Which Kind Of Loan Is Best? No matter how good or bad your credit score is, it is imperative that your mortgage broker offers you an option that befits your situation. Select an agent who collects adequate information from you before recommending a particular kind of loan. Do not hesitate to ask a broker about the pros and cons of different options.

2. What Will Be The Actual Interest Rate? Make sure to ask your mortgage agent to provide you the ARP (Annual Percentage Rate). The ARP indicates not only the mortgage interest rate, but also the closing costs, points, and margin. If you opt for an adjustable rate mortgage, then you should inquire about the maximum rate, margin, frequency of adjustments, and applicable indexes.

3. Does The Mortgage Have Prepayment Penalty? Inquire your agent about prepayment penalty and its consequences. Your agent may recommend availing the prepayment option due to the lower interest rate. Make sure to ask him about different penalty costs in interest in case you sell your home or refinance your mortgage before the maturity of prepayment period.

4. What Are The Total Costs Of The Loan? Closing costs incorporate different charges for title search, document preparation, evaluation, survey, taxes, credit report, and recording fees. Ask your broker to provide you an estimate of these charges.

5. How Long Will The Mortgage Take To Get Processed? You should ask your agent about the average processing time for your particular mortgage. While realizing that unexpected circumstances can affect the processing time, ask your broker to provide an estimated closing time. You can also request to include a closing date in your mortgage loan contract.

6. Is There Any Offer For Mortgage Rate Locks? Mortgage interest rates tend to fluctuate on a daily basis. You may want to lock your rate before it moves up. Ask your agent if the lock-in can protect the entire loan cost and for how long the existing rate can be locked. Furthermore, make sure to determine if he/she charges any fee for locking-in your interest rate.