Questions to ask lender as I am I a first time home buyer

[Tom Fitzsimmons]

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

[Jack Seiden]

Quote from @Tom Fitzsimmons:

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

 Those are great! I would also add make sure you go with a lender who can close, don’t necessarily go with a lender who gave you the cheapest rate, read online reviews, ask around about who good lenders are etc.

[Kyle Deutschmann]

Quote from @Tom Fitzsimmons:

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

To answer some of your questions - yes there are first time home buyers programs in Maryland. Maryland Mortgage Program is a state wide down payment assistance loan and there are also local programs depending on your city/county you’re looking to buy. There are trade offs that come with some of these programs however including inability to legally rent your home our, higher interests rates, slower approval process, etc. 

 transfer taxes are typically split in Maryland between buyer and seller, however first time home buyers get a discount on transfer taxes. 

title fees are paid by the buyer unless negotiated otherwise. 

interest rate can be fixed or variable. Most people opt for fixed rates but in certain scenarios an ARM might make sense.

there are typically no pre-payment penalties on primary residence mortgages.

happy to answer any other lending questions you may have! 

[Jordan Murrell]

Working at a mortgage office as a production coordinator, I have found these to be very good questions to ask a lender...

1. Which type of mortgage is best for me? 2. How much down payment will I need? 3. What credit do I need to qualify? 4. Do you offer pre-approval or pre-qualification? 5. How will I be updated during the process? 6. Do I qualify for any down payment assistance programs? 7. Are you doing a hard credit check on me today? 8. What is my interest rate and APR? 9. Are there any discount points? 10. Will I have to pay mortgage insurance? 11. What will my monthly payment be? 12. What is your origination fee and what are your lender fees? 13. How much of this can we do online?

I hope this helps.

Let me know if you need anything!

[Tom Fitzsimmons]

Quote from @Jack Seiden:

Quote from @Tom Fitzsimmons:

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

 Those are great! I would also add make sure you go with a lender who can close, don’t necessarily go with a lender who gave you the cheapest rate, read online reviews, ask around about who good lenders are etc.

Thanks Jordan, it does! I'm adding to an ongoing list of questions since my relator connected me to their lender. This is my first experience with a lender, and I am now asking more of these questions to get the ball rolling!  

[Tom Fitzsimmons]

Thanks Kyle, 

This is really helping me! Happy to jump on a call to connect! 

[Tom Fitzsimmons]

Quote from @Jack Seiden:

 Those are great! I would also add make sure you go with a lender who can close, don’t necessarily go with a lender who gave you the cheapest rate, read online reviews, ask around about who good lenders are etc.

What do you mean by a lender who can close? I assumed that the relator is the one doing the heavy lifting on closing? Would love to hop on a call to learn more about this! 

[Justin Lanciault]

Quote from @Tom Fitzsimmons:

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

 - In MD you get a reduction in your transfer/recordation taxes. You can also get a mortgage as low as 3%. Grant programs are income based in MD.

- Title transfers fees are typically split 50/50 but you can ask the seller to pay it; its pretty rare that they will agree. 2/3 of my business is in MD and I have never seen this actually accomplished.

- the rate can be variable or fixed, depends on what you want

- very rare for there to be pre-payment penalties on an owner-occupied home

Also, when you say investing, do you mean buying an investment property? If thats the case you are not eligible for 1st time buyer benefits even if you are buying your 1st home. If you mean investment in the sense of house-hacking or turning the home into a rental after you move out, then yes you can get the benefits.

[Kyle Deutschmann]

Quote from @Tom Fitzsimmons:

Quote from @Jack Seiden:

 Those are great! I would also add make sure you go with a lender who can close, don’t necessarily go with a lender who gave you the cheapest rate, read online reviews, ask around about who good lenders are etc.

What do you mean by a lender who can close? I assumed that the relator is the one doing the heavy lifting on closing? Would love to hop on a call to learn more about this! 

The lender does a lot more of the heavy lifting than you think. There are a lot of steps to make sure they send a clean file to underwriting and avoid all sorts of hiccups and issues that can happen during the underwriting process. some lenders do not take the time to do their due diligence upfront to pre-underwrite you and just “pre-qualify” you based on a quick phone call. If an underwriter doesn’t look at your file and review your supporting docs then your “pre-qual” letter you printed out yourself online won’t mean anything and that lender could take 30-45 days just to deny you and they’ll just happily move on.

prime example: better.com entices you with below average rates (or at least they used to before laying off half their staff) which is tempting, and then you’ll wonder if you’re ever going to close. You’ll call one loan officer then the next day talk to someone else random on their “team”. Their loan officers are paid just to sell you the deal and lock the loan - they have no incentive to actually get you to closing. This is unfortunately how a lot of banks and online lenders operate. 

[Dave Skow]

@Tom Fitzsimmons...good  question  ...fyi - there are no prepayment penalties ...the loan programs  can be both  fixed or  variable ..depends what you want .....tips  1) get a hypothetical  purchase price and loan amount in mind ...contact some lenders on same day - ask for  quotes for the same  program and  ask if they can send you some wort of loan  cost worksheet for  the  scenario ...this will allow you  to become familar with the  numbers and  also  see the  line by line costs involved in buying  .....2) make a decsion to  work with one lender on your pre approval   3)  ask this lender to tell you  your maximum loan amount  so you can  determine if you will be able to  do what you want to do 

[Michael Sassone]

Quote from @Tom Fitzsimmons:

What are some questions I should be asking a lender? I'm a first time home buyer... 

So far I have:

- Are their any first time home buyer grants I can take advantage of in my state? (I'm investing in Maryland)  

- Are all title and transfer fees paid by the seller? 

- Is the interest Rate variable or fixed? 

- Are there any penalties for making multiple payments a month or paying off early? 

Any thoughts and or experience would be much appreciated! 

 Those are all great questions to ask! Check out this blog post I wrote after buying my first home. First Time Home Buyers Guide to the Galaxy. It outlines my entire experience as a first time home buyer from start to finish from: figuring out finances and how much I could afford, to using mortgage calculators, negotiating with lenders, choosing an agent, etc. There are links and references to HUD's website to see what First Time Home Buyer programs are available in your area (I tell you how to navigate the website to find the info you need).

Hopefully that blog post will help you generate questions.

My biggest piece of advice is don't settle for less. Ask your agent a plethora of questions too not just the lenders. Make sure the agent you get is really there for YOU. We have fiduciary responsibilities and a code of ethics but a lot of agents aren't really there to find you the best deal instead of themselves the best commission. It's unfortunate but true (I went through 3 agents before finding the one that sold me my home). My first time home buying experience was atrocious but that doesn't mean yours has to be. 

If you have any questions please feel free to reach out!

[Michael Sassone]

Also I did a quick search on HUD.Gov I saw you are in Gaithersburg, MD so here's a direct link to the HUD first time home buyers programs available in your city.

https://www.gaithersburgmd.gov...

And this is the link directly to Maryland homebuying programs as a whole.

https://www.hud.gov/states/mar...