20 Questions to Ask a Mortgage Lender Before You Commit (2026)

This is where the conversation should start. A good lender will ask about your credit, income, down payment, and goals before recommending a product — not push you toward whatever they have a quota for this month.

"Based on what you've told me, here are 2–3 programs that could work for you, and here's how they compare..." A lender who immediately jumps to one product without asking questions is a red flag.

Always ask for both the interest rate AND the Annual Percentage Rate (APR). The interest rate is the cost of borrowing the principal. The APR includes fees and other costs, giving you a true picture of what the loan costs per year.

A lender quoting a low rate with high fees can actually cost more than a slightly higher rate with low fees. Use APR to compare offers apples-to-apples. On a $400,000 loan, 0.5% difference in rate = ~$120/month and ~$43,000 over 30 years.

Your mortgage payment is more than principal and interest. Make sure your lender gives you the full PITI breakdown:

• P — Principal (loan paydown)
• I — Interest
• T — Property Taxes (escrowed monthly)
• I — Insurance (homeowner's insurance escrowed monthly)
• + PMI/MIP if applicable
• + HOA if applicable

Lender fees are negotiable and vary widely. Common charges include origination fees, underwriting fees, processing fees, and discount points. Some lenders charge $3,000+ in lender fees; others charge very little or nothing in exchange for a slightly higher rate.

"Can you show me a breakdown of every lender fee on the Loan Estimate?" Then compare this across lenders — not just the rate.

Closing costs in Arizona typically run 2–3% of the loan amount. They include lender fees, title and escrow charges, prepaid interest, property tax escrow, and homeowner's insurance. On a $400,000 purchase, that's $8,000–$12,000.

"Can I get a Loan Estimate showing all estimated closing costs?" Lenders are legally required to provide a Loan Estimate within 3 business days of receiving your application.

Down payment requirements vary significantly by loan type. Here's a quick reference:

Mortgage insurance protects the lender (not you) if you default. Whether you pay it and how long depends on your loan type and down payment:

• Conventional PMI: Required if down payment is under 20%. Cancels automatically at 22% equity, or you can request removal at 20%.
• FHA MIP: Required regardless of down payment. Lasts the life of the loan if you put less than 10% down. Many FHA borrowers refinance to conventional once they hit 20% equity to eliminate it.
• VA and USDA: No monthly mortgage insurance. VA has a one-time funding fee instead.

Put 20% down, or ask about "lender-paid PMI" (LPMI) where the lender covers PMI in exchange for a slightly higher rate — useful if you plan to stay in the home long-term.

A rate lock guarantees your interest rate for a set period while your loan is processed, protecting you from market increases. Standard locks are 30–60 days. Longer locks may cost more.

• How long is the lock period?
• What happens if the lock expires before closing?
• Do you offer a float-down option if rates drop after I lock?
• Is there a fee to extend the lock if closing is delayed?

In Arizona, the typical closing timeline is 21–30 days from contract to close. Some lenders routinely take 45–60 days, which can put your purchase contract at risk if the seller has a hard closing date.

"What was your average days-to-close last quarter?" A good lender will know this number. Ask for it specifically for the loan type you're applying for — VA loans, for example, can take slightly longer due to the VA appraisal process.

A prepared lender will give you a complete document checklist upfront — not ask for items piecemeal throughout the process (a major cause of delays and frustration). Standard requirements include pay stubs, W-2s, tax returns, bank statements, and photo ID. Self-employed borrowers may need P&L statements and 12–24 months of business bank statements.

Most mortgage loans are sold to larger institutions (Fannie Mae, Freddie Mac, or servicing companies) after closing. This is completely normal and doesn't change your rate or terms. However, it does mean your monthly payment may go to a different company than the one that originated your loan.

What matters more is whether the lender services their loans in-house or immediately transfers them. Some borrowers prefer lenders who keep servicing in-house for a more consistent experience.

Many Arizona buyers qualify for DPA programs that cover some or all of the down payment — and most don't realize it. Ask specifically about:

• Arizona Home Plus Program (grant — never repaid)
• Maricopa County Home in Five Advantage (up to 7% for qualifying professions)
• Pathway to Purchase (up to $20,000 in eligible zip codes)

Not all lenders are approved to offer all DPA programs. A broker with access to multiple programs can match you with the best combination of rate and assistance.

If the appraised value is lower than the purchase price, you have a few options: negotiate with the seller to reduce the price, make up the difference in cash (covering the "appraisal gap"), or walk away if you have an appraisal contingency in your contract.

"How do you handle low appraisals? Can you help me understand my options before we're in that situation?" A lender who has clear answers to this is far more valuable than one who learns on the fly.

This matters more than most buyers realize:

• Bank / Direct Lender: Can only offer their own products at their own rates. Fast decisions, but limited options.
• Mortgage Broker: Accesses dozens of lenders on your behalf, compares rates and programs, and finds the best fit. Compensated by the lender — typically costs you nothing extra, and often saves you money.
• Retail Bank (walk-in): Usually the most expensive option due to overhead costs and limited product range.

The biggest complaint homebuyers have about lenders is poor communication — not knowing where their loan stands, finding out about problems at the last minute, or being handed off to multiple people with no clear point of contact.

• Who is my primary point of contact from application to closing?
• How quickly do you typically respond to calls and emails?
• Will I get proactive updates or do I have to ask?
• Are you available evenings and weekends? (In Arizona, many real estate transactions happen on weekends.)

A good lender will pull your credit early and give you an honest assessment of where you stand — not just tell you what you want to hear. If your score needs work, they should tell you exactly what to fix and give you a realistic timeline.

Discount points are upfront fees paid to lower your interest rate. One point = 1% of the loan amount and typically reduces the rate by 0.25%. Whether buying points makes sense depends entirely on how long you plan to stay in the home.

Pre-approval is not a guarantee. These are the most common reasons loans get delayed or denied after pre-approval:

• Opening new credit accounts or taking on new debt
• Large undocumented cash deposits
• Job change or loss of income
• Low appraisal on the property
• Title issues discovered during the title search
• Property condition issues that fail appraisal requirements
• Missing or inconsistent documents

Ask your lender what specifically applies to your situation and how to avoid it. A proactive lender will flag potential issues before they become problems.

The Loan Estimate is a standardized 3-page document required by federal law (TRID) that shows your interest rate, monthly payment, closing costs, and loan terms. Lenders must provide it within 3 business days of receiving your completed application.

Ask for it early — before you're emotionally committed to a lender. It's the best tool available for comparing offers side-by-side. The format is identical across all lenders, making comparison straightforward.

This is a fair and reasonable question to ask any professional. A good lender will have a clear answer and real verified reviews to back it up. Look for reviews on:

• Google Business Profile
• Zillow
• Yelp
• Facebook
• NMLS Consumer Access (verifies licensing)

Pay attention to recent reviews — the last 12 months matter more than a 5-year-old 5-star rating. Look for specifics: did the lender communicate well? Close on time? Handle problems professionally?