Questions to Ask Your Lender as a First-Time Home Buyer

Most first-time buyers treat the lender conversation as a one-way interview — the lender asks for documents, the buyer provides them, and eventually a loan appears. That is the wrong framing.

Your lender is a vendor. You are the customer considering a $300,000 to $500,000 financial commitment that will affect your budget for thirty years. You should be asking them as many questions as they ask you.

Here are the questions that matter, organized by what they reveal.

Questions About Loan Types and Eligibility

What loan programs am I eligible for?

Most first-time buyers qualify for multiple loan types. A conventional loan, an FHA loan, and a state-sponsored first-time buyer program may all be available to you simultaneously. Each has different down payment requirements, mortgage insurance terms, and closing cost implications. Ask the lender to show you side-by-side estimates for at least two options.

What are the requirements for a conventional loan vs. an FHA loan?

Conventional loans backed by Fannie Mae and Freddie Mac require a minimum 620 credit score and typically need 3% to 5% down for first-time buyers. FHA loans require a 580 score for 3.5% down, or as low as 500 with 10% down. The trade-off is that FHA loans carry a mandatory upfront mortgage insurance premium (MIP) plus an ongoing monthly MIP for the life of the loan in most cases. Conventional loans allow you to cancel private mortgage insurance (PMI) once you reach 20% equity.

Are there any first-time buyer programs I should apply for before we proceed?

Down payment assistance programs, forgivable second mortgages, and closing cost grants exist at the federal, state, and local level. Many lenders will not volunteer this information because these programs sometimes reduce the lender's revenue. Ask directly. State housing finance agencies (HFAs) administer most of these programs, and many require you to use a participating lender — which your current lender may or may not be.

What credit score do I need for the rate you are quoting?

Mortgage rates are tiered by credit score. The rate a lender advertises or quotes over the phone often assumes a 760+ credit score. If your score is 700, your actual rate offer will be higher. Ask specifically: "What rate would I get at my current score?" — and ask them to show you the rate and fee difference between your current profile and an optimal-score borrower.

Questions About Fees and Your Loan Estimate

What is your total origination charge, and what does it include?

Origination fees are listed in Section A of the Loan Estimate. A lender charging 1% origination on a $350,000 loan is charging $3,500 before any other fees. Some lenders include underwriting and processing in the origination charge; others itemize them separately. Ask for the all-in Section A total and whether any of those line items are negotiable.

Are you charging points to buy down the rate, and if so, what is the break-even?

Discount points are prepaid interest used to lower your rate. One point equals 1% of the loan amount. If your lender is quoting a rate with points included, ask what the rate would be without points. Then calculate: monthly payment savings divided into the upfront point cost equals the break-even month. If you plan to sell or refinance before that month, the points cost you money.

Which fees can increase between the Loan Estimate and the Closing Disclosure?

Under TRID regulations, Section A fees (origination charges) and Section B fees (services you did not shop for) are subject to zero tolerance — they cannot increase at closing unless there is a valid change of circumstance. Section C fees (services you shopped for) can increase by up to 10% in aggregate. Prepaids can change with no limit because they depend on property specifics. Understanding this structure lets you compare the LE and CD intelligently and catch any unauthorized fee increases.

Do you charge an application fee, and is it refundable if I am not approved?

Some lenders charge $300 to $500 upfront for a credit report and application processing. Know whether this fee is separate from origination, whether it is credited back at closing, and whether you lose it if the loan does not close.

Questions About the Rate

Is this rate a purchase rate or a refinance rate?

Purchase rates and refinance rates are different. Make sure you are comparing like for like when shopping multiple lenders.

How long can you lock this rate, and what does a rate lock extension cost?

Rate locks typically last 30 to 60 days from application. If your closing extends beyond that window — due to construction delays, title issues, or appraisal complications — you may need to extend the lock. Extensions cost money, usually 0.125% to 0.25% of the loan amount per extension period. Ask what triggers an extension and who pays for it if the delay is the lender's fault.

What happens to my rate if mortgage rates drop after I lock?

Some lenders offer float-down provisions that allow you to take a lower rate if rates fall after you lock, typically for a fee. It is worth knowing whether this option exists before you commit.

Questions About the Process

What documents do you need from me, and how quickly can you provide a fully underwritten pre-approval?

There is a difference between a pre-qualification (based on what you told the lender about your income) and a fully underwritten pre-approval (where the lender actually verifies your income, assets, and credit). In competitive markets, a fully underwritten pre-approval carries significantly more weight. Ask specifically whether the pre-approval includes actual income and asset verification.

How long is your typical close time from application to closing?

Standard close time is 30 to 45 days. Some lenders offer 21-day closes. Others take 50+ days. If you are competing for a property where the seller wants a fast close, your lender's timeline matters.

Who will be my point of contact during the process?

Large banks often route your file to a central processing team after the initial conversation, and you may never speak to your loan officer again. Smaller brokers and credit unions often provide a single point of contact throughout. Knowing this upfront prevents the frustration of chasing down status updates.

Will you perform a second credit check before closing?

Yes — most lenders do. Any new debt or account opened between application and closing can affect your approval. This is why you should not buy furniture, lease a car, or open new credit accounts between your mortgage application and the day the deed records. Ask the lender when this final check happens so you can plan accordingly.

The questions above are the ones most likely to surface differences between lenders that a rate comparison alone will not show. The Closing Cost Guide includes a lender comparison worksheet that puts all Section A fees from multiple Loan Estimates side by side, so you can see total cost differences — not just rate differences — before you commit to a lender.