Five Critical Questions to Ask Before Choosing a Mortgage Lender

Shopping for a home is more than just finding the perfect property—it’s about choosing the right financial partner. Before you commit to a mortgage lender, make sure you get clear, direct answers to these five essential questions.

1. "What will my actual closing costs look like?"

Many first-time buyers do not realize that purchasing a home requires cash beyond your down payment. Closing costs cover third-party services like title insurance, appraisals, and local government taxes.

While costs depend heavily on your exact purchase price and county, here is a general benchmark for the DMV area:

Maryland: Total closing costs and prepaids typically run about 3.00% of the sales price.
Washington, DC: Total closing costs and prepaids frequently lean closer to 3.00% to 4.00% due to local recordation taxes.
Virginia: Total closing costs and prepaids average roughly 2.75% of the sales price.

Pro Tip: You cannot simply "roll" closing costs into a conventional loan. To cover them without paying out of pocket, you must either negotiate a seller credit or reduce your down payment (which will increase your loan amount and monthly payment).

2. What are your specific lender fees?

While a total cash-to-close estimate includes dozens of items, the lender is only responsible for a fraction of them (such as origination, processing, and underwriting fees). This portion varies wildly from lender to lender.

Never choose a lender based purely on a total cash-to-close estimate.

Unscrupulous lenders sometimes lower their upfront third-party estimates on paper just to look more competitive, even though they have no control over those actual final costs. Always demand a line-by-line breakdown of the fees the lender does control.

3. Are there discount points built into this interest rate quote?

Discount points are an upfront fee paid at closing to permanently "buy down" your interest rate. Essentially, you trade upfront cash for a lower monthly mortgage payment.

The mistake many borrowers make is focusing strictly on the low interest rate without looking at the cost to get it. When comparing quotes, always calculate the break-even point—the number of months it will take for your monthly savings to fully recover the upfront cost of the points. If you plan to sell or refinance before hitting that break-even point, paying points is a losing strategy.

4. Do you offer a soft credit pull for the initial pre-approval?

A soft credit check reviews your credit report without triggering a formal inquiry, meaning it has zero impact on your credit score.

Working with a lender who utilizes soft pulls early in the process lets you protect yourscore while verifying your home-buying eligibility. Furthermore, it gives your loan officer an opportunity to review your profile risk-free. If a soft pull uncovers a minor blemish—like an incorrect collection notice or a high credit card utilization rate—your lender can build a credit optimization plan to maximize your score before running a formal hard pull once you are under contract.

5. Will you broker this loan, and who is my main contact?

This question is pushed aside far too often. If a company brokers your loan, they are acting as a middleman. They hand your file off to an outside investor who controls the underwriting and the cash, leaving your loan officer with very little control over the closing timeline.

You want to know exactly who is handling your file. Make sure your loan officer is your primary advocate—someone who is accessible on weekdays, weeknights, and weekends. The homebuying process moves quickly in a competitive market, and you cannot afford to wait days for an answer when a contract deadline is ticking away.

The Bottom Line

Choosing a mortgage lender is about more than finding the lowest interest rate. The right lender will provide transparent pricing, explain every option clearly, protect your financial interests, and remain accessible from pre-approval through closing. Asking these five questions upfront can help you avoid surprises and make confident, informed decisions.

Ready to Take the Next Step?

Whether you're buying your first home, upgrading, or refinancing, having the right lender can make all the difference. If you have questions about your financing options or would like a personalized mortgage strategy, I'm here to help.

Contact William Mitchell today to discuss your goals and get expert guidance every step of the way.