14 Questions to Ask Your Mortgage Lender Before Getting a Home Loan

When you're buying a home in Texas—whether in Austin, Dallas, Houston, or a hidden gem in the Hill Country—you’re not just house hunting. It’s one of the biggest (if not the biggest) financial decisions of your life. So, naturally, you may have a lot of mortgage questions about how the homebuying and financing process works.

Here’s some of the most common questions to ask your mortgage lender or broker. If you have any other questions, please reach out by clicking here. We’re happy to help!

1.  What Will My Total Monthly Payment Be?

Depending on what you agree with your lender, your monthly mortgage payment may be more than just principal and interest. In Texas, it typically includes escrows for property taxes, homeowners insurance and possibly HOA dues, PLUS mortgage insurance (depending on your loan program and down payment). These added costs can significantly change what you pay each month and impact your overall budget.

This is one of the first questions to ask a mortgage lender for pre approval, because knowing your true monthly payment avoids surprises later. It’s also one of the most important questions to ask a mortgage broker as a first-time home buyer, since new buyers often underestimate taxes and insurance.

Be sure to ask for a breakdown of all components of your projected monthly payment BEFORE home shopping. Don’t just take a base quote at face value—ask what happens if your taxes or insurance go up. Use our mortgage calculator to get a sense of what your monthly number may look like.

2.   Which Loan Product Is Right for Me?

There are more home loan options available today than ever before, and the right one for you depends on your situation. Do you want a fixed rate loan or an ARM? Are you self-employed? Do you receive RSUs or commission? Are you trying to buy a new home before selling your current one? These details matter.

At the most basic level, you’ll want to understand the differences between Conventional, FHA, VA, and Jumbo loans. Conventional loans are the most common and generally require higher credit scores and a minimum 3% down payment. FHA loans are designed to help first-time buyers and those with less-than-perfect credit, with a down payment as low as 3.5%. VA loans are available to eligible veterans and active-duty service members, requiring no down payment at all. Jumbo loans cover properties that exceed conventional conforming loan limits, and while they typically demand stronger credit and higher down payments, they’re essential in higher-cost housing markets.

But that’s just the starting point. One of the smartest questions to ask your mortgage broker is whether they offer specialized loan programs that banks often can’t. At LendFriend, we unlock programs like:

• • Bank statement mortgages for entrepreneurs and 1099 earners—qualify on 12–24 months of deposits instead of tax returns.

  • Asset depletion mortgages—convert liquid assets into qualifying income (ideal for retirees and high‑net‑worth clients).

  • DSCR loans—qualify investment properties on property cash flow, not personal income.

  • Buy Before You Sell bridge solutions—purchase first, sell later without a contingent offer.

  • Crypto-backed Mortgages—use digital assets as strength in your file without forced liquidation.

  • One-Time Close construction loans —finance land, construction, and permanent mortgage in a single closing.

  • RSU income mortgages—use your vested stock grants to qualify for more home. 

These programs are game-changers for buyers who don’t fit neatly into the traditional W-2 box. They’re also critical for maximizing buying power, especially in Texas markets where buyers may need creative solutions to compete. We also manage rate locks, float‑downs, and closing credits. Translation: strategy + competition = better economics.

3.   What Are Your Credit Score Requirements?

Many buyers want to know what questions should I ask my mortgage lender about credit. Most lenders will say you can qualify with a score as low as 620 (or even 580 with FHA loans), but that’s the minimum—not the target. A competitive score earns you better rates and terms, reduced mortgage insurance, and a wider array of loan options.

This is also one of the best questions to ask a lender when buying your first home, since your score directly impacts affordability. Improving your credit score before you apply isn’t as daunting as it sounds. Paying down revolving credit card balances to under 30% of their limit can quickly improve your utilization ratio. Making all payments on time—even for utilities and small accounts—can boost your history. Avoid opening new lines of credit or taking on auto loans in the months leading up to your mortgage application, since each inquiry or new debt can weigh down your profile.

It’s also smart to review your credit report for errors. Disputing inaccurate late payments or balances can make a measurable difference within a few weeks. For longer-term improvements, diversifying your credit mix and keeping old accounts open help strengthen your overall file. We break down these strategies in detail in our guide to raising your credit score.

Ask your loan officer what steps you can take now to improve your score and secure better pricing—and remember, the higher your score, the more negotiating power you’ll have when choosing between lenders.

4.   Are There Prepayment Penalties?

You may find yourself in a position to pay off your mortgage early. If you can swing it, this can save you thousands of dollars in interest. However, not all mortgage lenders allow clients to do so without conditions. If they do allow you to pay off your loan faster, you should ask whether there are any prepayment penalties. Mortgage lenders charge these fees to dissuade borrowers from making extra payments on their loans, refinancing their loans at a lower rate, or selling their home before the loan is due.

For most borrowers using conventional, FHA, VA, or jumbo financing, the good news is that federal rules require these loans to be “Qualified Mortgages” (QMs), which means they cannot include a prepayment penalty. The main exception comes with DSCR loans designed for real estate investors. DSCR lenders like to ensure they receive a minimum amount of interest over the first few years of the loan, which is why they may include either a hard or soft penalty if you refinance or sell too early.

There are two main types of prepayment penalties:

• Soft prepayment penalty: Borrowers can sell their homes without being penalized but are charged if they refinance or pay off the mortgage in one lump sum.

• Hard prepayment penalty: Borrowers are required to pay fees regardless of whether they sell their home, refinance it, or make a large payment to pay it off.

If your mortgage lender charges prepayment penalties, ask how much they cost and how they’re structured. These fees can vary widely—sometimes a percentage of the outstanding balance, sometimes a set number of months of interest—and can be very expensive, making early payoffs less attractive. That’s why questions for mortgage lender should always include: “Are there penalties if I refinance, sell, or pay off my loan early, and do they apply to my loan type?”

5.   What Will Closing Costs Be—and Can I Negotiate Them?

Closing costs in Texas typically range from 2% to 3% of the purchase price. They include appraisals, origination charges, title insurance, prepaid taxes, and insurance. Depending on your loan type and the property, you may also see items like survey fees, recording fees, underwriting charges, or discount points added into the mix.

One of the smartest questions to ask a home loan lender is: “What’s included in my Loan Estimate—and which of these fees can I shop or negotiate?” That way, you’re not blindsided at closing. Some fees are lender‑controlled, while others (like title insurance or certain third‑party services) can be compared across providers. In Texas, title insurance rates are set by the state, but other costs—like origination or underwriting—can vary significantly between lenders. Even items like appraisal turn times and credit report charges can differ, which is why comparing line items matters.

Borrowers should also ask whether seller credits, builder incentives, or lender‑paid options can offset part of the closing costs. In many Texas markets, it’s common to negotiate concessions that cover a portion of your closing bill. We’ve written a full breakdown of what’s typical, what you can negotiate, and what varies by state in our guide to closing costs.

6.   Do I Need an Escrow Account?

Escrow is one of the most common mortgage loan questions buyers overlook. Most lenders require it with less than 20% down. Even if you can waive escrow, ask your lender to show you the rate difference. This is one of the best questions to ask a mortgage lender when choosing a lender, because it reveals hidden costs.

Escrow accounts act as a forced savings tool, ensuring that property taxes and insurance premiums are always paid on time. While that helps protect both borrower and lender, it also means you’ll have higher monthly payments since those bills are collected upfront. In Texas, where property taxes are among the highest in the country, escrows can account for a big chunk of your monthly outlay. If you waive escrow, you’ll need to budget carefully to avoid a large surprise bill twice a year.

Some lenders may offer a small pricing adjustment if you keep escrow, while others may slightly increase your rate if you choose to waive it. Knowing both scenarios helps you decide what’s best for your budget and risk tolerance. We cover the pros, cons, and state‑specific rules in our guide to escrow accounts.

7.   What’s My Interest Rate and APR?

Every buyer knows to ask about the interest rate. But one of the crucial questions to ask a lender is about the APR, which includes fees and points. Interest rate alone only tells you the cost of borrowing the principal, while APR paints the bigger picture: it reflects the total cost of your loan when lender fees, discount points, and closing costs are factored in. Two loans with the same interest rate can have very different APRs if one is loaded with extra fees.

This is why it’s so important to push beyond the headline rate. Some lenders may tempt you with a lower interest rate but bury thousands of dollars of origination or underwriting fees in the fine print. Others may show a slightly higher rate but lower closing costs, which could actually save you money if you don’t plan to keep the mortgage for decades.

A good question to ask mortgage broker is: “Can you provide a side-by-side comparison of rate vs APR so I know which is truly more affordable?” You should also ask how long it takes to break even if you pay upfront fees for a lower rate, and whether your rate quote includes assumptions like escrow waivers or discount points. The answers to these questions help you compare apples to apples across lenders and avoid being misled by marketing tactics.

At LendFriend, we’ll walk you through both interest rate and APR scenarios, run break-even analyses, and show you the total long-term cost so you can make a confident, informed choice.

8.   Do You Offer Mortgage Points?

Paying points to buy down your rate is common—but not always smart. Mortgage points, also called discount points, are upfront fees paid at closing in exchange for a lower interest rate. Each point generally costs about 1% of your total loan amount and may lower your rate by roughly 0.125%—though the exact savings vary by lender and market conditions.

The key is to determine your breakeven point: how long it will take for the monthly savings to outweigh the upfront cost. If you plan to stay in your home long term, points can save you significant money over time. But if you expect to refinance or sell within a few years, paying for points might not pencil out.

It’s one of the most valuable loan officer questions to ask when buying a house: “What’s my breakeven point, and how does it change if I buy one point, two points, or more?” You’ll also want to ask whether points are even necessary in the current rate environment, since sometimes temporary buydowns or seller-paid concessions can be more cost‑effective.

We break down the math, strategies, and scenarios in more detail in our guide to permanent buydowns.

9.   Can I Lock My Rate—and for How Long?

This is one of the most time-sensitive questions to ask a mortgage lender. A rate lock protects you from market fluctuations once you’re under contract, essentially guaranteeing your interest rate for a set period of time. Locks usually last 30–60 days, though some lenders offer extended locks of 90 days or even longer for new construction. The cost of an extended lock can vary, so be sure to ask how much an extension would cost if your closing is delayed.

A critical follow-up question is whether your lock includes a float-down option. This feature allows you to capture a lower rate if market rates drop before you close. Not all lenders offer it—but LendFriend does, and it’s saved our clients anywhere from a few hundred dollars in closing costs to thousands over the life of the loan. We go into detail on timing strategies in our guide to rate locks and our float-down explainer.

For real estate agents, one of the most important questions to ask a lender as a real estate agent is: “Can my client’s rate lock be extended or floated down without penalty?” Knowing the answer upfront helps you write stronger offers and gives your buyers peace of mind during negotiations.

10.   Can I Buy Without My Spouse?

In community property states like Texas, this is a common mortgage lender question. Even if your spouse isn’t on the loan, they may still need to sign closing documents, and some programs (like FHA) require their credit to be reviewed. The reason is that community property laws treat debts and assets acquired during marriage as shared, regardless of who is listed on the loan.

That means if one spouse has significant debts, those may still be considered in the debt‑to‑income calculation, even if the spouse isn’t a borrower. Conversely, leaving a spouse off the loan can sometimes improve qualification if the other spouse’s debts would push ratios too high. This strategy is often used when one partner has strong credit and stable income, while the other has student loans, business debt, or revolving credit balances.

It’s also important to know that title ownership is unaffected by who is on the loan. In Texas, both spouses will generally own the property 50/50, whether or not they’re listed as co‑borrowers. That’s why you’ll almost always see the non‑borrowing spouse at the closing table signing documents such as the deed of trust or homestead rights disclaimers.

If you’re considering applying without your spouse, ask your lender what documentation will be required, how your spouse’s debts might impact underwriting, and whether program‑specific rules (like FHA’s mandatory spousal credit pull) will apply. Understanding these nuances ensures you aren’t surprised midway through underwriting and helps you decide the best path forward for your household.

11.   What Income Counts Toward My Loan Qualification?

Ask upfront: “What income sources will you count?” This is one of the most essential questions to ask a loan officer when buying a house if you’re self-employed or earn bonuses. Many borrowers qualify with RSUs, commission, or even crypto—but only if the broker knows how to structure it.

Not all income is treated equally. Base salary is straightforward, but variable pay like bonuses, overtime, or commissions often require a longer history. Guaranteed bonuses may count with just 12 months of history, while discretionary bonuses often need 24 months of consistent documentation. Our guide to using bonus income breaks down exactly how underwriters evaluate these earnings.

Self‑employed buyers and 1099 earners face a different challenge: tax returns don’t always reflect their true cash flow. That’s where alternative documentation programs such as bank statement loans come in. These programs allow you to qualify based on 12–24 months of bank deposits instead of taxable income, opening the door for entrepreneurs, freelancers, and gig‑economy workers.

High‑net‑worth clients or retirees can also leverage their assets through asset depletion loans, which convert investment portfolios into qualifying income. And in today’s market, crypto holders and employees compensated with RSUs can use those assets creatively, provided they’re documented correctly and supported by a broker familiar with complex underwriting.

The bottom line: income is broader than just a W‑2. Asking your lender to explain what counts, what doesn’t, and how it will be calculated is critical. We break down the full landscape of income qualification strategies in our income qualification guide.

12.   Do You Offer Preapproval or Prequalification?

Another set of questions to ask a lender involves preapprovals vs prequals. Both serve different purposes, and understanding the difference can save you time and stress. A prequalification is typically quicker, based on a soft credit pull and basic income documents like W‑2s or bank statements. It’s useful early in the process, letting you house hunt with confidence without hurting your credit. A preapproval, by contrast, involves a hard credit pull, full documentation, and often an underwriter’s review. It carries more weight with sellers but takes more time and effort to complete.

For first‑time buyers, this is one of the most important first-time home buyer questions to ask lender, since it affects how competitive your offer looks. In hot markets, sellers may prefer offers backed by preapprovals, while in slower markets a prequal may be enough to show good faith. The best approach is often to start with a prequal to explore options, then upgrade to a preapproval when you’re ready to make serious offers.

We dive deeper into the pros and cons of each in our guide to prequalification vs preapproval, including which one makes sense depending on your timeline and goals.

13.   How Much Do I Need for a Down Payment?

A classic mortgage question every borrower asks. Conventional starts at 3% down, FHA at 3.5%, VA/USDA at 0%. But that’s just the surface. How much you should actually put down depends on your financial profile, the loan program, and your long-term goals. Larger down payments often mean lower monthly payments, reduced or eliminated mortgage insurance, and stronger offers in competitive markets. Smaller down payments, however, free up cash for renovations, emergency funds, or investment opportunities.

First-time buyers in Texas often benefit from state and local down payment assistance (DPA) programs, which can come in the form of grants or second-lien loans. These programs are designed to reduce the upfront burden and make homeownership more accessible. Even buyers who don’t think they qualify are often surprised to learn they’re eligible for help.

Be sure to ask your lender if you qualify for these programs and what the trade-offs are. Some DPAs have income limits or require you to stay in the home for a certain number of years. Others may slightly increase your rate in exchange for covering thousands of dollars in upfront costs. The key is to weigh all options and see which combination of down payment, mortgage insurance, and concessions makes the most sense for you.

We cover the full range of strategies in our guide to down payments, including how much you really need, when less is more, and when putting more down gives you a strategic advantage.

14.   Who Will Service My Loan After Closing?

Another question that often gets overlooked is who will actually service your loan after closing. Mortgage brokers like LendFriend don’t service loans, and in fact most direct lenders don’t either. Instead, servicing is typically transferred or sold to large national companies whose sole job is to manage payments, escrow accounts, and customer service. That’s why the name on your monthly statement is often different from the lender who originated your mortgage.

Asking upfront whether your loan will be transferred can help you prepare for what comes next. If it’s likely to be transferred, ask which servicing companies your lender typically uses and what level of customer support you can expect. A good broker will be transparent about this process, explain how servicing transfers work, and make sure you know who to call if questions arise post‑closing.

Why Mortgage Brokers (Still) Beat Big Banks in Texas

If you’re still wondering what to ask a mortgage lender or what questions should I ask a mortgage lender, start here: “Do you have my best interest at heart, or only the products your bank offers?” Banks are limited to their own in-house products, which means you’ll only ever see a fraction of the options available. Mortgage brokers, by contrast, shop the market across dozens of wholesale lenders, giving you access to a far broader menu of solutions.

At LendFriend, we act as your advocate. Brokers have more products, better pricing, and often faster closings. That’s why, when you’re making a list of questions to ask a mortgage broker, you should include: “How many lenders do you shop?” and “Do you offer no-lender-fee options?” The answers will show you how much choice you really have—and how much money you could save.

Brokers also provide transparency and flexibility that retail banks struggle to match. Need a bank statement loan, DSCR financing, or a crypto-backed mortgage? A bank likely won’t touch those, but a broker can present multiple offers side by side. We cover the competitive edge of brokers vs. banks in more depth in our guide to mortgage brokers vs banks.

For loan officer questions to ask clients, one of the smartest is: “What’s most important to you—lowest monthly payment, lowest upfront costs, or flexibility to refinance later?” Brokers tailor solutions based on answers like these, ensuring that your mortgage isn’t just a loan, but a strategy.

Final Thoughts: Ask the tough questions upfront to make sure you're working with the right lender.

Mortgages are complicated. But asking the right questions—and having the right partner—makes the process smoother, smarter, and more affordable.

Whether you’re a first-time buyer making a list of what questions to ask a mortgage lender, a real estate agent wondering about questions to ask a lender for your clients, or a repeat buyer deciding what should you consider before deciding on a lender, the key is the same: be informed.

At LendFriend Mortgage, we believe that educating the homebuyer is the key to success. We’ll walk you through every step, answer all your lending questions, and help you move forward with confidence.

At LendFriend Mortgage, we believe that educating the homebuyer is the key to a successful homebuying process—and we’re here to help you explore every possible path to get there.

Let’s talk about your goals and figure out the best way to get you home—wherever that home may be. Schedule a call with me today or get in touch with me by completing this quick form.