When you apply for a mortgage, the lender assesses its risk to determine whether to loan you money. Along with the questions they’ll ask you, you’ll also want to ask a few of your own: about application requirements, the mortgage rate, the total monthly payment you can expect and a timeframe for closing.

Here, we’ll cover some questions you should ask — as well as questions the lender will ask you — when you apply for a home loan.

Key takeways

  • When shopping for a mortgage, ask each lender to detail their requirements, annual percentage rate (APR) and fees.
  • Be prepared to answer questions regarding your income, debt, down payment amount and more. You'll need to back up your answers with documentation.
  • Lenders aren't allowed to ask questions regarding sexual orientation, medical history, disabilities, political or religious beliefs and plans for family expansion.

Mortgage questions to ask lenders

What type of mortgage do you recommend for me?

There are several types of mortgages, including conventional loans and FHA loans. Talk with your lender or loan officer about the type of mortgage they recommend based on your needs, credit and finances.

What is the minimum down payment requirement?

While you might think you need a down payment of 20 percent, the truth is, many mortgages require far less than that. Ask your lender about down payment requirements, and, if you’re a first-time homebuyer, about any special programs.

What interest rate do I qualify for?

Lenders are required to disclose the annual percentage rate (APR) for a given loan. When you get a quote, make sure you understand the difference between APR and interest rate, and what fees factor into the APR.

What will my monthly payments be?

If you’re shopping for rates but not ready to apply for a mortgage just yet, ask the lender to calculate your monthly mortgage payment based on the quote it provides. (When you actually apply, you’ll receive a loan estimate spelling out these details.) This can help you better understand your homebuying budget.

Do you offer prequalification and preapproval?

Best for borrowers preparing to buy a home, getting prequalified helps you understand what you might qualify for if you were to apply. Many lenders offer no-credit check prequalifications, but be sure to clarify this before you agree to it.

When you are ready to buy, you’ll need to get preapproved so you can make offers on homes. While a preapproval isn’t a commitment to lend, it’s a good indication you’ll get the loan you need when the time comes. For a preapproval, you’ll need to hand over financial documentation and undergo a credit check.

Is mortgage insurance required?

For a conventional or FHA loan, you’re required to pay mortgage insurance premiums if you put down less than 20 percent. This insurance is an added cost that could stretch your monthly budget.

Note: Some lenders offer “no-PMI loans,” which eliminate these premiums in exchange for a higher interest rate. Depending on how long you plan to live in the home, it might or might not make sense to accept the higher rate.

How much are closing costs?

Closing costs include lender and third-party fees, such as for the appraisal and title services. Ask your lender for their origination fee, credit check fee and other costs. This’ll help you prepare financially and avoid surprises at closing.

Mortgage questions lenders ask

Expect mortgage lenders to ask about everything from the type of loan you need ​— are you buying a home or refinancing? — to how fast you’d like to close and whether you’ll get the loan with a co-borrower. The big questions include:

What type of property is this for?

The lender needs to know the type of property you hope to finance and what you intend to use the home for. That’s because there are different rates and requirements for different properties. For example, you might need a bigger down payment to qualify for an investment property loan.

Documents to provide:

  • Home purchase agreement

What is your employment status and income?

If you’ve been steadily working with the same employer or in the same industry for two or more years, this can be an easy question to answer. However, if you’re self-employed or a contract worker, you’ll need to supply more documentation, like profit and loss statements from your business or 1099 forms if you work on a contract basis.

Documents to provide:

  • Pay stubs from at least the past 30 days
  • Tax returns (including W-2s and/or 1099s) from the past two years
  • Employer contact information
  • Business records if self-employed
  • Other income sources such as bonuses, child and/or spousal support, disability or VA benefits, pension, Social Security or other sources

What recurring debts do you have?

In general, lenders look for a debt-to-income (DTI) ratio of no more than 36 percent. That means you want your monthly debt payments — including your mortgage, car loan, credit card and student loan payments — to account for less than 36 percent of your pre-tax income.

Note: If you’re applying for a conventional loan and have 10 or fewer payments left on one of your debts, you might not need to provide documentation about it. Your loan officer can help clarify exactly what you need to furnish in this case.

Documents to provide:

  • Credit card statements from the past 60 days
  • Student loan statements from the past 60 days
  • Auto loan statements from the past 60 days
  • Personal loan statements from the past 60 days

Do you have savings or other assets?

Savings (not including your down payment) or other assets can help strengthen your mortgage application. While you likely won’t be required to have a certain amount set aside, your lender still needs to know your complete financial picture.

Documents to provide:

  • Bank statements from the past 60 days, including for checking, savings and money market accounts (MMAs)
  • Retirement account and pension plan statements
  • Brokerage account statements
  • Documentation related to other properties you own, if applicable

How much are you putting down?

In general, the larger the down payment, the better the interest rate.

Keep in mind: If you plan to use a down payment gift from a family member or friend, you’ll need that money in your account at least two months’ prior to applying for the loan.

Likewise, if you’re seeking down payment assistance, you’ll likely need to take a homebuyer class. Ask your lender if you’re eligible for down payment help and what the requirements are.

Documents to provide:

  • Bank and brokerage statements
  • Down payment gift letter, if applicable
  • Documentation related to down payment assistance or grants, if applicable

Questions a mortgage lender should never ask

While the list above might make it seem like mortgage lenders can ask you anything they want, there are some legal limits, according to Darrin Q. English, senior community development loan officer for Quontic, an online bank. These questions, says English, are on his “do not ask” list (and that of any law-abiding lender):

  • Sexual orientation
  • Disabilities
  • Family expansion plans (a lender can ask how many children you currently have and their ages, but they can’t ask if you plan to have more or discriminate based on familial status)
  • Political or religious beliefs
  • Medical history

In addition, although a lender can gather factual information about some things (your gender and marital status), under the Fair Housing Act and the Equal Credit Opportunity Act, it can’t discriminate based on race, religion, color, age, marital status, sex or national origin. There may be other protected classes enforced by your state, as well.

What to expect after you apply for a mortgage

Hurry up and wait. The preapproval tends to come fairly quickly, but you won’t get final approval until you actually have an accepted offer on a home and have successfully gone through the appraisal and underwriting process. In general, it takes around 30 to 45 days to close on a mortgage loan, assuming no hiccups.

Once you’ve applied for the loan, avoid making big purchases or financing anything else until the closing. Major financial moves can affect your credit score, as well as increase your DTI ratio, making you a riskier prospect. This might require resetting the underwriting process, or could mean your application gets denied altogether.