Questions to Ask Your Lender as a First-Time Homebuyer
Buying your first home is one of the most exciting financial milestones you can reach. It can also feel a little overwhelming, especially once the mortgage process gets underway. Between loan types, credit requirements, and stacks of paperwork, it's easy to feel like you're learning a new language on the fly.
The good news? You don't have to figure it out alone. Asking the right questions before you commit to a lender is one of the best things you can do to protect yourself and set realistic expectations. Here's what to ask your lender as a first-time homebuyer so you can move forward with confidence.
For a broader look into the homebuying process, check out our first-time homebuyer guide.
What Kinds of Mortgage Loans Do You Offer?
Not every lender offers the same loan products, and the right loan for your neighbor may not be the right loan for you. Ask your lender to walk you through the options they have available and which ones might suit your financial picture.
Common loan types include:
- Conventional fixed-rate loans: Your interest rate stays the same for the life of the loan, making monthly budgeting predictable and straightforward.
- Adjustable-rate mortgages (ARMs): Start with a fixed rate that later adjusts with the market, which can work in your favor early on but carries some uncertainty over time.
- FHA loans: Backed by the Federal Housing Administration, these loans offer flexible credit and income requirements and lower down payment options, making them popular among first-time buyers.
- VA loans: Available to eligible veterans and active-duty military personnel, VA loans offer flexible qualifying guidelines and $0 down payment options.
- USDA loans: Designed for buyers in eligible rural and suburban areas, USDA loans also offer a no down payment option for qualifying borrowers.
What should I look for in a mortgage lender? Discover how to find the right mortgage lender for your needs.
Do You Offer First-Time Homebuyer Programs or Down Payment Assistance?
Many first-time buyers assume they need a large sum saved before they can even think about applying. That is not always true. A variety of payment assistance programs exist specifically to help buyers who are just starting out, including grants, low-interest loans, and programs tied to local associations, employers, or state housing agencies.
Ask your lender directly whether they participate in any of these programs and whether you qualify. Some are available only to buyers in specific areas or income brackets, while others are designed for veterans or members of certain organizations. Getting pre-qualified early is also worth discussing — it gives you a realistic price range before you start house hunting.
What Are Your Credit Score Requirements?
Every lender sets its own credit standards. Some require a minimum score of 620 or higher for conventional loans, while government-backed programs may accept lower scores. Asking about credit requirements early prevents you from wasting time with lenders whose thresholds you do not yet meet. If your score needs work before you apply, a lender worth working with will be upfront about where you stand and may point you toward resources that can help you improve it.
What Is the Difference Between the Interest Rate and the Annual Percentage Rate?
Your interest rate is the base cost of borrowing the loan principal. The Annual Percentage Rate, or APR, is broader. It folds in lender fees, origination charges, and other loan costs. Two loans with the same interest rate can have very different APRs depending on what fees are included.
When comparing lenders, use the APR rather than the interest rate alone to get a more accurate read on the true cost of each option. If you are considering an adjustable-rate mortgage, also ask how often the rate adjusts and whether there are caps on how high it can go.
Can I Lock In My Interest Rate?
Interest rates shift with the market, sometimes daily. A mortgage rate lock keeps your rate at a set number for a specified period so that market changes during the homebuying process do not affect your loan costs.
Ask your lender whether rate locks are available, how long they last, and whether there is a fee involved. Also find out what happens if rates drop after you lock, since some lenders offer a float-down option that lets you take advantage of a lower rate before closing.
How Much Will I Need for a Down Payment?
The often-repeated advice to put down 20% is not a hard rule. It is the threshold at which you can typically avoid private mortgage insurance on a conventional loan, but many buyers close with significantly less. VA and USDA loans offer $0 down options for eligible borrowers, FHA loans require as little as 3.5% down, and some conventional programs allow down payments as low as 3%, according to the Mortgage Reports.
Ask your lender what the down payment requirements are for each loan type you qualify for, and how your down payment amount will affect your monthly mortgage payment and interest rate over time.
Will I Need to Pay Private Mortgage Insurance?
If you put down less than 20% on a conventional loan, your lender will likely require private mortgage insurance, or PMI. This cost is added to your monthly mortgage payment and protects the lender if you stop making payments. On conventional loans, PMI can be removed once you have built sufficient equity in your home. Ask your lender about the specific requirements and process for cancellation.
Government-backed loans handle this differently. FHA loans carry their own mortgage insurance premium, while VA and USDA loans do not require PMI, though they do have other fees. Ask your lender to spell out exactly what mortgage insurance will cost in your situation and when it can be removed.
What Should I Expect to Pay in Closing Costs?
Closing costs are the fees paid to finalize your mortgage, and they often catch first-time buyers off guard. On average, they run between 2% and 5% of the total loan amount and can include appraisal fees, title insurance, origination fees, and prepaid homeowners' insurance, among others.
Federal law requires lenders to provide a Loan Estimate within three business days of receiving your application, which outlines your estimated closing costs in detail. Review it carefully and ask your lender to explain any line items you do not recognize. It is also worth asking whether any fees are negotiable or whether the seller might agree to cover a portion.
Is There a Prepayment Penalty?
If you ever find yourself in a position to pay off your mortgage ahead of schedule, you'll want to know whether your lender will charge you for it. Some lenders charge prepayment penalties when borrowers pay off a loan early, refinance, or make large lump-sum payments. Not all lenders do, but it is a question worth asking before you sign anything.
What Documents Will I Need to Apply?
Gathering paperwork in advance keeps the process moving and reduces the chance of delays. Most lenders will ask for recent pay stubs, W-2 forms from the past two years, federal tax returns, bank statements, and documentation of any existing debts. Ask your lender for a complete document checklist early so nothing holds up your application or pushes back your closing date.
Buy Your First Home with Wright-Patt Credit Union®
Mortgage Options and Education Resources
Wright-Patt Credit Union® (WPCU®) offers a full range of mortgage options, including FHA, VA, USDA, and conventional loans. Beyond financing, we provide free homebuyer education resources, on-demand Mortgage Learning Modules, and financial calculators to help you plan with confidence before you ever submit an application.
What to Expect from the WPCU Mortgage Process
Our mortgage process is designed to be transparent and communicative from start to finish. It begins with an initial conversation where your Mortgage Loan Originator reviews your goals, identifies loan products that fit your situation, and walks you through interest rates and fee structures. From there, you submit your application and supporting documents. WPCU then orders a credit report, appraisal, and title work before submitting your file to an underwriter for review.
Underwriting is the stage where your income, assets, and the property itself are formally evaluated. Approval generally takes 48 to 72 hours, though heavier loan volumes can extend that timeline. Once approved, WPCU prepares closing documents and coordinates with the title company to confirm your final closing costs. For a purchase transaction, plan on at least 45 to 60 days from application to closing.
No matter where you are in the process, our WPCU Mortgage Loan Originators are always available to answer questions and make sure you feel supported every step of the way.
A Lender That Puts Members First
At Wright-Patt Credit Union, we believe buying your first home should feel exciting, not stressful. As a member-owned, not-for-profit credit union, we return value directly to the people we serve through competitive interest rates, low-to-no fees, and extraordinary service. We look at the whole picture, not just a credit score, and we have a history of helping buyers with complicated financial situations find a path to homeownership.
Ready to Get Started?
Call (937) 912-7000 or (800) 762-0047 ext. 7680 and ask to be connected to a helpful Mortgage Originator today. You can also visit your nearest Member Center or apply online.
Questions to Ask Your Lender First-Time Homebuyer FAQs
How do I know if I am ready to buy a home?
A few positive signs include a stable income, a manageable debt load, and enough savings to cover a down payment and closing costs without fully depleting your emergency fund. Speaking with a lender early can help you get a clear read on where you stand before you start house hunting.
What is the difference between prequalification and preapproval?
Prequalification gives you a general estimate of how much you may be able to borrow based on information you self-report. Preapproval goes further. Your lender verifies your income, assets, and credit history and provides a more accurate loan figure. Sellers often prefer buyers who are preapproved because it signals that financing is more likely to come through.