In this guide — 6 things to check
Understand who you are working with
A direct lender makes the mortgage loan. A mortgage broker helps you find a lender and loan option. Some companies perform both roles, so ask who will fund your particular transaction. The label alone does not determine which offer fits your needs. CFPB: brokers and lenders
Ask which lenders or programs the broker considered and how the broker is compensated. Compare the actual proposals yourself; access to several lenders does not automatically establish that a broker's recommendation is the least expensive option. FTC: mortgage shopping
Check the individual and the company
Look up the loan originator and business through NMLS Consumer Access. For a California Department of Real Estate licensee, also check the DRE license lookup. Match the name, company affiliation, and identifiers to the person you are speaking with. DRE explains how its mortgage-loan-originator endorsements and sponsorship records work. DRE: MLO endorsements
Keep the results with your comparison notes. A number in an email signature is a starting point for that check, not a substitute for looking at the current record.
Compare the same loan scenario
Give each provider the same property price or value, down payment, intended occupancy, and requested loan type and term. Ask for proposals close together in time so you can understand differences without mixing several changing assumptions.
For most purchase and refinance mortgages, a Loan Estimate organizes the proposed costs. It does not itself mean the loan has been approved. HELOCs and reverse mortgages use different disclosures; reverse-mortgage shoppers also receive a Good Faith Estimate. CFPB: Loan Estimates
Compare these items side by side:
| Item | What to ask |
|---|---|
| Rate and loan term | Are both offers based on the same structure? |
| Points and lender credits | What are you paying upfront, or trading for lower closing costs? |
| Monthly housing expense | Are mortgage insurance, property taxes, insurance, and applicable dues accounted for? |
| Closing costs and cash needed | Which amounts are lender charges, and which are estimates for other expenses? |
| Conditions | What could still change the offer? |
Lower estimated taxes or insurance do not mean a lender has offered a cheaper loan. Ask why those assumptions differ. CFPB: comparing offers
Discount points generally exchange more money upfront for a lower interest rate. Lender credits generally work in the opposite direction. Ask to see the tradeoff over the period you expect to keep the loan. CFPB: points and credits
Ask what the preapproval actually includes
Prequalification and preapproval terminology varies among lenders. Neither label, on its own, guarantees a loan. Ask what information has been verified and what assumptions support the letter. CFPB: preapproval and prequalification
Useful follow-up questions include:
- Which income, asset, and credit documents have you reviewed?
- Has an underwriter reviewed the file, and what remains outstanding?
- What property or appraisal conditions will still apply?
- How should I handle a change in purchase price or financing plans?
Keep the answers with the letter so you and your real estate agent understand what it supports.
Bring the property into the conversation early
Ask how the proposed financing addresses the home's condition, insurance, occupancy, and any planned work. For an ADU project, identify the permitting authority before treating a financing discussion as a construction plan. County Planning & Building oversees unincorporated areas; a property inside an incorporated city requires checking with that city's authority. The county provides an ADU screening and permit process. SLO County Planning, county ADU information
For a specialized loan, ask the broker to explain why that program fits, what alternatives were considered, and which details could make it unsuitable.
Agree on communication and the rate-lock plan
Identify your main contact, how updates will arrive, and who handles time-sensitive questions. Ask what the team needs from you and when.
A rate lock depends on its expiration date and application assumptions. Confirm the lock status, length, extension costs, and what happens if the closing is delayed or your loan details change. CFPB: rate locks
Before choosing, you should be able to explain the recommended loan in your own words. If you cannot, ask for another walkthrough.
