8 Essential Questions to Ask a Mortgage Broker -

If you’re in the process of buying your first house, it can be very stressful. Finding the best deal for your mortgage can be a bit of a minefield. Not only does it take time, but you also need to get it right.

Fortunately, there is an easier option than having to go around all of the banks to find out the best rates; you can hire a mortgage broker to help with the mortgage application process.

But what are the essential questions to ask a mortgage broker before you hire them?

In this helpful guide, we’ll talk you through some of the things you need to find out.

What’s Your Availability?

If you’re buying in a seller’s market, competition will be tough. You’ll need to work quickly if you’re to submit an offer that’s likely to get accepted. Often, your offer will need to be backed with a letter from your mortgage broker indicating that you’ve been pre-approved for a home loan.

While a pre-approval letter can be quite general, they’ll pack more of a punch when they’re created for a specific property.

This means that your mortgage broker will need to be available for you when you need them to quickly provide you with an immediate pre-approval letter.

Find out whether your mortgage broker is only available from nine to five or whether they’ll answer their phone on evenings and weekends too.

If you’re wondering how to find a mortgage broker, you can check out the best brokers here.

What Costs Should I Expect?

When you’re applying for a mortgage, you need to factor in so many different financial equations. You’ll need to think about the deposit that you have available, how much your conveyancing fees are going to be as well as your moving costs.

You’ll also need to factor in how much your mortgage broker will take as a fee.

Your mortgage broker should be able to tell you upfront exactly how much you can expect to pay for their services. They should also be able to help you with all of the other aspects of your budgeting,

How Much Do I Qualify to Borrow?

Before you can start going out hunting for a new house, you’ll need to know how much you’ll be able to spend. Your mortgage broker should be able to help you out here.

When working out how much you’ll be able to borrow, your mortgage broker will carry out a series of affordability checks to work out how much you can afford.

There are several factors that go into this. These include your income, employment status, current debts, any problems you’ve had with your finances in the past, and how good your credit score is currently.

What Should I Avoid Doing While My Loan Is Being Processed?

Before you jump into one of the biggest financial commitments you’ll ever make in your life, you’ll need to find out what you should and shouldn’t be doing while your loan is being processed.

Get some advice from your mortgage broker about what you should avoid doing. This may include not quitting your job and not taking out any new loads during the processing time.

How Long Will It Take to Close?

One of the most nerve-racking things about buying your first house is waiting for the sale to close. There are lots of factors that can slow things down. For instance, your survey or the searches on the property could be time-consuming.

Speak with your mortgage broker to find out how long you should expect all of these things to take and when you can expect to move into the house. The seller will also no doubt be quite keen to find out when the sale will close too.

What Does the Mortgage Loan Application Process Involve?

When you’re applying for a mortgage, you’ll need to provide lots of documentation. You’ll need to provide your lender with proof of income, identification, bank statements, as well as your credit report.

You’ll need to provide them with tax returns, letters to corroborate any cash gifts you’ve received, and a two-year rental history.

Depending on your own financial situation, there may be additional documentation required.

What Will My Interest Rate and APR Be?

Your interest rate will be largely dependent on your credit score; however, your down payment, loan, and the type of property you’re buying will also play a part in determining it.

Something that is out of your control is the fluctuation of interest rates.

Your APR will include your interest rate as well as any fees. It doesn’t include property taxes, per-diem interest, or insurance. The lower the APR rate, the less you’ll pay over the length of your mortgage.

What Happens If My Circumstances Change

Change happens, and your financial situation may alter throughout the life of your home loan.

A good broker will be able to offer you advice from the start of your application right through until the end. It’s essential to find out whether you have the flexibility to change loans and if they can help you do that.

Take into account different mortgages

You might feel that the following mortgage terms are a bit mind-numbing. To start with, the least you need to know is that there are particular kinds of loans for the borrowers:

Borrowers with military connections (Veterans Affairs loans)
The ones who live in suburban or rural areas (U.S. Department of Agriculture loans)
The ones with lower credit scores (Federal Housing Administration loans)
The ones for seniors age 62+ (HECM loans by the Federal Housing Administration loans)
When purchasing a house that is a lot or a little more expensive compared to the standard loan guidelines (jumbo loans)