4 Questions to Ask a Mortgage Broker (Part 2)

Are you considering working with a mortgage broker? If so, you must ask the right questions to ensure you know exactly what you are getting into! In this article, we’ve listed four questions you should ask your Whitby mortgage broker.

1. Is this mortgage a standard mortgage or a collateral mortgage?

It is essential to be clear on whether you are looking at a standard or collateral mortgage.

With a collateral mortgage, you can obtain a loan (usually a home equity line of credit or HELOC) based on the value of your home. This is handy if you want easy access to a HELOC. However, moving this type of mortgage to another lender can be challenging and expensive.

With a standard mortgage, you are not automatically eligible for a HELOC. This type of mortgage is a better choice if you do not want a HELOC or want to be able to change lenders more easily.

2. What type of lender is the best for me, considering my financial situation?

There are several different kinds of lenders for getting a mortgage, such as banks, credit unions, and private lenders. Don’t think that you won’t be able to obtain a mortgage just because you have poor credit or you do not have a large down payment available.

Our Whitby mortgage brokers will explain the different types of lenders we work with and the types of mortgages and interest rates you will be eligible for. That’s one of the best things about working with a mortgage broker: you have someone to help you understand the complicated process of obtaining a mortgage!

3. Does the amount of down payment I can provide affect the interest rate I’d be eligible for?

In general, the amount of down payment you can provide should not impact the interest rate you will be eligible for. Depending on the price of the house that you are interested in, you may be able to put down as little as 5% of the purchase price!

Fortunately, your Whitby mortgage broker can explain how much of a down payment your dream home will require and how mortgage insurance works.

4. Where do you think mortgage rates and housing prices are headed?

While a Whitby mortgage broker cannot predict the future with complete accuracy, they should be knowledgeable about past trends (in both mortgage rates and housing prices) and thus be able to provide you with their thoughts on where things are headed for the future.

A good mortgage broker uses various information—such as predicted government policies and neighbourhood trends—to help give their client an idea of what the future may hold.