Getting a mortgage can be an exciting and stressful time. Having a mortgage broker to walk you through it can help relieve your anxiety and simplify the experience. Here are some of the most important questions you should ask your broker.
1. How long have you been in the business?
The mortgage industry is competitive. You’ll want to work with a broker who has several years of experience, which equates to good connections with various lenders.
2. Can I get pre-approval?
Knowing how much you might be able to get from a mortgage is key to helping you find a home that fits your budget. If you provide your broker with some details about your income, credit, etc., then they can offer you pre-approval information.
3. What lender is best for me?
One of the best reasons to use a mortgage broker is their ability to find the best lender for your situation. Finding a lender with the least amount of risk, who is willing to work with your financial situation, and offers the best terms and conditions is the goal of your broker. You’ll be with this lender for several years, at least until your mortgage is up for renewal. So, pick wisely.
4. How does the approval process work?
Working with a mortgage broker means having someone guide you through the application and approval process. Be sure you understand the steps involved, how long it will take, and what you can expect.
5. How does your lender’s product compare to non-broker ones?
A mortgage is a big commitment of your time, money, and resources. You’ll want to shop around and know you are getting the best deal. Your broker should be able to explain to you why their lender’s mortgage is superior to other ones you may come across. If the product they recommend is not better than the non-broker option, then they should be honest with you.
6. What interest rate will I get?
Your mortgage interest rate will have a significant impact on how much money you will pay over the life of your loan. The higher the rate, the more it will cost you in the end.
7. Are there hidden costs?
You should expect some extra fees and expenses if you are applying for a mortgage. It is essential to know what these are so you can plan for them. Some of the hidden fees may include:
- Appraisal fee
- Credit pull fee
- Land transfer fee
- Lawyer fees
- Title registration
- Home inspection
8. How much should I have for a down payment?
Talk to your broker about your down payment. While many people assume that they will get a better rate if they put a lot towards the down payment, this may not be the case. In Canada, you can obtain a mortgage with as little as 5%.
9. Are there prepayment penalties?
Paying off your mortgage early might cost you fees, which is why you’ll want to know about prepayment penalties on your mortgage.
10. What happens if I break the mortgage?
Life can throw you curveballs, and you should be ready to deal with any situation. As a homeowner, you will not likely have to break the mortgage, but knowing the consequences is essential.
If you are interested in learning more about mortgages or mortgage brokers in Toronto, call Northwood Mortgage™ at 888-492-3690 or contact us here.