A mortgage broker is an independent mortgage specialist who, in short, negotiates with lenders on your behalf – ensuring you secure the best mortgage product and rate possible. As you shop around for the right broker for your unique needs, be sure to ask these seven key questions:
1. Do You Charge a Fee for Your Services?
Mortgage brokers typically do not charge for their services as they (the broker) are generally paid by the lender. However, you may be subject to origination fees, so be sure to ask in advance.
2. Can I Be Pre-Approved for a Mortgage Loan?
Having a mortgage pre-approval in hand before you hit the market is essential as it outlines how much home you can reasonably afford and ensures you’re taken seriously by sellers. Your broker will assist you with the pre-approval process and help you secure a locked-in rate.
3. Will You Be Able to Help Me Save Money?
Here again, it’s your broker's responsibility to negotiate with lenders on your behalf, and, as market experts, they know which mortgage providers deliver the best products. Brokers are also able to secure great deals and, thanks to the relationships they’ve forged with the lenders, they’re also privy to special rates.
4. Should I Go With a Fixed or Variable Rate?
When it comes to choosing the right mortgage rate for your unique situation, there is no one-size-fits-all solution. Your broker will carefully assess your needs and work with you to decide which rate will best help you reach your long-term goals.
See our previous post: Fixed vs. Variable Mortgage Rates: Which is Better?
5. What Sort of Prepayment Privileges Can I Expect?
Prepayment privileges give you the ability to pay more than your regular mortgage payment, ultimately allowing you to pay your loan off faster. These privileges may come in the form of large annual lump sum payments, increased monthly payments, or both. Your broker will help you find the right product with the right privileges for your needs.
6. Will There Be Penalties for Prepayment or Breaking My Mortgage Early?
Most lenders charge a penalty for breaking your mortgage loan early or for paying it off quicker than expected. Ask your broker how much the penalty will be in either scenario and what the terms are for prepayment.
7. What About Closing Costs?
Hidden costs of buying a home include appraisal fees, home inspection costs, legal and administrative fees, taxes, insurance and more. These additional expenses, also known as closing costs, will need to be paid before the purchase of your home can be finalized. Your broker will go over these fees with you ahead of time, so you know what to expect.
Find out how the Edmonton Broker can help you reach your mortgage goals! Fill out our quick and easy online application form today!
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