Five Crucial Questions to Ask Your Mortgage Broker – ListDen

House buying has never been so easy. With a myriad of mortgage programs prevailing in the market, any individual with a good credit score and a stable income can avail of residential loans today. However, considering the fact that you will have to commit years of your life towards paying it back, you have to do enough research to find the right type of loan for you.

Whether you are purchasing a home or refinancing, here is a list of essential questions you should ask your broker before making a final decision:

Q1 – What type of loans can you provide me?

Knowing that there are a variety of loans, you have to ensure that your broker helps you match the right type for your situation. You can do that by asking the broker what kind of lenders they are in contact with and what mortgage options they offer.

Usually, all lenders offer both fixed-rate and adjustable-rate mortgage but very few of them give flexible interest rates and loan terms. So, you better try to get clarity on such things to find a suitable loan.

Q2 – What will be my interest rate?

This is the most important question that every individual seeks an answer to. Although the mortgage interest rates remain standard throughout the industry, it can fluctuate due to changing trends or any new rules passed by law enforcement.

The rate may even differ depending upon your credit score and financial history. However, you can confirm for ‘rate locks’ (if any) that will protect you from sudden market fluctuations for a certain time period.

Q3 – How much down payment am I supposed to pay?

Generally, individuals seeking mortgage options have to pay a 20% amount of the total loan estimate. However, it is not obligatory. If you are well-qualified and have an excellent credit score, you can easily get away by paying only a meager 3% down payment.

There might be certain pros and cons pertaining to such low down payments; that is why it is advised to discuss everything out with your broker first.

Q4 – Are there any additional costs involved?

The loan costs don’t just include the monthly interest payments, but all the other vendor’s fees as well. That may include origination fees, credit report, the title policy, escrow (if applicable), recording fees, taxes, and much more.

Therefore, be upfront of the total estimated cost with your broker and double-check for any hidden costs before you apply for the loan.

Q5 – What will be my loan processing time?

Your broker should tell you unhesitantly the maximum time that your loan processing would take. Normally, the purchase loans close in thirty days or less and refinancing application gets sorted quicker than that as there is no home inspection involved.

Determining your average loan processing time is particularly important if you are a buyer and you want to invest in your much-desired property soon.

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