Buying a house is one the biggest investment you will ever make. Period. Hence by spending the time and effort to find the best mortgage rate is essential in keeping your costs down, but more importantly help you meet your monthly mortgage repayments, and stay within your budget. This is where a knowledgeable mortgage broker can really help you find the best mortgage that works best for you. But before you sign anything, below are 5 simple questions you need to ask any mortgage broker.
1. What is the best interest rate I can get?
A broker earns his living or commission from financial institutions he or she can successfully sign you up with. Hence, you want to ask what is the best rate (and the best package) for your circumstance. Of course, the lower the interest rate, the better off you will be. However, before you decide, make sure the mortgage does suit you day to day living. As well, you want to make sure he is in tune with the mortgage market and acting on the best interest on your behalf. A good broker will keep you updated on rates as they change.
2. What are the Fees Involved?
In most cases, your broker will not charge you any fee, but the lender will. Therefore, make sure you get a clear idea on what kind of fees that will need to paid out. Better yet, request the broker to summarize it in detail, and offer comparisons on not just the interest rate but the associated closing costs, and any ongoing fees.
3. Can You Pay Extra on Your Monthly Mortgage?
Without question, adding an extra amount to your repayments can get you ahead of your loan. Hence it is a good idea to request for that flexibility without incurring any extra cost. This is a critical question, and one that can save you plenty of money in the long run.
4. Can You Fix Your Mortgage Rates?
Depending on how the economy is going, mortgage rates do tend to go up or down. Therefore, in a rising market you want to be able to fix you rate without paying more. Make sure you have the flexibility within your lending to switch between fix and variable loans, and without incurring any fees.
5. How Much is The Deposit?
In today’s housing market, a minimum of 20% deposit is required. But with some packages, some lenders may ask for as little as 3 to 5 percent, but you are expected to pay a mortgage insurance fee as a result. Again this will boil down to your financial serviceability. So sit down with your broker and assess the best kind of mortgage for you. Your mortgage broker will be able to guide you on the best approach.
So before you sign any paper work with anyone, have a clear idea on your responsibility and the fees that will be incurred with your loan. With such a big investment, you do not want to have any surprises that will leave you stresses and unable to repay the loan. In a nutshell, take your time and ensure that your mortgage broker has a clear idea of your requirements.