Asking the right questions when you visit a mortgage broker helps you to get the results desired. But, sometimes knowing what to ask can be difficult, especially if you’re not familiar with home buying. So, how can you avoid asking the wrong questions?
Mortgage brokers say the key to finding the right broker is to ask about their experience and quality of service. By asking these types of questions, you can ascertain whether or not a mortgage broker will be an asset. In addition, you’ll determine if you work well together.
After all, it’s better to apply for a mortgage once and get it right, rather than apply multiple times. Why? Well, multiple applications can have an adverse effect on your credit rating.
Bearing these facts in mind, what are the right questions to ask a broker?
Question 1. What are your qualifications?
Taking out a home loan is a long-term commitment and a large financial risk. Therefore, you want to know that you’re receiving the best possible advice. Plus, the home loan needs to suit your needs and should save you more. As a consequence, by asking a broker about their qualifications and experience, you can determine if they are knowledgeable.
It’s also a good idea to ask about on-going training, as the mortgage brokering industry and lending standards change frequently. Consequently, and a good broker will keep their knowledge up-to-date so that they can offer you the best advice possible.
Question 2. Do you charge for your service?
Most mortgage brokers are paid by lenders when they secure a home loan. As a result, they typically don’t charge for their services. However, not all operate this way. Hence, it’s important to ask if they charge, otherwise you may discover that you have to pay them a fee.
Question 3. What can I afford to borrow?
An experienced mortgage broker will look critically at your income and debts. Furthermore, they’ll consider the number of dependents that you have to determine what you can and cannot afford to borrow. By understanding your financial commitments, a mortgage broker can then find you a manageable loan that won’t stretch your finances.
Question 4. What is the best available rate?
A good mortgage broker will give you a range of options. These should include several appropriate home loans with the features you want at the lowest rate available to you from their panel of lenders. Although, if your broker only gives you low rate options, without features, then look for a broker that’s more knowledgeable.
Question 5. What fees are associated?
All home loans incur fees and charges. As a result, by asking what these costs are upfront will give you an idea of any ongoing expenses. Furthermore, you also need to ask your mortgage broker about any long-term savings using home loan features. An offset account or redraw facility are ideal for reducing the amount of interest paid. While these features may push up home loan fees over time, they can save you thousands.
Question 6. What happens if my circumstances change?
When you take out a home loan, this is over 30-years, and a lot can happen during this time. For instance, you may get married, have children, and change employers. You may even buy a business and become self-employed. Though, a good broker can offer you advice from the start of your home loan to the end. This course of action may mean adjusting your loan to suit your needs, so the best product fits your budget. Alternatively, you could wait until better circumstances present themselves to take out a home loan.