4 questions you should ask your mortgage broker
If you’re using a mortgage broker to either make a purchase or refinance your home, you may have one question in mind—what’s the best interest rate you can get me?
While rate obviously matters, there are many other factors to consider. Talk to your broker about the value they bring as well as the benefits of the mortgage they are recommending. When it comes to a large investment like a mortgage, you need to make sure you are making the best possible decision.
Here are some questions you should ask your broker:
1. What sets you apart from other brokers and lenders?
It may be the long-term relationship they offer or the number of lenders they work with. Whatever their advantage may be, the broker industry is competitive, so you have options when it comes to choosing the one that’s right for you and your situation.
You could also ask for testimonials or referrals to ensure that the broker’s past clients are happy with their work.
2. Why do you recommend this product?
One of the benefits of using a broker is access to products from a variety of lenders. When your broker presents you with your options, it’s important to know what the benefits of their preferred lender are, how flexible their payment options are and whether they get a higher commission from one lender versus another.
3. What are my closing costs?
While people usually save for a down payment, they may not account for their closing costs which can be anywhere between 1-4% of the purchase price of the home. Discussing your closing costs with your broker upfront will help you have realistic expectations of your budget.
4. What is my exit strategy?
Think of your mortgage in terms of your larger financial plan—it’s important to know the quickest way to pay it off and how you can reduce your borrowing costs. Talk to your broker about your prepayment options, the portability of the mortgage and penalties of breaking it.
What other questions do you think are important to ask your broker? Share it with us in the comments!