Questions You Should Ask Your Mortgage Broker Before Signing Up
When looking for a mortgage or just getting started, it is essential to be informed and ask your broker questions beforehand. Being well informed will give you peace of mind during the application process and allow for easier decision-making.
Before looking at homes, it’s wise to first get preapproved for a mortgage. This will give you an estimate of how much money you can borrow and the type of loan available. While this doesn’t guarantee approval from a lender, it will give you some insight into their commitment level regarding approving your application.
The mortgage market is highly competitive, so it’s wise to shop around and consider all lenders and their offerings. A mortgage broker can provide quotes from multiple lenders, which may be invaluable in finding the best rate possible.
Additionally, you may wish to inquire if your bank offers special financing options such as home affordability programs, mortgage points or VA loans. If so, chances are good that a nonbank lender will.
What type of mortgage is right for me?
Your mortgage is one of the biggest purchases of your lifetime, so it’s essential to make an informed decision. Your mortgage advisor can guide you through all the products and options available so that you find one that meets all your requirements.
Does Your Company Offer a Fixed-Rate or Adjustable-Rate Mortgage?
Most banks provide both types of mortgages, though the terms and rates may differ between lenders. Where you live could influence how much money you save on monthly payments by switching lenders.
What are the down payment requirements for my mortgage?
As a first-time homebuyer, it’s wise to research the down payment requirements before signing your loan contract. Doing this will allow you to calculate how much money needs to be saved toward a down payment and ensure that the loan you choose meets your affordability needs.
How long will it take to close?
A home purchase can be a lengthy and complex process. Ask your mortgage lender what the closing process will involve so you have an estimate of how long it’ll take and any associated fees. They should be able to give you an accurate timeline for when closing will occur.
Are you a government-regulated or private lending company?
Mortgages in Canada are regulated by the Canadian Securities Administrators (CSA). That means your mortgage broker must abide by all CSA rules and regulations to guarantee your rights are safeguarded.
Do You Have an Escrow Account?
Many mortgages require the use of an escrow account, which holds funds to cover prepaid property taxes and insurance premiums. It’s a great way to budget for these expenses and prevent being hit with unexpected costs in the future.