Here are some important questions that we recommend asking a mortgage broker before shopping for a new home. They will help find a lender that’s best suited for you and your unique needs.
What are your qualifications as a mortgage lender?
Ask your mortgage lender how long they have been doing mortgages for. The more experience a lender has, the better prepared they will be to handle any situation and avoid costly mistakes. It is also a good idea to clarify if the lender specializes in mortgages, like a mortgage broker, or if they are a generalist who sells other financial products, like a financial advisor. If a generalist is the case, they may not process mortgage applications regularly and not be up to date on new policies. A mortgage broker with over five years of experience will be able to process your application promptly and answer all of your questions in an uncomplicated manner.
What type of mortgage should I consider?
If you talk to a lender for the first time and they quote a rate without taking the time to ask about your needs, you may have picked the wrong lender. A lender needs to determine the mortgage product that is best suited for your situation and life goals. Choosing the proper options and term could save you more than a small difference in rate. When a lender quotes rates without knowing a client’s circumstances, they are doing that client a disservice.
Am I pre-qualified or pre-approved for a mortgage?
Not all mortgage lenders take the time to properly pre-approve their clients. Being pre-qualified vs pre-approved could cost you your new home. A mortgage pre-qualification allows a buyer to get an idea of what they may qualify to purchase, without having supporting documents reviewed or a credit bureau pulled. We usually don’t recommend getting a mortgage pre-qualification. There could be unknown issues with your credit or inconsistencies with income and payment amounts. It is better to take it one step further and get pre-approved. A mortgage pre-approval is similar to a pre-qualification in that the buyer has an idea of price range to shop in, but supporting documents are provided and reviewed upfront. Supporting documents allow the mortgage lender to verify all of the information and make sure it is correct. It is also a requirement to have a credit bureau pulled to make sure all of the monthly payments are correct, and the credit is satisfactory.
What is your availability and the best method to reach you?
Lenders outside a bank setting typically operate independently and can offer 24/7 service. This includes mortgage specialists and mortgage brokers. A lender should provide different ways to communicate, via phone, email and texting. You don’t want to work with a mortgage lender that can’t accommodate your schedule and is difficult to reach.
Are there costs to process my mortgage application or any fine print on the contract?
Sometimes there are extra costs to process your mortgage application. One of the common ones when applying for a mortgage through a major bank or broker is an appraisal fee. These costs make up part of your closing costs when purchasing a home. Looking at the fine print on a mortgage contract is essential. It sometimes includes clauses such as “the sale-only clause,” meaning the only way you can break your mortgage is by selling your home. It can also come with refinancing or portability restrictions. Make sure you are comfortable with the fine print before signing on the dotted line.
For some, a home is the most significant purchase of their lives. It’s essential to work with a mortgage lender that is experienced and can provide exceptional service. Contact The Biggar Team and see what sets us apart from everyone else!