What questions did you ask your mortgage broker? As you may remember I’m in the process of buying my first home. At 36 years old I think it’s finally time to make the commitment to buy a place to call my own. You know what they say, better late than never. To be honest, the thought of spending hundreds of thousands of dollars completely terrifies me, but the idea of having my own space (and peace and quiet) is very exciting.
In two days I’m meeting with a mortgage broker to get a pre-approval. This will give us (my spouse and I) an idea of how much the bank is willing to lend us for a mortgage loan. Although I already have an idea of the purchase price we can afford because I’ve spent countless hours using mortgage calculators and searching For Sale Listings in the area where we want to live.
Having a mortgage loan pre-approval – also know as the prequalification – is the first step in the homebuying process. From there we can tell our real estate agent the purchase price range and she can begin trying to find our dream home. I’ve come up with a list of questions to ask your mortgage broker before committing to work with one particular agent.
If you’re buying a home here are five questions to ask your mortgage broker:
Do you have allegiance to one lender?
Some mortgage brokers work with only one bank and some others can shop around for the best rates among several different lenders. Our mortgage broker only works with one bank and that’s OK because it’s our primary financial institution. It’s important to find the best rate on the market, but it’s also important to trust and have confidence in the lender.
When is the best time to buy a home?
This is a good question to ask your mortgage broker because they can anticipate promotions. We’re applying for the mortgage loan pre-approval now and plan to move May 1, 2017. The mortgage broker advised to use the pre-approval as a starting point and expect rate discounts in the spring because lenders often lower rates to entice shoppers during prime homebuying season.
What happens if rates drop?
A pre-approval is based on current rates, but until an offer to purchase a home is made the rate is not locked in or guaranteed.
Can we make pre-payments?
The type of mortgage loan you commit to is very important because it sets the terms for the life of the loan. Talk with your mortgage broker about the different types of loans available such as fixed rates and adjustable rates.
Are fees included?
There are so many more costs to buying a home than the down payment, purchase price and monthly payments. Homeowners need to also pay for inspection and appraisal fees as well as closing costs i.e. notary fees. Negotiate with your mortgage broker to have some or all of these costs covered by the lender. Inspection, appraisal and closing costs i.e. notary fees.
If you’re a homeowner what questions did you ask your mortgage broker?