Questions You Must Ask Your Mortgage Broker

Just how stressful is the house-buying process? Going by a recent study, Canadians rate buying a house as the second most stressful thing they have to do in life. 

However, with some professional help, buying a house can be easier, faster and even enjoyable. One of the professionals that help things along is mortgage brokers. These are a go-between between lenders and yourself, finding and negotiating the best rates on your behalf. 

If this sounds like a better route, ask the mortgage broker the following questions before bringing them on board.

1. Are There Any Applicable Fees?

You must be curious about this. After all, no professional will work for you for free.

You’re in luck here. Most mortgage brokers won’t bill you for services. This, however, doesn’t mean they don’t get paid. Typically, brokers earn a finder’s fee from mortgage lenders for introducing you as a client.

That means you do not pay mortgage brokers any fees for their advice. You will, however, settle appraisal, legal costs and other costs associated with the property’s purchase. Always ask your mortgage broker about any potential fees.

2. What Are My Refinancing Terms?

Inquire from your broker about any restrictions on your mortgage before taking it on. 

Some lenders will offer low rates but with numerous restrictions. For example, you might be given a low-interest rate, but refinancing your mortgage or switching lenders is disallowed.

This question helps you clarify what you can or cannot do, which is paramount in helping you pick the best mortgage.

3. What Closing Costs Am I Looking At?

Closing costs include but are not limited to legal and appraisal fees, land transfer taxes, home inspection and Provincial Sales Tax. You should budget and save up for these alongside the down payment.

Your mortgage broker should be able to compute the figures for you to plan for them.

If you cannot pay out of pocket, a reputable mortgage broker can help you identify lenders that offer cashback mortgages.

4. What Penalties Are In Place If I Break My Mortgage Early?

Life happens. As such, you might find you need a bigger house, to relocate or refinance your mortgage. These actions will require you to go about your existing mortgage contract differently than anticipated.

Variable rate mortgages have minimal mortgage penalties, while fixed mortgages have higher ones. Because some circumstances are unforeseen, it helps to discuss these events with your mortgage broker before signing on the dotted line.

5. Do I Have Prepayment Privileges

A mortgage is a debt, and like with all other obligations, you probably want to be done with it as quickly as possible.

Some lenders only allow you to make lump sum payments once yearly. Others will let you double your payments, while others allow you to make lump sum payments and increase your regular payments.

Need Help?

You don’t have to navigate these unchartered territories on your own. Instead, get help from a team that has successfully negotiated numerous first-time homebuyers mortgages.

Take the guesswork out of one of the most significant decisions of your life; talk to me today.

Don’t go in blind; call me.

Are you ready to purchase your first home? Reach out to me directly or start your application here: www.sandraforscutt.ca/mortgage-application/