When taking a home loan, you will need a mortgage broker to help your bargain the mortgage interest rates and repayment terms. When choosing a mortgage broker, you need a professional that offers the lowest interest rates at a considerable price. So, how can you achieve this? Below are some interview questions to ensure you get the best mortgage broker in the market.
Who Do You Work With?
You will find two categories of mortgage brokers. An independent broker is one that works with multiple lenders. The advantage of independent brokers is that they can compare and contrast the rates of various lenders. It helps you identify lenders with friendly terms and low-interest rates. Some brokers will work with a single lender. The benefit of these brokers is that they have long term relationships with the bank. As such, they may be in a better position to negotiate since they take all their customers to a specific bank.
What Will You Negotiate?
The broker should be clear about what they will negotiate. For instance, will they reduce the interest rates or increase the repayment terms? Your current financial condition could compel the broker to negotiate additional conditions. For example, they could ask the bank to give you a honeymoon period or interest-only repayments.
Other than negotiations, the broker should also advise how you can reduce the mortgage costs. For example, a substantial deposit will reduce the principal hence you will pay lower interest. Besides, some lenders will not require mortgage insurance if your deposit exceeds a specific amount (typically 20-30%) of the home's value.
Which Loan Is Most Suitable?
The mortgage broker should assess the current financial environment, your finances and personal situation to determine a suitable bank loan. For example, a bridging finance loan is ideal if you need a new home before selling your old home. On the other hand, a low doc loan is your best bet when you have poor credit. Construction loans are designed for people that need to renovate or build their homes. If the broker thinks that the interest rates will reduce in the foreseeable future, they will ask you to take a variable rate home loan.
What Are Your Charges?
Examine the broker's pricing. Some brokers charge per hour while others will charge a slight percentage of the total cost of the property. Do not dismiss a broker based on their pricing. Instead, check how much they will help you save. You are better off paying more and making substantial long term savings on your home loan.
When hiring a mortgage broker, assess their affiliation, negotiation strategy and charges. Besides, the broker should advise on a suitable mortgage.