10 questions to ask a mortgage broker

Summary 

What is a mortgage broker? 

A mortgage broker is a type of broker that pairs home loan seekers with potential lenders who can offer them the best type of mortgage loan for their needs and circumstances. 

If you are looking to put down a deposit on a home but aren’t sure where or how to get the money, you might hire a mortgage broker to assist with that process. They can help match you to a lender whose rates and procedures are compatible with what you are looking for as a borrower.  

As the housing economy picks up strength again in 2024, mortgage rates are coming into sharp focus for many.  

Understanding which questions to ask a mortgage broker when contemplating buying a home is crucial for securing a repayment scheme that works for your budget and personal preferences.  

Generally speaking, people will ask their mortgage broker a variety of questions relating to their qualifications, fee structure, available loan options, interest rates, and advice before beginning the home-buying process.  

But digging a little deeper (and showing up prepared) can result in more clarity and a better deal for you and your circumstances.  

However, knowing which exact questions to ask a mortgage broker can be difficult, especially if you have limited experience working with one.  

Below, we’ve listed ten of the best questions to ask your mortgage broker next time you’re interested in taking out a home loan.  

1. Are you regulated at a state level? 

Before anything else, it is important to confirm that the mortgage broker you are consulting with has been qualified to offer financial services and is actively regulated at a state level.  

Asking this question ensures that you do not make any deals with an illegitimate broker and allows you to move forward, trusting that the experience will be legal, productive, and professional.  

2. What are your fees? 

Mortgage brokers set their own fees and choose their own fee structure based on personal preference. Ask them what theirs is so that you understand fully what you will owe them and how you will be charged going forward.  

3. What is the best type of mortgage loan that would benefit me most? 

Knowing what is the best type of mortgage loan for you depends on your situation, and a good mortgage broker will understand this.  

There are a few different types of mortgage loans to choose from, including interest-only mortgages and repayment mortgages. Ask your mortgage broker to help you choose one that benefits you the most.  

4. How many lenders can be accessed? 

There is likely to be more than just one accessible lender for your needs, and a mortgage broker should be able to point you in the right direction about the full list of options. The more lender options you are aware of, the easier it will be to find an arrangement that works for you.  

5. What are the best ways to save for a house? 

Understanding how to save for a house is important for anyone who wants to work within a limited budget and make the most of their brokerage deal.  

The amount you’ll need to save for a house depends on the property in question’s worth and what percentage of that property your lender is willing to lend. Furthermore, you’ll need to factor in the cost of legal fees, moving, and taxes – all of which differ from client to client.  

6. How much money can I borrow from the bank? 

A mortgage broker should be able to tell you how much money you can borrow from the bank based on your income level, credit history, monthly spending habits, and the value of the property you are hoping to pay a mortgage on.  

7. What is the interest rate, and will that change over time? 

Interest rates vary according to several factors, including the time period, type of mortgage, and whether it is fixed or unfixed. Averages currently range between 5.75% and 6.67% in the US. Your mortgage broker will be able to provide more clarity about what yours will be and whether it is likely to change over time.  

8. Are there restrictions on a mortgage? 

This is one of the most important questions to ask your mortgage broker,  particularly if you are planning on flipping your property in the future. Not all mortgages are portable, and some require early payment charges (EPCs) before you can end your mortgage on a property.  

If you don’t ask your broker this question, you may end up with a mortgage deal that charges you avoidable fees. Any apparent mortgage restrictions should be laid out for you by your broker.  

9. Can I have assistance on other parts of the house-buying process? 

The mortgage broker you hire may offer additional financial services in connection to the house-buying process that you can benefit from.  

Inquiring about whether they can provide you with assistance on other aspects of home ownership, such as property taxes, building insurance, or estate management, can be of benefit to you as a client.  

10. What documentation is required, and how long does it take to have the mortgage approved? 

When applying for a home loan, your mortgage broker will ask you for certain documentation (typically payslips, proof of identity, etc.), and you should be aware of what kinds from the beginning. By asking this question now, you can be fully prepared for the administrative requirements going forward.  

Asking about the projected approval process length is a useful insight that can help you form a clearer plan for achieving this exciting goal.  

Seek expert financial advice 

Knowing the exact terms and conditions of the brokerage deal you sign is essential.  

By knowing what questions to ask your mortgage broker, you can protect yourself and your funds as you navigate the important process of home ownership and mortgage repayment.  

If you’d like to learn more about financial planning when it comes to homeownership, you should seek the guidance and expertise of a financial advisor.  

Unbiased can match you with the right financial advisor to suit your needs.