Expert Advice on Mortgage Brokers

While hiring a mortgage broker is more advantageous for most new homebuyers than working directly with lenders, it still pays to screen them for professionalism. Taking a few minutes of your time to ask your broker some serious questions can you save you from experiencing problems when you are ready to buy your dream home. Following are 10 questions that you should ask your mortgage broker before committing to any terms.

1. Are you affiliated with any lenders?
Some mortgage brokers work with only a limited number of brokers, which places a limit on your available options and prices.

2. Are you licensed or certified by the state?
Nearly every state in the nation requires mortgage brokers to be licensed or certified to ensure that minimum standards have been met and consumers are protected from fraud. For example, an Alabama mortgage broker might need to know laws that relate specifically to Alabama, so whatever state you’re in, ask to make sure that your broker is certified there.

3. Is this the best possible interest rate?
Make sure you are getting the best interest rate possible, and ask whether there is anything you can do to get it lowered.

4. What are your fees?
The fees charged by mortgage brokers can vary widely, so it is important to understand what they are and the total amounts that will be due.

5. What type of mortgage is best for me?
Several types of mortgages are available, but the two most common are fixed-rate mortgages and adjustable-rate mortgages. The one that works best depends upon your specific situation and the economy.

7. How much are my monthly payments?
Once you understand the cost of the home, the interest rate and any associated fees, you must determine whether you will be able to comfortably afford your monthly payments.

8. When are payments due?
In addition to understanding when the down payment, fees and closing costs are due, be sure to ask when the monthly payments are due and whether there is a grace period.

6. Who is my lender?
Even though you are operating through a mortgage broker, you have to know who is originating the loan and what to expect when dealing with them.

9. Is there a prepayment penalty?
To save the most money, you will want to have an option to pay additional amounts on the principal without incurring extra fees.

10. How do I receive a copy of the closing documents in advance?
By law, you are entitled to a copy of your closing documents 24 hours before your closing date so that they can be reviewed for accuracy.

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