Mortgage Broker - Questions To Ask

"How to get your mortgage broker to give you their best deal."

Crucial Questions You Must Ask Your Mortgage Broker When Applying For a Loan

When applying for a mortgage, it’s important you get answers to the following questions. Be sure and print these questions out and take them with you when meeting with a potential mortgage lender.

By taking the time to learn the answers to these questions, you can reduce or eliminate the chances of being taken advantage of, thus saving you thousands of dollars.
 

Here's what to ask your mortgage broker:

1. Will There Be an Additional Charge to Lock-In an Interest Rate and Discount Points?

Since rates fluctuate daily, most lenders offer a lock-in policy that guarantees your quoted interest rate and points will not change for a specified number of days.

Allowing you time to organize your documents and shop other loans before applying with this lender. By paying a one time lock-in fee you may be able to save you thousands if the interest rate rises during the time you are locked in.
 

2. How Many Points Will Be I Charged?

The answer to this question will vary from lender to lender. A point is calculated as one percent of the loan amount. Points charged are additional to the interest rate that is charged on the loan.

A lender often makes his fees by charging points or to negotiate a lower interest rate. Be careful with this because a loan with a low interest.
 

3. What Will Be The Interest Rate & Annual Percentage Rate for This Mortgage?

The answer to this question will allow you to compare the loan costs of this particular mortgage with other loans you may compare against.

Your loan APR is figured by combining the interest rate, points and other fees divided by the loan’s term to give an annualized rate. A low interest rate and high points could end up costing you thousands more than one with a higher interest rate but low points.
 

4. How Long Will it Take to Process My Mortgage?

Processing is the time it takes from the day you submit your application to the time your loan is approved. The time it takes to process a loan will vary for different loan types and among lenders.

Normally loans should be funded within 7 to 10 working days, unless there is a problem with your application.
 

5. Will I Be Charged For Private Mortgage Insurance (PMI)? And If So, Can I Finance the Upfront Premium into the Loan Amount?

If you’re unable to put a 20% down payment on your new home, you will be charged PMI (an insurance premium to protect the lender in case you default on the loan).

If you are charged this, find out if you can add these premiums into your financing.

Click here for information on How to Avoid PMI
 

6. What Are The Total Closing Costs?

Be sure and get this in writing within 3 days of applying for the loan. If they can’t provide this within 3 days…the lender has broken the law. When a list of closing fees are provided, be sure you understand each fee. Sometimes lenders will tack on unnecessary fees to boost profit.

Lenders charge fees for the services incurred to process and close your mortgage. Also, make sure the closing costs that were presented to you in the beginning match the closing costs presented at closing.
 

7. Is There a Pre-Payment Penalty?

This is a penalty some lenders apply to your loan if you decide to pay off your loan early. Either by making bi-weekly payments or 1/12 extra payments.

This is important, since you might want to pre-pay your loan in order to eliminate costly interest overpayments.

Most lenders don’t charge a pre-payment penalty, so there is no need to go with a lender who charges this.
 

8. Rapid Loan Approval

Be sure and ask your lender if they utilize Rapid Loan Approval Software. This computer software allows lenders to determine a borrowers credit risk instantly.

This allows them to approve a loan within hours or even minutes. Look for a lender who utilizes this software. It will save you valuable time especially when shopping for the best interest rate.

Click here for an approval in five minutes from E-Loan, an online Mortgage Broker.
 

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Written by Craig Romero
Discover how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. Visit: www.wisemortgageinfo.com

Craig Romero is an author and mortgage analyst dedicated to helping homeowners maximize the investment in their homes.
 

Related Pages

Mortgage Brokers and Lenders - How mortgage brokers differ from direct lenders - Both have advantages and can save you money - Comparisons and advantages of both types of mortgage lenders.

Online Mortgage Broker - How to use an online mortgage broker to save big on your next home loan - Advice on what works and what to avoid.

Selecting The Right Mortgage - How to choose the right mortgage based on your lifestyle - Advice on the best mortgages for different phases of life, future income changes, and risk levels.

Down Payment and PMI - How to leverage your down payment - Buy a larger home where your equity grows faster and avoid PMI using a two-loan strategy. Learn the 100% financing technique. Avoid paying for private mortgage insurance (PMI) on any mortgage where you put less than 20% down.

Mortgage Broker vs Mortgage Banker - Information on how a mortgage broker differs from a mortgage banker - Tips on when to use each one to get the best loan rates.

Mortgage Loan Broker - How to select a mortgage loan broker - Finding a mortgage broker online - Getting the best rates by using a mortgage loan broker like E-Loan.
 

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