10 Questions To Ask Your Mortgage Broker When You’re First Time Buyers


Mortgage Broker
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If you’ve been caught in the home shopping frenzy but you’ve never owned a home, you probably have a lot of questions. One of the biggest areas of confusion is regarding mortgages. Dealing with a mortgage broker can be challenging, but the following questions will help you understand the mortgage process.

1) What is the role of the mortgage broker with getting a mortgage?

Mortgage brokers act as middle parties between mortgage lenders (banks or financial institutions) and borrowers. Ideally, the mortgage broker will help you to find the best mortgage to suit your needs. 

2) What is the advantage of working with a mortgage broker versus with a bank?

Working with a mortgage broker offers greater flexibility with regard to which mortgages you can choose from and can access. This is especially advantageous if you don’t have the best credit. Working with a bank is a simpler process and doesn’t require the commission that is required for working with a broker, but you might not get the best rates of mortgage. 

3) How do I know that you’re a qualified mortgage broker? 

Just like any other profession, you have to check a mortgage broker’s credentials. You should always check their licenses, any client reviews and consult our real estate agent on which ones are the most qualified. Fortunately, there are many options to choose from for a mortgage broker in Essex. 

4) How and when are mortgage brokers paid?

Typically, mortgage brokers receive 1-2% of the loan amount that you will be receiving. This can be paid upfront or when you receive the loan. Make sure to discuss these details with your mortgage broker in Chelmsford or mortgage broker in Essex.

5) What affects the size of the mortgage I can get?

There are many factors that determine how large of a mortgage you can get. Credit score, credit history, debt-to-income ratio, employment history, down payment, collateral and loan term all influence how large of a mortgage you can get. For example, a higher credit score, low debt, a larger down payment and shorter loan term can warrant a larger mortgage. 

6) What determines the interest rate on the mortgage?

The interest rate determines what you will pay back on the mortgage until it is paid in full. Interest rates are determined by the type of loan you get, the timeline of the loan, your collateral, the cost of the home, whether the interest rate is fixed or adjustable, the size of the down payment and where your home is located.

7) What determines the monthly payment? 

Your monthly payment will be determined by the cost of the home broken down into a 360 payments (1 a month for 30 years) plus the interest rate on that payment. Mortgage calculators can help you understand how to pay enough to pay back the mortgage for your home. 

8) How often do I need to pay back the mortgage?

Most people get 30-year mortgages and make payments once a month or, if you’re trying to pay back the mortgage sooner, bi-weekly. 

9) What happens if I delay or stop paying the mortgage?

Usually, mortgage companies will give you a 15 day grace period to make a payment from your scheduled payment deadline. After that, you will begin to accrue late fees. At 45 days, mortgage companies can report you to credit bureaus for being late on your payment, and after 120 days, you can be subject to foreclosure. If you are experiencing temporary financial hardship, you may be able to apply for forbearance to delay loan payments anywhere from 3-12 months.

10) What happens if I under/overpay the mortgage?

If you overpay on your mortgage payments, this can speed up the timeline it takes to payback the mortgage depending on how much you overpay. With enough overpayments, you can pay off your mortgage sooner and own your home outright! You can potentially arrange with your bank to make periodic underpayments, but if you consistently underpay your mortgage you can be subject to having your home repossessed or foreclosed. 

11) Can I transfer a mortgage to someone else without selling the home?

Depending on the situation, you may be able to transfer a mortgage to another borrower as long as there is a guarantee that the other borrower will be able to repay the loan. However, this will be determined by the terms of the mortgage and how many borrowers are involved. 

Now that you know a little more about working with mortgage brokers and mortgages, you can find the right mortgage broker in Essex and mortgage broker in Chelmsford so you can find the right mortgage for you.



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