You must not hesitate to ask your broker about the various pros and cons of the different loans.
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Ask Your Mortgage Broker These Questions before Committing to a Lender
A large number of the mortgage borrowers hire the services of a broker to get their loans, and there is a good reason to do this. One of the main advantages of using a broker to get the best deal is the that instead of going through the first bank that you come across, a broker will shop around and consider various lenders before settling on the best option.
There are various mortgage brokers in the field but most people feel that they can only trust the big names. If this applies to you remember that the best way to ensure that you get the maximum benefits of hiring a broker, regardless of whether it is an established firm or a private practice, is to ask some important questions before committing.
Ask For References
Most people hire mortgage broker Brisbane CBD through references form relatives or friends. In this case, you are already acquainted with a person who has experienced the quality of the broker’s service. However, if you select a broker in any other way, for e.g. if you responded to an advertisement, or there might be a broker’s office in your local area, be sure to ask for references.
Ask for the name and the contact information of recent customers. You must call up a couple of them and ask about their experience with the broker’s firm. You may ask questions pertaining to how they were treated and if the costs were reasonable.
How are they compensated?
There are two ways in which most mortgage brokers are paid: direct fees or yield spread premiums. The fee of the broker is often presented in the form of points, in which every percent of the loan equals 1 percent. You might find this listed on the loan documents as origination fee of the lender or the broker’s commission.
Be sure to enquire about other costs such as the funding, application, processing, or document preparation fee. The yield spread premium is a controversial method of payment as it might cause the borrower to end up with a higher interest percentage.
What is their policy on rate locks?
There are daily changes and fluctuations in the interest rates and this might come as a bad news to some. If you believe that the interest rates are moving up, you have the option of locking the loan. Ask your mortgage broker Brisbane CBD if they offer this service and the charges for the same.
Which loan is the best?
There are various types of loan and in order to determine the best one for you, the broker will have to closely inspect your financial situation and a variety of other factors. Just like a doctor only recommends surgery after assessing your medical situation in depth, a broker too will gather all the necessary information about your situation before making any recommendations.
The different types of loans for you to consider are fixed rate loans, adjustable rate loans, negative amortization loans, and adjustable rate loans. You must not hesitate to ask your broker about the various pros and cons of the different loans.
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