Buying a house is a stressful process, but mortgage advisers can give you great advice and help you land on your feet after securing your next real estate venture. They act as an intermediary between lender and borrower, and can answer critical questions regarding your loan application. From narrowing down the most suitable mortgage for your individual needs to helping you evaluate mortgage costs, a good mortgage adviser like Elementary Mortgage Solutions will play a pivotal role in nudging you in the right direction.
Here are four important questions you should ask your mortgage adviser to accurately gauge your mortgage needs and ensure your application gets approved.
What Is The Most Suitable Mortgage For Me?
Every mortgage comes with terms and conditions. Your mortgage adviser will assess your financial condition before guiding you towards the mortgage that’s best suited to your needs and preferences.
For instance, if you want a loan with minimal interest, your best bet is a 15-year mortgage. However, keep in mind that paying your home loan off in a short time frame will require much larger repayments. Before choosing a loan, ask your adviser to determine how much you can reasonably afford.
Make sure you ask the adviser to evaluate your short and long-term objectives. If the adviser jumps to match you with a lender without a proper assessment, look elsewhere for recommendations.
What Are The Fees Associated With A Mortgage?
A mortgage broker should consider all aspects, from your budget to your financial situation, when helping you to determine costs. Fees and additional charges must be calculated upfront to ensure total transparency.
In particular, you must pay close attention to the loan’s interest rate and applicable surcharges. Once you have these values, compare them with the rates of other lenders, and see if your mortgage adviser is leading you in the right direction. You’ll have to deal with a long list of additional expenses at the time of closing, depending on your location. Some of these may include:
- Attorney or conveyancer fees
- Title transfer fees
- Taxes and stamp duty
- Mortgage account fees
- Brokerage commission fees
- Mortgage application fees
- Appraisal and valuation fees
- Home inspection fees
- Homeowners insurance (if you opt for it)
You should also ask your consultant to provide you a comprehensive loan estimate. For this, he might ask you for the following information:
- Full name and contact details
- Income information
- Property address
- Property appraisal
- Loan amount required
The more you’re willing to open up about your financial credentials, the more accurate your estimate. A proper estimate must factor in loan interest rate and the projected monthly payment, too.
Depending on the final figure, you can tinker with your budget and then look at which lenders fall in your price range. If the price is un affordable, ask your financial adviser to give you alternative options, such as different loan types or duration.
Is My Mortgage Transferable?
If you’re in the market for a long-term loan, you might already have plans for another move in future. The idea of a forever home is becoming obsolete. More people are realizing the changing nature of their needs, and don’t wish to be locked into an expensive property for life. For these reasons, ask your adviser whether you’ll able to transfer your mortgage to another property in a couple of years. This will save you from the additional costs and hassles of re-mortgaging.
If you won’t have the option to transfer, then it’s in your best interest to negotiate with your adviser for discounts.
How Much of a Deposit Do I Need?
There’s no magic number when it comes to deciding how much of a deposit to put on a house. However, the percentage of the property price you decide to pay will likely affect your repayments, and your ability to secure a loan. For example, some banks won’t lend to people who don’t have significant savings to contribute. Advisers will often recommend people contribute 20%; in many countries, you can avoid paying mortgage insurance if you mortgage less than 75-80% of the total purchase price.
If you’d prefer to deposit less than 10%, you may be limited in the type of loan you can secure. While it’s tempting to purchase a property you love before you have sufficient savings, it could disadvantage you in the long run. Often this choice will mean high closing fees and increased monthly payments, along with compulsory mortgage insurance.
Not everyone has the knowledge and financial acumen to solve mortgage problems. That’s where a mortgage adviser comes in. Their job is to help you pick the right mortgage for your needs and financial situation, and clear up anything you’re confused about. There are no wrong questions. If you don’t calculate important costs, such as closing charges, attorney fees, and the type of loan that will fit your budget best when house hunting, you’re setting yourself up for financial stress.