Choosing the right mortgage broker is crucial when securing a mortgage for your home.
A good mortgage broker can guide you through the process and help you navigate the complexities of the mortgage market.
However, with so many brokers available, it can be challenging to know where to start.
One of the most effective ways to assess a mortgage broker’s expertise and experience is to ask the right questions.
This guide will outline the top 13 questions you should ask your mortgage broker to ensure you receive the best deal possible.
These questions cover a range of topics, including the broker’s experience, compensation, understanding of your unique needs, and lender relationships.
By asking these questions, you can gain insight into the broker’s level of knowledge and expertise, enabling you to make an informed decision about who to work with.
With the right mortgage broker by your side, you can secure the best mortgage for your financial situation and achieve your dream of homeownership.
List of Questions to Ask Your Mortgage Broker
Question 1: Are you licensed?
Mortgage brokers and agents must have the required license to practice.
In Ontario, the regulatory body that oversees mortgage professional licensing is FSRA.
The License is like a seal of approval.
It means the broker has met the required qualifications, which is good for you as a borrower.
Mortgage brokers must display or provide you with their license numbers and that of their brokerage.
As a licensed broker or agent, the broker is subject to the governing rules and regulations designed to protect you, the consumer.
For example, suppose you have a complaint about the broker’s services, you can file a complaint to the regulatory body, and they will investigate the matter.
Another good thing about working with a licensed broker is that they have to take continuing education courses to keep their license up-to-date.
This means they are always learning about new laws, regulations, and products in the mortgage industry, which can benefit you in the long run.
That can give you peace of mind and ensure that you’re working with a professional who has met the necessary qualifications. For a broker practicing in Ontario.
Question 2: How Long Have You Been Practising?
When choosing a mortgage broker, it’s important to find someone who stays current with industry conditions and trends, which can affect your ability to obtain the right mortgage.
The mortgage industry is always evolving, with changes in regulations, policies, players, and products.
One way to assess a broker’s expertise is by asking about their experience.
An experienced broker will have the knowledge and skills to guide you through the mortgage process and help you secure the best mortgage for your situation.
They can anticipate and address potential roadblocks during the application process, ensuring your mortgage is approved and funded on time.
In addition, an experienced broker will have a wider network of industry contacts, which can be advantageous when dealing with challenging credit or income situations.
Question 3: What Type of Mortgages Do You Specialize In?
Finding a mortgage broker with a strong track record for the type of mortgage you need is important to getting the right mortgage at the best rate in the market.
For example, if you have a bad credit score and are in the market to purchase a house, it’s important to find a broker specializing in bad credit mortgages.
This is because the rules and criteria for obtaining a bad credit mortgage differ significantly from those of traditional mortgages meant for individuals with good credit scores.
Similarly, if you’re considering refinancing your current mortgage, your requirements will differ, and you’ll need to find a broker who specializes in that type of mortgage.
approvU assigns your application to a Mortgage Consultant with the necessary expertise to handle your situation.
Question 4: How Can You Determine If I Am Eligible for a Mortgage?
Asking a potential mortgage broker how they determine your eligibility for a mortgage is crucial to ensure they can handle your unique needs.
A good mortgage broker will systematically ask questions about your credit score, income, and debt-to-income ratio to assess your eligibility for different mortgage programs.
Transparency is key, and a good mortgage broker will explain the eligibility criteria for different programs and help you navigate any obstacles.
They should also clearly communicate the process and keep you informed throughout the application process.
By asking this question, you can gain insight into the broker’s expertise and ability to guide you through the mortgage process.
Overall, you should expect a responsive and transparent broker to help you navigate the mortgage process easily and confidently.
Question 5: What is Mortgage Application Process?
Asking about the mortgage application process is an essential question to ask your potential mortgage broker.
A good mortgage broker will have a clear and transparent process for submitting a mortgage application, including the required documents and the typical time it takes.
When you ask about the mortgage application process, pay attention to the following:
- Document Gathering: Ask the broker how they will help you gather the necessary documents for pre-approval, such as tax returns, pay stubs, and bank statements.
- Credit Check: Ask how your credit score will affect your pre-approval. What authorization do they need to access your credit record?
- Income and Debt-to-Income Ratio: Ask the broker how they will review your income and debt-to-income ratio to determine how much you can afford.
- Pre-approval Letter: Ask how quickly they can get you a pre-approval letter and what it will include.
- Timeline: Ask the broker how long the pre-approval process will take and the expected timeline.
It’s important to ensure that the mortgage broker’s process aligns with your needs and that they can provide a pre-approval letter quickly if needed.
Question 6: How Do You Stay Current with Changes in the Mortgage Industry?
It’s crucial to work with a broker who stays informed and educated on the latest developments in the industry to ensure that they can provide you with the most accurate and up-to-date information.
When evaluating a broker’s industry knowledge, you can ask them the following questions:
- How do they stay informed about industry changes? For example, do they regularly read industry publications, attend conferences, or participate in continuing education courses?
- Are they members of any professional body?
- Ask if they have experience with the new mortgage guidelines and rules after the pandemic.
A mortgage broker who stays current with changes in the industry will be better equipped to help you navigate the mortgage process and find the best loan options for your situation.
They will also be able to advise you on how changes in the industry may affect your mortgage application or refinance.
Question 7: How Many Lenders Do You Represent?
It’s important to hire a broker that best represents your interest.
One way to gauge that is by the number of lenders they represent.
If a broker only represents one or two lenders, then your options are only limited to the mortgages of those lenders, which may not be in your best interest.
Brokers that have worked with several lenders can get you the best rate in the market because of their wide lender reach.
They will have a diverse range of options and lenders, increasing your chances of getting the best mortgage rate.
Question 8: What Is Your Success Rate for Closing Loans?
A good mortgage broker should have a high success rate of getting their clients’ applications approved and funded.
Knowing that you are represented by a professional with a good track record of closing loans will give you confidence that they will be able to get you approved for the mortgage loan that you need.
When evaluating a broker’s success rate, you can ask them the following questions:
- What is your success rate for closing loans? A good broker should have a success rate of at least 60-80%.
- How do you measure success rate? A good broker should be able to provide statistics such as the number of loans closed and the number of loans denied over a specific time.
- How do you handle a denied application? A good broker should have the plan to help you understand why your application was denied and what steps you can take to improve your chances of getting approved.
- What are the common reasons for denied applications? A good broker should be able to provide you with an understanding of the most common reasons for denied applications, such as credit score, income, or debt-to-income ratio.
- What is your experience with specific loan products? A good broker should have the experience and knowledge of different loan products and be able to explain the pros and cons of each product and which will be the best fit for your situation.
Question 9: Can You Provide References from Past Clients?
Asking a mortgage broker for references from past clients is a great way to evaluate their level of service and determine if they are the right fit for you.
Past clients can provide valuable insight into the broker’s level of expertise, communication skills, and overall customer service.
When you contact the references, ask them about their experience working with the broker.
Find out if they felt well-informed throughout the process, if the mortgage broker was responsive to their needs, and if they were happy with the outcome of the loan.
You can also ask them if they had any challenges during the process and how the mortgage broker helped them overcome them.
Question 10: Can You Help Me Understand the Different Mortgage Programs Available to Me?
Navigating the many mortgage programs on the market can be overwhelming.
However, a good mortgage broker can help make sense of it all.
They can explain the different loan programs available to you and help you determine the best fit for your needs, saving you time and giving you peace of mind.
For instance, if you’re a first-time homebuyer, your broker should be familiar with the special programs available for first-time buyers and how to access them.
Similarly, if you’re considering refinancing, your broker can explain the options available, such as cash-out or rate-and-term refinancing, and weigh the pros and cons to help you decide which is best for your situation.
Question 11: What Is Your Policy on Returning Phone Calls and Emails?
The mortgage process can be stressful and time-sensitive.
One way to alleviate the stress during this process is for the broker to keep you informed through every stage.
A good broker should have policies and systems to respond promptly to borrowers’ inquiries.
Here are a few things to keep in mind when evaluating a broker’s communication policy:
- Ask the broker what their policy is for returning phone calls and emails. A good broker can tell you how quickly they respond to client inquiries.
- Find out how the broker prefers to communicate. Some brokers may prefer phone calls, while others may prefer email. It’s important to find a broker who is comfortable communicating in a way that works best for you.
- Ask the broker if they have a designated team member to handle client inquiries. A good broker should have a team member to handle client inquiries so you always know who to contact.
- Ask the broker what their availability is like. A good broker should be available during normal business hours and have flexible hours to accommodate clients’ schedules.
It’s also a good idea to ask about the time frame of their process if the mortgage broker could close on time.
If there were any delays, how did the mortgage broker handle them?
Question 12: How Will You Be Compensated?
Understanding how a broker is compensated is essential in evaluating any potential conflicts of interest.
The method of compensation can affect the product or lender recommended to you, so it’s important to choose a broker who is not influenced by compensation and represents your best interests.
The compensation can be financial and non-financial, like tickets to sports games, movies, and others.
Brokers are also required by regulations to represent your interests and only recommend mortgages suitable for your unique needs and situation.
However, the method of compensation can still impact the lender and mortgages recommended to you.
Therefore, it’s important to choose a broker who can offer impartial advice and recommendations, regardless of their compensation structure.
By doing so, you can rest assured that the recommended mortgage is the best fit for your financial situation and is not influenced by any potential conflicts of interest.
Question 13: Do You Charge a Fee?
Aside from the standard compensation paid by the mortgage lender, some mortgage brokers may also charge a fee for specific services.
This is typical for specialty mortgage programs such as those for bad credit or self-employed individuals.
This fee is known as a broker or brokerage fee.
There are no industry guidelines for this fee structure. It can be a flat amount or a percentage of the loan amount.
To avoid surprises, it’s crucial to clearly explain all the fees they charge and how they’ll be applied.
Make sure you understand what services you’ll receive in return for any fees charged.
Also, be aware that you have the right to negotiate or shop around for a broker who offers competitive rates and fees.
Doing your research can help you find the right mortgage broker for your needs while avoiding any unexpected fees.
Conclusion
When searching for a mortgage broker, it’s essential to ask the right questions to ensure you receive the best deal.
The top 13 questions outlined in this guide will help you assess the broker’s experience, expertise, compensation, and understanding of your unique needs.
By asking these questions, you can feel confident that you’re working with a reputable and knowledgeable mortgage broker who has your best interests in mind.
Remember that choosing the right mortgage broker can make all the difference in securing the best mortgage for your financial situation.
Don’t be afraid to ask these questions and clarify any concerns you may have before making a decision.
With the right mortgage broker on your side, you’ll be well on your way to securing the best possible deal on your mortgage.
