A good mortgage broker is a teacher, coach, financial advisor, and real estate financing expert all wrapped up into one.
But how do you know you can trust a prospective mortgage broker to help you buy your first home?
The key is to ask the right questions so you can find out if your potential mortgage broker is a good fit for you. Of course, finding a great mortgage broker requires more than just the right list of questions.
So in this post, I’ll reveal both the questions you should ask your mortgage broker candidates as well as the signals you should look for in their answers.
1. What’s the Best Loan for Me?
This is somewhat of a trick question. In reality, if your broker knows nothing about your situation, they can’t accurately tell you what loan makes sense for you.
So if they do try to tell you a certain loan product is right for you without first learning about your financial situation, that’s a red flag. In other words, a competent broker won’t answer this question until they fully understand your situation.
What to look for: Once your broker has learned a bit more about you, ask this question again. The answer you get should be tailored to your personal circumstances and your financial goals.
If your prospective broker’s answer doesn’t make it clear why a certain loan is better for you, probe further. Ask them to explain why the loan type they recommend for you is superior to the alternatives and how that loan brings you closer to your goals than any other loan.
For example, if you’re considering either a fixed-rate or an adjustable-rate loan, a good mortgage broker will be happy to explain the benefits and drawbacks of each.
2. Can You Guarantee an On-Time Closing?
This is an important question because—while your purchase contract technically establishes the closing date—in reality, closing a deal is often dependent on the lender’s ability to close on time. If your lender doesn’t close on time for whatever reason, it opens the door to additional expenses, interest rate increases, or even a cancellation of the deal.
What to look for: Some mortgage brokers guarantee on-time closings (like The Mortgage Hub) but others don’t.
If your prospective broker says they don’t guarantee on-time closing, it’s not necessarily a deal-breaker. But they should still have policies that ensure they will cover or partially cover certain expenses you may incur as a result of a delayed closing.
Of course, no policy protects you from potentially losing out on your dream home as a result of a delayed closing.
3. How Can I Get the Best Deal Possible?
With the right strategy and preparation, you can get a better deal on your home mortgage. And your mortgage broker should be able to help you formulate and execute that strategy.
So it’s important to ask him or her what that plan might look like, given your financial goals and constraints.
What to look for: How much you pay for your mortgage depends on many factors—your down payment, credit history, income, current debts, and more. All these factors are like levers that—when pulled—can help reduce how much you pay in interest, fees, taxes, and more.
A broker who’s acting in your best interest won’t just jam you into a loan as fast they can. Instead, they’ll look for ways you can make yourself a more attractive borrower which will reduce the cost of your loan.
4. Can You Explain Your Application Process?
Applying for a loan, even if you’re working with a mortgage broker, can be overwhelming. You need to ensure the loan will close on time, account for all fees, and time your rate lock, among other things.
So it’s a good idea to get familiar with your prospective broker’s approach to the application process.
What to look for: Great communication and a streamlined process are key to a successful loan process. For example, at The Mortgage Hub, setting expectations with our clients about documentation and deadlines is paramount.
You’ll also want to make sure your broker is transparent and upfront about any fees associated with the loan itself as well as the loan application process.
5. What Kind of Experience Do You Provide?
As a first-time homebuyer, you want a broker who can guide you through the loan process from start to finish. And while you should get a good feel for what to expect from your broker through your initial conversation, it’s good to ask this question directly too.
What to look for: You never know when an unforeseen issue or question may pop up in the homebuying process. So you’ll want to make sure your broker is accessible and responsive.
It’s also good to find out who you’ll be working with most of the time. Brokers may have a support team or they may work alone. This will impact your experience, so make sure you know what to expect.
Finally, make sure your broker’s communication preferences align with yours. If they aren’t comfortable communicating the way you do—whether it’s by text, phone or email—that could be a problem.
Not Sure? Seek Clarification
You don’t need to be a mortgage expert to get set up with an affordable mortgage in the house of your dreams. But it is important to ask questions.
Even a simple application process requires plenty of documentation, communication, and coordination. So it’s best to seek clarification anytime you’re not sure about anything.