Applying for a mortgage can be a stressful process but knowing what questions to ask a mortgage broker can help reduce the stress. According to one international study, 41% of homeowners felt stressed out during the home loan application process, with one in five blaming the amount of paperwork involved. Meanwhile, 15% of respondents said that the industry “jargon” made things confusing and stressful.
Fortunately, that doesn’t have to be your experience. To ensure you receive the best possible home loan with the least amount of stress, it’s important to first sit down with your broker and have a frank conversation. How will this help to eliminate stress? The key is understanding what questions to ask a mortgage broker.
Why You Need to Know What Questions to Ask a Mortgage Specialist
The Australian real estate landscape has experienced some substantial changes over the past year. With the Reserve Bank repeatedly raising the official cash rate, borrowers have had to adjust to a “new normal” that involves substantially higher interest rates. Despite recurring rate increases, property prices across Queensland have continued to climb. This is driven by steady population growth and a reduced number of properties listed for sale (a classic “supply and demand” equation).
This means that borrowers are now in a more complex situation than they were pre-COVID. Lending criteria have changed, and while there are still some lenders offering fantastic deals, they’re not as easy to find as they once were. That’s why it’s more important than ever that you understand what kind of questions to ask a home loan broker. The right mortgage application questions could save you thousands of dollars over the life of your loan.
Important Questions to Ask a Mortgage Broker
One of the great things about chatting with a broker is that they’ll usually be able to answer all manner of questions. But have you ever been asked, “Do you have any questions?” and then found yourself stumped? You know there are probably questions you should be asking…you’re just not sure what they are. But there are some specific questions to ask a mortgage broker that will help to ensure you end up with the best possible loan to suit your circumstances.
How to Decide What Questions to Ask a Home Loan Broker
So, how do you decide what things to ask a mortgage broker? It’s a good idea to start with a personal financial assessment. This will enable your broker to understand exactly what your current situation is and then provide tailored advice on whether there are any areas you could improve. For example, standard mortgage application questions will focus on your credit history, genuine savings and the amount of personal debt you already have. Identifying areas for improvement ahead of time could end up saving you a lot of money in the long term.
The Top 5 Things to Ask a Mortgage Broker
raw facility may be necessary. Or if you’re hoping to reduce the mortgage principal, then you’ll need to make sure your mortgage allows for additional repayments.
3. What is the maximum amount I should borrow?
A common question to ask a home loan broker is “How much could I borrow?” But it’s even more important to understand how much you should borrow. An experienced mortgage broker will be able to assess your circumstances, your current earning capacity and how much you have saved as a deposit, and then make a recommendation on the maximum amount they would recommend you borrow. This could help you avoid higher interest rates or paying extra for Lenders Mortgage Insurance.
4. What will be the true overall cost of my mortgage?
This is another one of those often overlooked questions to ask a mortgage broker. It’s important to remember that the true cost of your mortgage isn’t just the amount you initially borrowed – it’s the amount you end up paying back. This total amount can be impacted greatly by the length of the loan, the kinds of fees that your lender applies and whether or not you will be making interest-only repayments. Once your broker has calculated the true overall cost of the various mortgages available, then you’ll be able to make the best long-term decision.
5. What are the various stages of mortgage approval?
Some people have been caught out by the various stages of mortgage approval, so it’s one of those important things to ask a mortgage broker about. Generally, ‘pre-approval’ can help you to know what price range you should be house-hunting in, but it’s not a guarantee and shouldn’t be used as a basis for making a formal offer on a property. A ‘conditional approval’ is more formal but is still conditional on what property you plan to purchase. ‘Full approval’ will only occur after the lender has signed off on a property.
Do You Have More Questions to Ask a Mortgage Broker?
Have you got some additional questions to ask a mortgage broker? If so, the experienced team at SCF Solutions are here to help. We understand that this is one of the biggest financial decisions you’ll ever make. That’s why we’ll happily take all the necessary time to answer your mortgage application questions.
So, if you’ve got questions to ask a mortgage specialist, book an appointment with SCF Solutions.
Meet Chris Wilson, the heart of Sunshine Coast Financial Solutions (SCFS). With over a decade of experience in finance, Chris started his journey as a broker with Aussie Home Loans in 2009. His dedication earned him the title of Rookie of the Year in 2010. By 2011, he was ready to build a business based on trust and strong partnerships.
