Five questions to ask when applying for a home loan
Nov 23, 2016
Navigating the home buying process can be mind-boggling, which is why you should contact a mortgage broker. A broker’s role is to answer your questions and help you have a hassle-free home buying experience.
Here are five questions you should ask your mortgage broker when applying for a home loan.
1. What documentation do I need?
The process of applying for a loan can feel a bit like an inquest because of the large amount of documentation that’s required. Rather than going it alone, you can save yourself a considerable amount of time and confusion by dealing with a mortgage broker. They will help you sort out your paperwork before you even think about a lender.
The most common documentation you will need includes proof of income, bank statements, and any loan documents from previous loans.
2. How long will the loan process take?
Time is of the essence when it comes to purchasing a home. Finding out how long the home loan process will take can help you adequately plan and save. Brokers know the typical approval time of most lenders, and their knowledge of the application process means you can avoid delays.
Using a mortgage broker will make the process sail by smoothly, so you can be confident you won’t miss out on your dream home. Your mortgage broker can give you a realistic timeline.
3. What mortgage interest rate will I pay?
Although mortgage interest rates fluctuate regularly, your mortgage broker will be able to give you some sort of idea of what rate you can expect to pay, based on the type of loan you are applying for. Just because it’s a low rate, however, doesn’t mean the home loan package is right for you. Your broker will be able to find the best rate for you and your circumstances.
4. What are my closing costs and other fees?
Buying a home costs more than just the amount of the loan. Closing costs and other fees and charges can add up. Ask your mortgage broker what your costs are up-front so you can budget accordingly, then you won’t be surprised when the bill comes in.
5. Are there any possible penalties I may incur?
Borrowers are sometimes charged a fee for paying off their loans early, particularly with fixed rate loans. It's important that you ask about any prepayment penalties before you sign off on any loan. Being charged a penalty for paying off your loan early is undesirable for many borrowers.
Get the right advice
If you have questions about your home loan, or how to apply for one, Choice Home Loans can find the right mortgage broker for you. Feel free to ask your mortgage broker any questions that you may have. It's only by asking questions that you’re certain to get peace of mind during your home buying process.
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