Top 10 Questions to Ask Your Mortgage Broker
1. Which type of loan is best?
Acceptable Answer: You want to feel that your mortgage broker
has asked you several questions and is genuinely trying to assess your
individual needs before providing an answer to this question. The more
questions they ask and the more they try to gauge your requirements, the higher
the likely that they will match you to a loan that best suits your needs.
2. Who is on your lending panel?
Acceptable Answer: A combination of bank and non bank lenders
including building societies etc. Also, if they have more than 20 lenders on
their panel you can feel comfortable that you will have options. Note: There is
no need to go with the Mortgage Broker that has the biggest lending panel as
the individual broker may only be familiar with some of the products from some
of the lenders on their panel.
3. What information do I need to have ready for my home loan application?
Acceptable Answer: The Mortgage Broker has a printed checklist
of the items you need to gather when applying for a loan and it is written in
You can print your checklist off here.
4. What is the Interest Rate?
Acceptable Answer: Whilst you want to hear a low interest rate,
a good Mortgage Broker will take the time to explain what the Comparison Rate
is, which provides a more accurate platform to measure more than one loan
product against. Sometimes the lowest interest rate can end up costing you more
in the long run when you take into consideration all the extra fees.
5. What are the fees on the loan?
Acceptable Answer: A full list of fees explained to you in
plain English. Don't let the Mortgage Broker use a lot of jargon to try and
cover up unnecessary charges. Feel free to ask them to explain any fees you
don't understand. You can also enquire if they have a 'No Fee' or 'Low Fee'
6. Can I lock in my mortgage interest rate between now and settlement?
Acceptable Answer: Yes. This means that the lender will lock in
your interest rate for a period of up to 2 months from the date your home loan
is approved. This means that even if mortgage interest rates go up before your
loan has settled, your rate won't change. Most lenders who offer a 'Rate Lock'
will allow you to reduce your interest rate in line with any decreases in
interest rates. You get the best of both worlds. Check that your lender will
provide this for free.
7. Is there is a fee to make additional repayments?
Acceptable Answer: No. Ideally, you would like to be able to
make additional repayments on your home loan to be able to pay it off sooner
and save in interest. This feature has not been available for fixed loans in
the past; however there is now a range of fixed rate loans that allow you to
make additional repayments. Note: there may be a cap per calendar year on how
much extra you can repay on your mortgage.
8. How long will it take for my loan to be approved?
Acceptable Answer: There are 3 levels of approval.
A Pre Approval can be obtained instantly but is not binding and should never to
be used to make an offer on a property.
Conditional Approval is where you complete an application form and submit all
the supporting documentation to show that you can repay the loan. An assessment
is made that you can repay the loan and approval is now only conditional on the
property you wish to purchase. Conditional Approval normally takes 2-3 days.
Full Approval is where both you and the property you are purchasing have been
approved by the lender. You are now able to formally make an offer on the
property or attend an auction. Full Approval normally takes 5-7 days on top of
the conditional approval.
Note: Full approval normally requires a valuation to be
conducted on the property and if it currently has tenants a notice period must
be given to the tenants which can increase the approval time.
9. How long will it take for the loan to settle?
Acceptable Answer: The average time for a refinanced loan to
settle is approximately 4 weeks from when full approval is given. For property
purchases, the average settlement time is approximately 6 weeks from when
contracts are exchanged or the 10% deposit has been paid.
10. Where is the point of no return in accepting a loan?
Acceptable Answer: You can cancel a home loan application
without incurring fees up until the Mortgage Documents are prepared, this
normally occurs shortly after you have received Full Approval for your loan. If
you decide to cancel the loan after this time, you will incur costs including
mortgage preparation fees.