Last Updated on Jun 1, 2021 by James W

Mortgage advisors are the mediums between borrowers and lenders. The process can be stressful for the first experience of a person in the mortgage market. To know which mortgage is best for you, the current interest rate, the market trend, etc., is extremely difficult for an average person. It is where a professional mortgage advisor is a better option than dealing with everything alone. These highly experienced professionals know which financial solution is suitable for you, and they can take care of all the paperwork as well. Most importantly, they know how to negotiate the best deals for you. However, before you sit with a reliable mortgage advisor and sign any document, here are a few essential questions you should be asking your Advisor:

1. What Type of Loan is Best for Me?

Every type of mortgage will get you the same thing; only the process will be different. What kind of loan is best for you is based on your financial situation, and every reputable lender would want to know more about you? It is where your mortgage advisor comes in and gathers information, and recommends the best option. Your Advisor will assess all the essential details, such as your credit score and whether you plan to sell the house in a few years. And then identify the best mortgage for you. Before you move forward with a plan, you must be aware of what you’re doing. Therefore, ask your mortgage advisor about the pros and cons of the best type of loan for you.

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2. What Are the Qualifications of my Mortgage Advisor?

Whether you go for conventional brokers or independent mortgage advisors, it is essential to cross-check their qualifications and license. When you choose an advisor, you should show interest in their professional background and experience. Before allowing them to source a mortgage for you, make sure you ask them to reflect on their experience and whether they own a broker’s license or not. They should be registered with a well-reputed association and should respond to your inquiries honestly. The trend these days is to go for online mortgage specialists or independent mortgage advisors who can access the entire market and streamline the process for you through innovative technology.

3. Is Fixed Rate Mortgage Better Than Variable?

Most borrowers get confused about choosing between fixed and variable rate mortgages. With a fixed-rate mortgage, the interest rate will remain fixed for a specific period regardless of the changes in the market trend. On the other hand, the Standard Variable Rate constitutes the increase and decrease in monthly payments according to the changes in the interest rate. For first-time homebuyers, a fixed-rate mortgage is a sensible choice and also for those who are risk-averse. That is why you must ask your mortgage advisor about which mortgage type to go for according to your fluctuating financial situation.

4. What is the Interest Rate?

The interest rate has a significant impact on your mortgage plan. That is why you should get straight into the details about what the interest rate will be when you hire a mortgage advisor. An experienced advisor will take their time to explain to you the complexities involved in determining the interest rate. Your broker will help you understand the Comparison Rate, which compares different loan products against another. They will help you choose between fixed and variable interest rate home loans and discuss the Annual Percentage Rate (APR).

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5. What Kind of Penalties Are Involved?

When you sit down to discuss the type of home loan you will take, don’t forget to examine the penalties associated with the agreement. You will have to face a lot of trouble in the long run if you don’t know what kind of damages you have to pay in case of breach of the agreement. An average person who will buy a house for the first time does not have any idea about the intricacies of a financial deal. That is why it is essential to ask your mortgage advisor beforehand about what kind of penalties you may face. You should especially ask for clarification regarding prepayment penalties as they are no longer valid in many states. Your Advisor should also guide you about the prepayment terms and which kind of mortgage tends to have costlier penalties.

6. How Long Will It Take to Get Approval?

Every home buyer wants a quick and clean mortgage approval. However, every buyer’s position is different. Only a mortgage advisor can give you all the information and leads about fast approval. Generally, mortgage approval occurs in three stages. A pre-approval which you can have instantly; a conditional approval typically takes up to 2-3 days; and full approval, which may take up to 5-7 days. The approval time may vary if a valuation is required to show on the property or a notice period has been given to the current tenants.

Final Thoughts:

When it comes to something as significant as getting approval for a home loan, it’s better to be extra-prepared and cautious. So, before you start to scribble on the dotted line, sit down with your freshly hired mortgage advisor and skim through some critical questions. You aren’t necessarily limited to these specific questions, but they are a point to start. It is in your best interest to request clarification and transparency regarding your home loan options and what impact they might have on your future.

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