So now that we have started talking about asking questions of your broker on topics other than than just rate, let's keep expanding on that. All mortgages are not created equally, that is what makes one a different price than another. What questions should you ask to find out about different loans that are available? And some questions to find out more about your lender him or her self.
1. Is an adjustable rate mortgage a good idea for me? Why is it or why is it not a good loan for me?
1a. If it is an adjustable, when does it adjust? How much can the payment change and are there limits to how much it can change? (What is the worst case scenario? )
2. Can I see a side-by-side comparison of various program: fixed, adjustable, interest-only or option ARMs? I do better when I can read things.
3. What is a "non-conforming" loan?
4. What is an "Alt-A" loan?
5. If I don't put down 20% I need mortgage insurance, right? Are their other options available to me? My friend told me about lender paid mortgage insurance, does that mean you will pay it for me?
6. Is mortgage insurance tax deductible? The tax savings seems to be very small, is all this effort worth it? Should I just pay the mortgage insurance?
7. When will my mortgage insurance go away? How long if I just pay the regular payment, and assume the house value stays the same? What if the property increases in value? (Now that is asking for some forward thinking thoughts, which are not going to be based on fact. No one knows that property will be work in 5-7-10 years, but this question will show you if your broker understands MI, and when it makes sense to use, and when it makes sense to avoid.
8. What is an equity loan and how is it different from a equity line? Which is better for my situation and why?
9. How can I apply, when are you available, i.e. nights or weekends? Will you come to my house to sign the application?
10. What is your current method for following up with me after my loan closes?
11. Will you handle my file after application, or will you pass it on to your processor/assistants?
12. Where will the closing take place and will you be attending? (a broker who attends their closings, is rare, and worth their weight in gold)
13. Do work as a team or do you do everything yourself?
14. How quickly do you return calls, what is your goal to return calls in?
15. How much money do I have to give you upfront? Is it refundable if I do not close?
16. What methods do you employ for the safety, security, and confidentiality of my data?
17. Will my loan be sold or will you service my loan, can anything change if a new services takes over my loan?
18. How did you come to the product you recommended for me? What other options might there be, and why did you not recommend them?
19. Why are you in the mortgage business, why did you choose this career?
20. How long have you been in the business?
21. What percent of the loans you take do you close?
22. Why should I choose you as my mortgage broker?
Now you have 36 questions to ask your broker other than "what is your rate". Be an educated consumer, and the lowest rate does not make you an educated consumer.
Lets talk about the dollars and cents about calling around for dollars as I like to call it. How much do you think saving 1/8th% on your loan is going to save you a month on your mortgage? How does $8.01 per $100,000 of your loan a month. What is your time worth? More importantly do you want to trust your loan to a broker who sells price, and not relationship? Yes, just $8.01 a month!
Please be green and recycle. When you are done reading this post, please recycle it by forwarding it to someone you think who will enjoy reading it as well. Thank you!
If you or someone you know is thinking of buying or selling property in Connecticut or is looking to refinance their home in Connecticut -Please give Jon Sigler, Mortgage Banker (NMLS#119288) a call at 860-306-8029. Be sure to check out Jon's website www.4fhaloan.com and his blog.
As quoted in the New York Times "A Little-Known Loan Program", and in the Hartford Courant "Moving In:Couple Combining Households Buys In Newington" and "Moving In... New Britain"
Connecticut Magazine 2013 Five Star Mortgage Professional Award Recipient
This is not an offer or commitment to lend. Articles, information and commentary are offered for informational purposes only, and should not to be relied on as legal, tax or financial advice. Consumers should retain their own legal, tax and financial professionals for such advice.