Buying Property: Questions to Ask Your Mortgage Broker (After You’ve Selected A Broker)
Now that you've gone through the difficult process of finding the right mortgage broker for you and your needs, there are some more questions to ask yourself to make sure their lenders have your best interest in mind.
After going through the difficult process of selecting the right mortgage broker for you, there are key questions you can ask your selected broker to ensure that their search for a lender has your interests at heart.
Below, we’ve listed some questions to get you started.
What commission will you receive from the lender?
This is a very important question – it can help you identify whether your mortgage broker has found the best mortgage deal for you, or whether it’s a deal that purely benefits their pocket through commission and procuration.
Therefore, it is always a good idea to check what commission your broker will receive from the lender, so you can figure out their motives.
What deposit do I need?
Although a smaller deposit may seem very appealing, this can lead to higher rates on your mortgage and increase your cost overall. Your mortgage broker should always advise a higher deposit, as a deposit serves to reduce the risk for the lender.
The larger your deposit, the less risk of the lender being left out of pocket if you are unable to make your mortgage payments. So, although some schemes allow you to put down a deposit of as little as 5% of the property value, you should definitely aim for a deposit of around 15-20%, as you will only need to borrow 80-85% of the property value from your lender.
What is affordable for me?
Your broker can help you think long-term and look for ways to maximise your deposit, such as through certain help to buy schemes or suggesting that you revise your property search and look for properties that are slightly lower in value.
They may even advise a strategy, which involves buying a starter home to help secure a better deal on your mortgage to ensure you don’t get locked into a mortgage with poor rates that will take you far longer to pay off.
What is the current interest rate?
Interest rates can be very confusing. Many lenders will tempt you with low interest rate offers that increase after the first 4 or 5 years. Thinking about the lifetime of your mortgage is key to finding the best lender for you, and a mortgage broker can help you determine whether the mortgage as a whole is affordable within your means, as opposed to just cheaper initial payments. They can even help identify ways to lock in lower initial payments for an extended period, at the right time.
What mortgage can I afford?
By questioning your broker, you can gain insider knowledge about the type of mortgage you can afford based on your current circumstance, as well as helping you decode the wordy small print.
The amount you can borrow is determined by your income, as well as a number of other factors, and can in fact determine how much you will be able to pay for your next home. Your mortgage broker will also be able to offer you in-depth advice on steps that can be taken to change your situation, such as taking out a credit card to help build up your credit score if it’s too low.
How can you benefit my finances in the long term?
Using a mortgage broker is meant to reduce your spending in the long term, as they are qualified to understand how small differences interest rates can hugely impact the amount of money you spend on your property. So, be sure to ask your adviser explains how their service is benefiting you financially.
How can I help?
If you’re feeling overwhelmed by the process of getting a mortgage – don’t panic!
My name is Gareth Evans (also known as Big G). I have tonnes of experience as an estate agent and mortgage adviser, and I can offer advice on getting the best mortgage deal for you. So, if you want some support with this process, give me a quick call on 01905 426000.
Written by Gareth Evans, Mortgage Adviser & Director