Questions To Ask Your Mortgage Broker

Discussing mortgage conditionsThe next time you shop for a mortgage, you should be prepared to ask a lot of questions of your mortgage broker. This will make it easier to get an affordable loan that will come with favorable terms. What are the questions that you need to ask the next time that you are shopping for a mortgage?

How Long Should My Loan Be?
Borrowers can generally opt for a mortgage that lasts 10, 15 or 30 years. In some cases, you can opt for a mortgage term of 15 years. While a shorter mortgage will reduce the amount of interest paid on the loan, it will also require you to pay more each month. While a 30 year mortgage comes with a higher interest rate, you will pay less per month. Talk to to your mortgage broker to determine how long you should take to pay off your mortgage.

What Can I Do To Lower My Interest Rate?
There are several options that you have when it comes to lowering your interest rate. A few ideas include shortening the term of your mortgage, asking for a fixed rate instead of a variable rate loan and doing whatever you can to increase your credit score. These are all easy ways that could potentially lower your interest rate by several percentage points. When it comes to a home loan, a cut of even a single percentage points could save you thousands of dollars over the course of the loan.

What’s The Difference Between A Variable And A Fixed Rate Mortgage?
A fixed rate mortgage generally gives you a lower interest rate as well as the peace of mind of knowing that you will have the same payment each month. The only downside to a fixed rate loan is that it is only available to those who have good credit. Borrowers with a low credit score or who lack a long credit history will generally have to go with a variable rate mortgage. As the name suggests, your payment will vary depending on the current interest rates. The good news is that you can refinance to a fixed rate mortgage as your credit situation improves.

How Large Should My Down Payment Be?
Your down payment should be at least 20 percent of the purchase price of the home. If you can’t put that much down, you will have to buy mortgage insurance until you have paid at least 20 percent of the price of the home. However, you can get approved for certain types of mortgages with as little as 3 percent down or less. Therefore, don’t be discouraged if you don’t have a large down payment when you go to apply for a home loan.

Getting a home loan is a complicated process. Make sure that you ask the right questions to help speed the process along. When you know what you are up against, it makes it easier to get approved for a mortgage without having to jump through a lot of extra hoops.

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Laura Timmons uses her freelance writing to help potential home buyers with the exciting process. That is why she always recommends Mortgage Emporium for the best Ottawa mortgage broker. They offer a variety of professional services including mortgage renewals, home purchase and refinancing options. To learn more, visit their website, http://www.mortgageemporium.ca/.

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