In order to find the best mortgage deal in Canada, you need to ensure that you are working alongside the best mortgage broker in Toronto.
However, if it is your first time investing in a broker you might get tongue-tied and not interview the broker correctly. This can lead to you picking a service provider who is a novice.
Brokers mostly work alone, so the key to finding the best broker depends on how well you interview him/her. Well, worry not! This blog will cite a few questions to ask your mortgage broker to ensure you pick the best one.
- What Kind of Loan Would Suit You Best?
Any good broker is like an experienced surgeon. Just like a surgeon won’t suggest an operation without scrutinizing your medical condition, a good broker won’t randomly suggest the right kind of loan without assessing your financial condition.
He/she will ask to see your credit reports, bank receipts, and other documents to understand which type of loan would suit your purpose best.
Depending upon the results your mortgage broker in Toronto will notify you whether you need Adjustable-Rate Loans, Negative-Amortization Loans, Fixed-Rate Loans or otherwise.
Additionally, he/she will also explain these along with several noted pros and cons of each loan.
- What is the meaning of Origination Fees and Discount Points?
The next question to ask your mortgage broker is about discount points and origination fees.
Your broker will generally explain that each “point” is equivalent to 1 % of the loan amount. This means, 3 points on a $100,000 loan costs $3,000.
Origination fees are sometimes charged by a broker along with the points.
Now if you want a lower interest rate, the trick is to “buy down” points.
- What Stands for Annual Percentage Rate and Interest Rate?
Annual Percentage Rate (APR) is the answer to a complicated calculation that is a result of the division of the loan’s term by the interest rate, lender’s fee, and other relevant costs.
- What Amounts to the Total Cost?
The next question to ask your mortgage broker in Toronto is on total costs. The entire cost of the loan doesn’t simply cover the lender fees all in all. A lot of it goes into ancillary costs like:
- Credit Report
- Lender’s Title Policy
- Recording Fees and Taxes
- Does the Broker Offer Loan Rate Locks?
Interest rates are always changing or fluctuating and this is why you need to find that mortgage broker in Toronto who offers loan locks.
These loan locks allow lenders to lock loans by charging one to two points. So, ask your selected brokers on,
- Does this lock-in protect all costs of the loan?
- Will, there be a fee levied if the broker is protecting your interest rate?
- Will the loan lock be provided in writing?
- What is the time period of this lock?
Well, lastly interview the mortgage broker in Toronto and ask about his experience and contacts. Once you are satisfied with the answer invest away!