Refinance Mortgage Broker: What You Need to Ask Your Mortgage Broker

Refinancing your mortgage can be a stressful experience for many homeowners. If you decide to use a mortgage broker to find your new mortgage, there are several questions you need answered before signing for a mortgage. Here are several tips to help you find the best mortgage offer when dealing with a broker.

What is the Interest Rate Guarantee?

The interest rate you qualify for is one of the most important aspects of your mortgage. This interest rate and the term length you choose will determine your monthly payment amount. Interest rates change on a daily basis so it is important to have your interest rate guaranteed in writing. The mortgage lender also needs to grant you enough time with the guarantee to close on the mortgage. If you are unable to close on the loan before the guarantee expires the lender could raise your interest rate. Don’t be afraid to ask questions if you do not understand your loan contract.

What Could Delay Closing?

You will want to close on the new mortgage as quickly as possible so you do not lose your interest rate guarantee. Before you apply for a new mortgage you should gather all the documentation your lender might request. This includes the most recent statement from your current mortgage, most recent bank statements, pay stubs, and your homeowner’s policy. Keep in communication with your lender or broker and return all documents in a timely manner.

Does the New Mortgage Have a Prepayment Penalty?

This is a very important question to ask your lender or mortgage broker. If your mortgage comes with a prepayment penalty and you sell or refinance you will be required to pay the penalty. Ask your broker if there is a penalty for early repayment, how it is calculated, and when the penalty expires. The average homeowner in the United States refinances their mortgage every four years so it is important to choose a mortgage that does not include this penalty.

You can learn more about your mortgage refinancing options, including common mistakes to avoid by registering for a free mortgage guidebook.