Questions to Ask Your Mortgage Broker When Refinancing
Refinancing with a mortgage broker instead of a single lender can save you time and money. If you choose to employ a mortgage broker when you refinance, the process can be a little confusing. When talking with your mortgage broker, there are a few questions that you need to ask.
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How Are You Paid?
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When you choose a mortgage broker to work with, you need to find out how he is compensated. Mortgage brokers are compensated in many different ways and it could have an effect on how much you have to pay for your mortgage. If the broker is compensated through the yield-spread premium, this means that your interest rate on the loan will be higher than what it could be. The mortgage lender then pays the broker the difference.
How Much Experience Do You Have?
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When you decide to go with a mortgage broker, you need to ask her about the amount of experience she has. You want to work with a mortgage broker who has been in the industry for several years. This way, she will have many relationships with lenders and she can get you the best deal possible. Working with a new mortgage broker may not be very fruitful and you could end up wasting your time.
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How Long Will the Process Take?
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Ask the mortgage broker how long it will take to complete the transaction. This is important information when you are trying to complete your refinance in a timely manner. You may need to get access to the cash in your home equity for a specific project or purpose. If the broker is extremely busy, he may not be able to get to it as quickly as you would have liked and you will miss out on the opportunity.
How Will You Lock My Rate?
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When you work with a mortgage broker and find a mortgage that you like, you can tell the broker to lock your rate in. When this happens, your rate will be fixed at that amount while you complete the process of refinancing. Some brokers will simply tell you that your rate is locked in and then try to gamble in hopes that the rate will go down even further. They will pocket the difference between the two. If you want a rate locked, you need to make sure that your broker guarantees the lock.
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