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  11 Critical Questions To Help You Choose The Right Mortgage
     

My name is Deborah Lazareff. As an independent mortgage agent, I work for you NOT the banks. This checklist is just one of the ways I can help you get a better deal on your next mortgage, refinance or renewal.

Before you even pick up the phone to call a lender, give some thought to your financial situation and needs, both today and in the future. No lenders can provide the best mortgage for you without understanding your needs. And they’ll never understand your needs unless you can explain them clearly and specifically.

What I’d suggest is that consider some of the following issues. Only then will you be able to answer the questions any responsible lender will ask in order to help you choose the right mortgage, rate and features.

  • How long are you planning to live in this home?
  • How are your finances likely to change over the next few years?
  • Which are you more comfortable with: mortgage payments that always stay the same OR payments that rise and fall with the Prime rate?
  • How soon would you like to be mortgage-free?
  • When will your children be entering college or university?
  • When are you thinking of retiring?

OK, now that you have your needs and goals in mind, you’re ready to start making some calls. As I said, any responsible lender will ask you a lot of questions in order to narrow down the options and select the right mortgage for you and your family. But if you want to make sure you’re getting the very best deal available—after all, that’s exactly what you deserve!—you have to ask some questions too.

Today’s mortgage market is very complex, with more choices than ever before, innovative new features being introduced every day, and unexpected conditions and fees hidden in the fine print. The best way to protect yourself is to go through every item on this checklist with each lender BEFORE you go any farther.

  1. Will you give me a detailed outline of the costs associated with my mortgage? Most reputable lenders will give you a Mortgage Disclosure Statement that outlines the financial terms of the mortgage, including amount of loan, interest rate, repayment schedule, etc. If the lender doesn’t offer this statement, be sure to ask for it. It’s essential to know how much the mortgage is going to cost before you commit to anything.
  2. Can you give me an estimate of my closing fees? In some provinces, the Disclosure Statement also includes approximate closing costs and legal fees. These fees are part of every loan and cover the services provided by the lender and other companies involved in the loan process. If your lender doesn’t automatically provide this information, be sure to ask for it. It’s important to know up-front what your closing costs are likely to be, so you can budget for them.
  3. What’s the minimum down payment for this loan? A typical down payment is between 5% and 20% of the property value. If your down payment is less than 20%, you’ll be required to pay an additional premium for mortgage default insurance.
  4. Would you recommend a closed mortgage or an open mortgage? This depends on your needs, financial situation and how soon you hope to pay the mortgage off. An open mortgage gives you total freedom to pay off the full amount at any time, but you pay a higher interest rate in return for this flexibility. A closed mortgage has a lower interest rate, but your term is locked in for a set number of years.
  5. Is there a prepayment penalty on this loan? If you choose a closed mortgage, you’ll be required to pay a prepayment penalty if you pay off the mortgage early. But an open mortgage lets you pay off the full amount at any time without penalty.
  6. What documents will I need to provide? Every mortgage requires you to provide some documents, but the number of documents can vary. Unless you qualify for a “no-doc” loan, you’ll usually be required to provide full documentation of income, assets, debt payments, credit history, etc. Make sure you find out in advance exactly what the lender needs.
  7. What are the qualifying guidelines for this loan? Your lender should be able to match a mortgage to your specific needs and abilities. If you’re a first-time buyer or require a “no-doc” loan, your lender should make available specialized mortgages with qualifying guidelines that closely match your particular situation.
  8. How long does it take to process a loan? Be sure to have the lender give you the most accurate timetable possible. The approval process can be completed in as little as a few hours, and the funding of the loan will take a few days. If you’re on a tight schedule, be sure to ask if your lender can accommodate your needs.
  9. What are some of the things that could slow the approval process? Nobody likes surprises, especially lenders! If the information you’ve provided is complete and accurate, there should be no delays. That’s why it’s important to know up-front which documentation the lender will need so you can make sure everything is in order and delivered by the deadline.
  10. What if my information changes before the loan is funded? If during processing, your income changes, you take on a new debt, you get married or divorced, or an undisclosed credit problem comes to light, your loan will be delayed. Make sure you know exactly what the lender needs, so you don’t accidentally leave anything out or forget to update some information.
  11. Can I contact any of your existing clients? It’s easy for a lender to tell you how great the service is. But the only way to know for sure is to talk to some previous customers. If the lender is hesitant to put you in contact with actual customers, ask to see some recent client satisfaction surveys. The more willing the lender is to share client opinions with you, the more confident you’ll feel in proceeding.

Use this checklist for each lending institution you contact, whether you speak over the phone or in person. It’s a good idea to do all this research on the same day since mortgage rates can fluctuate daily. Be sure to record the company name, contact name, type of mortgage quoted, interest rate, etc. along with all the answers to the questions.

If you have the time, energy and patience to do this research on several different lenders, you’ll likely end up with a reasonably good mortgage. But if you want the ABSOLUTE BEST mortgage for your specific situation and goals, why not get professional help?

As an independent mortgage agent, I have access to dozens of lenders and hundreds of mortgages AND I know exactly what to look for. After analyzing your needs, I can shop the market for the rate and features that will achieve everything you want, at the lowest possible cost. And since I’m normally paid by the lender, there’s NO CHARGE to you for my expert, objective service and advice.

I hope you’ve found this checklist useful. It gives you a really good idea of what’s involved in getting the right mortgage. If you choose to use this checklist to do it yourself, I’m glad I’ve been able to provide assistance.

However, if you’d like to make the whole process faster, easier and more affordable, please call me at 403-852-2556 to set up your FREE no-obligation consultation. I’ll sit down with you, analyze your requirements and set up a program tailored to your abilities, goals and comfort level. Call me today!

Sincerely,
Deborah Lazareff

 
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