Important Questions to Ask a Mortgage Broker Before You Refinance

June 22, 2017

Important Questions to Ask a Mortgage Broker Before You Refinance

A lot of borrowers work with a mortgage broker to help them get the best deal on a new loan. The advice, guidance, and connections of a broker can be invaluable during your refinancing process. However, not all mortgage brokers will give you the information you need, including the real risks of your chosen loan as well as the potential benefits of any alternative products.

To get the most out of your broker experience – and help you get your dream refinanced loan – here are the essential questions you should ask your mortgage broker when refinancing.

1. What services do you provide as a broker?

How does your process work? You want to get a good idea of what your broker’s concept of their own services looks like. Are they interested in getting you the best deal? Helping you find the best loan considering your financial situation? Will they take a comprehensive look at your entire financial situation?

2. What are the benefits of refinancing now?

Are there advantages outside of just lowering my rate and my monthly repayments? Refinancing is about so much more than just lower rates; you also need to consider the different features you can take advantage of to pay down your loan faster or whether switching to a fixed rate loan in order to stabilise your repayments for a few years might be the best option. You want your mortgage broker to be able to explain all the benefits and all the possibilities before you refinance.

3. How much will it cost me to refinance?

This is a really important question as many people walk into the process without a realistic concept of how much refinancing can cost. Even if your broker steers you towards refinance rebates and a new lender with plenty of fee discounts, you’ll still end up paying thousands to refinance. You will benefit more from a broker who can give you a detailed look at the costs of refinancing, and who is able to highlight where those expenses can be reduced.

4. Is refinancing worth it for my situation?

Refinancing is expensive, but if you can refinance to a lower rate, it can be well worth it. Ask your mortgage broker to show you how many months it will take to break even through your lower mortgage repayments.

5. Can you explain the different loan features?

Today, there are a lot of features that lenders will use to entice you to sign up with them. Some may be useful for you, while others you may never take advantage of. Your broker should be able to explain what each feature is, how it works, and help you determine if it is something you should look for in a new loan.

6. Should I apply for a fast refinance loan?

Refinancing can take several weeks or more. Depending on your situation, it may be smart to look for a lender who will do a fast refinance. What can your mortgage broker tell you about this option – is it useful for your needs? Will you be eligible? Are there lenders who will complete a rapid refinance without charging extra fees? What about for a low doc loan?

7. Are there any penalties I should be aware of?

There are almost always penalties. A good broker will let you know all the possible penalty fees you’ll have to pay in different scenarios such as early exit or making early repayments.

8. How will refinancing help me reach my financial goals?

Refinancing is all about making your home loan work for you. It’s not just about reducing your mortgage repayments, but also setting you up to pay down your loan faster, to consolidate debt, invest, or achieve any other financial goals you have.

A reliable mortgage broker will likely answer all of your questions before you even ask. It is their job to help you refinance and to connect you with a lender that perfectly suits your needs, expectations, and eligibility. However, don’t assume that this is the case; pre-arm yourself with these questions, and make sure you find a broker that is willing to provide genuine assistance as you make one of the biggest financial decisions of your life!

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