The mortgage broker typically acts as the borrower's fiduciary and acts as an agent to arrange the home loan transaction. Due to this relationship, the broker is legally obligated to operate in your best interest financially and disclose to you all material information regarding the loan. The broker owes you and the lender a responsibility of fairness and honesty.
The easiest method to prevent problems and conflicts is to ask the questions and ensure that you comprehend the conditions of the mortgage and each of the loan documents prior you sign. These legal obligations can be helpful in settling disputes that may emerge after the bank lends.
When acting as your agent, the broker submits your loan request to a lender on your behalf. Before you sign any loan request or other paperwork the broker produces for you to sign, make sure you have provided the broker with complete and accurate information. Never sign documents that are left blank. Before you accept the loan's terms, be certain that you are aware of them.
A pre-approval for a mortgage will be obtained by mortgage brokers based on the preliminary data provided by the borrowers. THAT IS NOT AN APPROVAL OF A LOAN. Only when the underwriter for the lender has reviewed and approved the necessary documentation is a loan approved. Conditions that the borrower must fulfil in order for the loan to be funded may also be included in loan approvals.
You have the option of a locked or fluctuating rate of interest on your loan. The financial adviser will "lock in" an interest rate when you request a loan lock if you decide to do so. There is a time limit on this lock. Always question your broker how long the rate of interest will be frozen and whether the lender would charge you for doing so. Always request a documented lock-in agreement that is signed by the financial adviser and specifies all of the lock-specific in's requirements.
You could decide to let your loan's interest rate fluctuate. This implies that on the day of closing, the interest rate on the loan will be set at the rate that is currently in effect for your loan program.
Keep in mind that interest rates might change every day, often more than once. The most appropriate strategy for you should be discussed with your broker.
Brokers typically represent you to the lender. Some lenders will allow you to conduct business directly with them without a mortgage broker. Whatever option you select, make careful to research the business. Try to use businesses that individuals you know have been always used and can provide feedback on the quality of the service. Rates ought to be competitive with those of other businesses. Whenever a deal seems too promising to be true, keep in mind that it probably is.