Four Questions to Ask an NJ Mortgage Consultant Before Giving Your Business

The process of obtaining a mortgage loan is not only overwhelming but also confusing. You want answers, but you actually don’t even know what questions to ask. Therefore, knowing the questions to pose towards an NJ mortgage consultant will help you to prepare and align yourself with the mortgage product that fits your unique needs and circumstances. Following are four questions to ask your NJ mortgage consultant.

Question #1 For Your NJ Mortgage Consultant

Do you represent a mortgage broker, mortgage banker or lender, consumer finance company or a financial institution?

• This is extremely important because knowing the qualifications of the NJ mortgage consultant will help you to understand what they are capable of and/or their angle. For example: a loan officer works for a mortgage broker company and will assist you in finding a lender. A mortgage banker, on the other hand, is a lender who directly makes real estate loans to consumers.

Question #2 For Your NJ Mortgage Consultant

What is the interest rate that the NJ mortgage consultant is offering and is it a fixed or variable rate? Also, is this the best possible rate based on my credit score?

• The interest rate determines the amount lenders charge you to use their money and is usually quoted as a percentage. The rate can be fixed (meaning that it remains the same throughout the loan) or variable (the interest rate changes during the term). Ultimately, a lower interest rate results in lower monthly payments or the ability to buy a higher priced home.
• Your credit score is your history of repaying debt and is the main source lenders use to determine interest rates they offer you. To obtain the best possible interest rate, it’s not a bad idea to shop around to different mortgage consultants. In general, a high credit score should result in an offer of a low interest rate.

Question #3 For Your NJ Mortgage Consultant

Are you locking my interest rate and if so, for how long?

• A rate lock is when the NJ mortgage consultant/lender/broker “locks in” a stated interest rate for a specific period of time – usually 30 days. This means that if the interest rates should rise, you will still receive the quoted or “locked” rate. You should ask for a written verification on the rate lock.

Question #4 For Your NJ Mortgage Consultant

As an NJ mortgage consultant, how much money will you be paid?

• An NJ mortgage consultant brings borrowers and lenders together and receives compensation for providing this service. The fees are usually negotiated and are disclosed on various line items on your HUD statement, including broker origination fee, processing fee, and application fee. A mortgage lender may also pay a mortgage consultant a yield spread premium (YSP), which is a payment to the broker from the lender for selling the borrower a loan at a higher interest rate than the borrower would otherwise be charged. This is generally acceptable if there are no other fees being charged by the broker.