When it comes to making decisions for your financial future, your mortgage broker should be the friend you tell everything. It is very important to establish a clear communication with your mortgage broker. The three major points to discuss are:
1 -Short and long term goals
2- Financial flexibility
3- Source of funds
Short and long term goals
In order to get the mortgage that best suits your needs, your broker should know both your short & long term goals. Where will you be in 3-5 years, for instance if a home renovation is in your near future, you may want to consider refinancing your mortgage in order to pay it. In this case, you would need a mortgage with the lowest prepayment penalties and fees. Conversely, if you are purchasing a home with no intention of moving, keep in mind that you may want to shop around for the lowest interest rate. In which case, it’s important that your mortgage broker fully understands your whole situation prior to looking for a mortgage that best suits your needs.
Your monthly expenses will have a great impact on the type of mortgage you will need, for example if you have several set expenses, than a fixed rate mortgage is for you. In a fixed rate mortgage, all payments are the same for the life of the term. Conversely, a variable rate mortgage means that the interest payment will change over time and in turn your monthly payment will change. Hence the importance of your mortgage broker understands your financial situation and how much flexibility you have.
Source of Funds
If you have a traditional source of income than you have many different options available to you. When you own a small business or do small contract work than your options are more limited. Always be clear and precise about your source of income when speaking to your mortgage broker so they can find the correct lender to work with your specific needs.