Whether you’re purchasing a new home or refinancing your current home, finding the right mortgage to match your personal situation will benefit your finances for years to come.

Here are ten important questions to ask your mortgage broker before making a final decision.

Which type of mortgage is best for me?

Never presume that you know for certain which loan type you want. There are new types of mortgages coming to the market all the time and it’s your mortgage broker’s job to stay on top of what’s available. Always shop for your loan with an open mind. Be honest about your finances and goals and listen carefully as your broker explains the pros and cons of different loan types.

Do I qualify for any special loan programs?

From down payment assistance to first-time home buyer programs and government-backed mortgages, a number of options exist to help buyers in unique situations be approved for a loan.

How much down payment do I need?

Putting 20% down on a home is fantastic but it’s not a rule. Different loans require different minimum down payments. Ask about options for more flexibility if you have other places you’d like to use your cash.

What is my annual percentage rate?

Everyone knows the importance of getting a great interest rate on their mortgage but not everyone understands the difference between your rate and your APR. The annual percentage rate takes into account the fees embedded in the loan, to give you the true cost of borrowing over the life of your mortgage.

Can you lock my interest rate?

Lenders will sometimes offer borrowers a rate lock period to make a final decision. Confirm that there is no charge for locking the rate. Most lenders will lock a rate for free but some do not.

Will I have to pay PMI? How much is it?

No matter how much you’re putting down on a mortgage, always confirm whether you will or won’t have to pay private mortgage insurance (PMI), and if you do, how much your monthly premium will be and at what equity level you’ll no longer need to pay for it.

How much is my monthly payment and what will it include?

Most loans are set up with an escrow account where you’ll be able to pay 1/12 of your homeowners insurance premium and property taxes directly to your lender each month instead of sending these two lump payments separately. Other loans only collect principal and interest and leave the responsibility for taxes and insurance to the buyer. Both setups offer pros and cons, but always be certain that you understand exactly what is or isn’t covered with your monthly payment.

Is there a prepayment penalty?

Most loans these days do not have a prepayment penalty, but don’t leave it up to chance that yours doesn’t.

What are the lender fees? Which other costs will I need to pay at closing?

When choosing a mortgage, total closing costs will always be presented to you in the form of an estimate, meaning that you won’t know the exact closing costs until after you’ve agreed to the loan. What you can ask for, however, is a list of the fees and expenses you will be responsible for.

When will my loan close?

If you’re moving into a new property, knowing your closing date as soon as possible will make it easier to make the other necessary preparations. Find out if you’ll be signing in-person or doing a virtual close.

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