Tag Archives: Best Mortgage Rate

A Few Things to Ask Your Mortgage Broker

There are no silly questions.

Listed below are a variety of questions to think about when speaking to your mortgage broker:

How long have you been working in the mortgage industry?

Years of experience is essential when it pertains to taking care of challenging mortgages.

What type of education or licensing do you have?

You need to confirm that your mortgage broker is licensed by consulting the Canadian Association of Accredited Mortgage Professionals.

On what do you base your suggestions?

You should make sure that they are providing recommendations for the right reasons. A mortgage broker works for you, and nobody else.

Are there any special conditions that apply to this deal?

Bear in mind any undisclosed costs or unfavorable conditions attached to a no-frills low mortgage rate.

What fees/costs are connected with the rate you have estimated me?

Do not let concealed costs creep up on you. Regularly ask your mortgage broker to break out any charges and fees so you are appropriately notified.

Can I please see the lender’s letter of commitment?

If you are assured a certain rate, be sure to request a letter from the lender verifying that the reviewed rate is undoubtedly locked in.

What is your area of expertise?

Brokers typically facilitate more loans of one form than another. If you are purchasing a home, make certain you are dealing with a residential expert.

Are you affiliated with any mortgage associations?

Membership to some mortgage associations can possibly be a sign of the broker’s oath to provide the best Canadian mortgage rate available.

Can you provide me with references?

Ask for names of current clients or real estate agents with whom they have actually worked.

A combination of extensive research and appropriate inquiry should certainly assist you to narrow down your pool of prospective mortgage brokers for the best mortgage rate.

What are Blended Mortgages?

Blend your mortgage to improve your rate.

Quite a few people are wondering how to lower their current mortgage costs.

Generally, the mortgage penalties you incur to break your mortgage are set up as the greater of three months interest or the value of your Interest Rate Differential. If you’re going to break your mortgage, try and do it when your mortgage is sitting in the “sweet spot”– this is when your rate is not high enough to trigger IRD and thus you’re only required to pay the three months interest penalty.

Unfortunately, the sweet spot rarely comes at a convenient time. Also, most people will have trouble ever fitting into this scenario if their rate is over 4 %. If this is your situation, speak with your low mortgage rate planner about a blended mortgage. There are two options that most banks will offer:

Blend and Extend or Blend to Term

Under a Blend and Extend option, the bank will give you a brand new term at the current rate but ‘blend’ in your penalty to your new rate.
The Blend to Term option is the same idea but your term remains as is. For example, you would end up with the same two years left but at a lower rate with the penalty blended in.

If you are in that “sweet spot” a good Canadian mortgage broker will show you calculations on just how much you can save by breaking your best mortgage rate. If you’re subject to an IRD, a good planner will go over what blended options are available to you and take into account your time frame and overall goal to help you select the option that’s the best fit.

Should I Rent Or Buy?

Are you ready to take the leap into homeownership?

Weighing out the pros, cons, costs, and considerations is the best way to help you determine if you are ready to own a home.

Renting

Pros

Renting is a wonderful first step to living on your own. Given that it lacks long term commitment many rental agreements generally only last one year. Renting is an affordable and accommodating option for most people.

Cons

You’re essentially paying off someone else’s Canadian mortgage rate, as opposed to investing in your future. In addition to this, your rental agreement will have its own set of rules that you will be required to follow during your tenancy.

Buying

Pros

The current best mortgage rates enable you to borrow money cheaply right away. Furthermore, owning a home will help to provide you with a sense of security and comfort. You have freedom to update it as you please and improve on your investment.

Cons

You will need to be personally and financially prepared for homeownership. Expect your stress levels to increase given your monthly budget.

Costs

Renting

Renting provides low initial costs. Your costs are a predictable expense and thus easy to budget around.

Buying

Saving up for a down payment requires substantially more money. Also, there are hidden expenses that turn up unexpectedly. Finally, if you secure a low mortgage rate today, you will need to keep in mind that your payments may go up when it comes time to refinance.

Investment

Renting can be considered an investment if the money that you’re saving is going towards a future down payment. Buying a home can be considered a good investment only if the property value increases. It could also provide a possible source of income if you choose to rent out a room or convert the basement into an income suite.

Buying a home is a big investment. Make sure you’re ready to make the commitment. Contact a mortgage broker to learn more about the pros and cons of homeownership.

Mortgage Fundamentals: Pre-Approved Vs. Pre-Qualified

What’s the difference?

Loan App There are several stages of the Canadian mortgage rate approval procedure when you apply for a mortgage. It is essential to understand what they are and what they really mean.

What is Pre-Qualification?

This is the initial step of the low mortgage rate approval process wherein your mortgage broker takes a look at your overall earnings and financial obligation. The broker will determine your affordability by taking a look at your debt ratios (Gross Debt Service GDS and Total Debt Service (TDS)).

There are going to be a variety of conditions that you will need to meet in the pre-qualification before it is fully approved.

What is Pre-Approval?

Once accomplished, the mortgage broker will send your application to a lender who confirms your information with a certificate of approval. This generally includes a Canadian mortgage rate guarantee, which is typically valid for 60 and 120 days. You must comply with all the terms and conditions prior to approval.

What is Approval?

You have been fully approved for the mortgage at the best mortgage rate detailed in the agreement.

Advantages of a Mortgage Pre-Approval

A mortgage pre-approval enables you to lock in an interest rate. It offers additional security in understanding that you satisfy the initial financing requirements. It also enables any seller to understand that you are a serious buyer.

Most importantly, you understand clearly what you are able to purchase when you are buying a home.

Documents Required for a Pre-Approval

Personal identification
Income information
Bank accounts
Loans and other financial obligations
Proof of financial assets
Confirmation of the deposit and funds to pay for the closing cost

Each and every house hunt begins with a mortgage pre-approval. Start your quick online application today.

Preparing For Your First Mortgage

Four moves to make when getting ready for your first mortgage.

Step 1: Know What You Want

Should your mortgage be fixed or variable?

Fixed Mortgage Rate:

Enables you to “lock in” a predetermined rate for a set amount of time (term).

Variable Mortgage Rate:

This type of mortgage rate changes monthly according to the mortgage lender’s prime rate. Anyone handling a variable Canadian mortgage rate has to have the ability to manage modifications to their monthly payments.

Open or Closed Mortgage?

If you are not prepared to pay a sizable lump sum in the coming future, typically a closed mortgage would be the best option for you.

Open Mortgage:

An open mortgage is a versatile alternative that enables you to make substantial payments or settle the whole mortgage without a penalty. Open mortgage rates are more than closed mortgage rates. This form of mortgage allows you to settle large amounts of your loan prior to completion of the mortgage term.

Closed Mortgage:

Not too many individuals need the flexibility to settle their best mortgage rate prior to completion of the term. If you have a closed mortgage you are going to be penalized if you try to pay off the loan early and the charge can be rather substantial.

Step 2: Knowledge is Power!

Searching for the best rates can save you money on your low mortgage rate.

Step 3: Speak with a Mortgage Broker

Brokers are able to assist in determining what you will be able to manage, what your options are, and help you through the process.

Step 4: Discuss Your Mortgage

As soon as you have prepared, you are ready to put your mortgage broker to work by having them negotiate a rate.

Take the first step towards homeownership now. Get pre-approved for a low mortgage rate.

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