Haven’t you ever wondered how you can get the best mortgage possible while saving money in the process? Here’s how to get the best mortgage possible. Learn how to easily avoid downfalls and save thousands of dollars in the process with these helpful tips below.
1. Look for the Best Deal & Look Beyond Banks
It’s easy to stick to what you know, and feels comfortable. Heading to your bank to apply for a new, second mortgage or refinance your existing one may seem like to only option open for your consideration. The same is true when it comes to your mortgage renewal, where you received your mortgage from a bank. A bank will send you an automatic notice of renewal and sometimes it may just seem easier to agree to the renewal.
In any case, this may not present you with the best deal or rates on your mortgage. Shopping around and getting more than one quote is the the only sure-fire way to find the best deal for you. Whether you’re going to use these quotes to put pressure on your bank to do more for you, or you’re planning on pursuing one of the better quotes, you simply can’t go wrong. You may not always find success with bank negotiations, because banks adhere to stricter rules when compared to mortgage brokers.
For instance, in most cases a mortgage broker can get you a lower interest rate that what the bank is offering initially. Even one percent lower and you could be looking at substantial savings between $5,000 and $10,000.
2. Lower Interest Rates Aren’t Always the Best
Since a mortgage is probably the biggest investment you’ll ever make, it’s very important to be cognizant of any repayment privilege restrictions or punitive exit fees that accompany some lower rates. These can cause you low rate to become rather expensive.
For instance, the Bank of Montreal offers a “No Frills” low interest rate on a five-year fixed mortgage starting at 2.49%. However, the restrictions on this particular mortgage only allow borrowers to pay 10% of the total mortgage in annual lump sum, without enduring a penalty, where typical mortgages generally allow 20%. To break a bank mortgage you would have to sell your home or opt-in for another financial product.
Before finalizing your decision, explore your options, review conditions and consider restrictions.
3. Other Considerations Beyond Low Interest Rates
You should know that there are other things to consider beyond the lowest interest rate, including fixed or variable rates.
The type of rate you choose would solely depend on your comfort level. Variable rates have the ability to rise or fall depending on the Canadian economy. If you’re looking for a bit more security and stability you might want to consider a fixed rate mortgage. Fixed rates will remain the same throughout the life of your loan.
Want to learn more about your mortgage options, rate types and interest rates for your specific situation? A mortgage professional at AKAL Mortgages can educate you to help you start saving and get the best mortgage today.
When we say YES! We stand behind our promise.