Great Mortgage Loan Tips for You

Mortgage loan agreement application with key on house shaped keyring

As you start your journey in finding the best mortgage rates you can find, you will surely encounter companies that would try to lure you in with the promise of the lowest rates on the market. Before you get swayed, you should understand that mortgage rates differ on various points that make it difficult to determine what an exact rate will be, especially because every person’s situation is unique. Additionally, rates are always changing. That’s why posted rates usually fluctuate with no warnings at all. In fact, it’s highly possible that by the time you apply for an insurance payment plan, the rates that were advertised are no longer applicable.
Mortgage competition is fiercer than ever but that can work to your advantage – you can negotiate to get better terms on rates, restrictions, and rates – which you can do if you have enough knowledge.
First, you need to remember that the rates posted (both in online ads or at the bank) are just your starting point. Not only are these rates high but they also probably come with catches like restrictions on making lump-sum payments or extremely high fees when you have to leave the mortgage before the renewal.
To help you out, here are some tips that you should keep in mind when you’re finding the best mortgage:
It Pays to be Prepared
Your bank (the one where you have your chequing account) can do a basic mortgage pre-approval document, but that will not be enough to get the deal. You will also be asked to present an updated copy of your personal credit score, tax assessments from the last couple of years, and a detailed accounting of your income and debts.
Aside from your down payment, you are going to need enough cash to cover closing costs which would amount to roughly two percent of the purchase price. This would cover legal fees, title insurance, mortgage insurance, and land transfer taxes. You should be ready with cash for utility deposits for when you move in. If it’s a condo you’re moving into, save some for maintenance fees as well.
Come Up with a Good Strategy
This part is where you’re going to need the help of a mortgage broker. Don’t forget, however, that they are paid not by you but by the financial institution that they will bring your business to. You should be familiar with the basics of mortgage like how a fixed-rate mortgage is different from a variable-rate mortgage, as well as the differences between a closed and open mortgage. Before making a decision, do your research on the terms available to you. Take time to consider features like prepayment options that allow you to increase payments without penalty and make lump-sum payments.
Go for What Works Best for You
Are you starting a family? Perhaps you’re expecting an upcoming promotion. These changes should always be taken into consideration. As do unexpected life events like a divorce or an illness which can cause you to pay a huge break fee. Ask the lender about their break fee. If you think the property is going to require renovations, ensure that you get access to a home-equity line of credit. Do not be intimidated because you are a first-time buyer. Don’t feel like you should go for a one-size-fits-all mortgage that could look cheap but is actually brimming with expensive restrictions.
Don’t Forget That You Have More Leverage Than You Probably Think
The mortgage lending market is competitive, and believe it or not, first-time buyers are highly prized clients. Of course, there is also a pressure on lenders to reach their goals of getting new business.
Your first mortgage is not just like any other loan. It is an important element that will, later on, help determine your lending risk as well as your net worth. So make sure that you are ready before you make any decisions regarding your mortgage loan.