Owning a property for the first time is such an exciting experience. However, it can also be a little daunting, especially when you are faced with news about the rise in Canadian mortgage rates in the present market. As a first-time homebuyer, the prospect of getting stuck with a mortgage rate that is more than what you can afford maybe a little disheartening. That is why the following tips are essential to guide you in finding and landing the best deals in today’s Canadian mortgage market.
Tip 1 – Ask for your credit report from either Equifax or TransUnion in Canada. You must know what your present credit standing is so that you can narrow down your list of possible lenders.
Tip 2 – Search for the present base mortgage rates of the Bank of Canada. It is sometimes hard to keep up with the changes in the base lending rate. That is why it is necessary to keep yourself posted mostly if you are on the market for a new home. Lenders all over Canada are using this as their basis for their given Canadian mortgage rates.
Tip 3 – Set an appointment with some of the major financial companies and get an initial quote from them. Before going to the meeting, it is essential that you know exactly what you are looking for and that you are realistic with your goals. Setting an appointment with a bank that you deal with regularly might also present some perks since you are already a client of that bank.
Tip 4 – Aside from the primary mortgage companies, look at what local, provincial banks and credit unions have to offer. A lot of these companies have a variety of lending criteria, and you might find some superior discounted rates that the bigger banks cannot provide.
Tip 5 – Look for a mortgage broker you can trust. Trust can be earned, especially if the person or company you are dealing with has excellent experience in finding the best deals in the market today. Brokers and agents are also knowledgeable in mortgage rates and how to get the best rates which is why you need their help. They can do the shopping for you, and you can land the best deals without even lifting a finger.
The good thing about searching for the lowest and the best Canadian mortgage rates these days is that you have the internet to help you and guide you in your search. You can also use online tools like the mortgage calculator so that you can get the bigger picture before you sign up for any deal.
Saving Money through Variable Rate Mortgages and Refinancing Strategies
It is all too common for Canadians to miss out on mortgage-related savings, whether in larger centers such as Calgary and Edmonton or smaller centers across the nation.
In fairness, most of us are unaware of the options and strategies that represent money-saving opportunities. But with the help of a good mortgage broker, it can be easy for any homeowner to benefit from options such as variable-rate mortgages and mortgage refinancing.
Variable Rate Mortgages Overview
Variable-rate mortgages generally offer the lowest available rates in Canada, and a good mortgage broker will have the know-how and connections to negotiate the best quality in the nation on your behalf.
Since the variable rate mortgage adjusts as the prime rate rises and falls, your payments will adjust each month as interest rates change.
While variable-rate mortgages represent the inherent risk of your payments potentially increasing, the key is to remember that:
- from the start, your costs will be among the lowest available, and,
- Your prices could also decrease if the prime rate drops.
And should you later wish to lock in your mortgage, you can do so without penalty to any fixed-rate mortgage that is equal to or greater than the remaining term on your mortgage.
There are many variable rate products available, and an experienced mortgage broker can help you decide which product may be best suited to you.
When Do You Refinance Your Mortgage?
It is not uncommon to discover that refinancing your mortgage could save you thousands of dollars.
But how do you know if the conditions are right for such savings? If the annual interest rate on your Canadian mortgage is more than 0.5% higher than the current 5-year fixed rate offered by your local mortgage broker, then it’s time to consider refinancing.
Some people choose not to refinance due to the penalty and lawyers fee associated with exiting their current mortgage. But while there are upfront costs associated with refinancing, in some cases these expenses can be offset in as little as 18 months through reduced monthly payments.
And in light of the long-term savings that accumulate over the entire life of your mortgage, refinancing can prove to be a financial decision you’ll thank yourself for again and again.
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