As mortgage rates remain at record-breaking lows, many Canadians are thinking about entering into the market to purchase a new home or refinance their existing mortgage. If you are like other future or existing homeowners, then one of the first questions you might ask your mortgage broker could be, “what is the best available rate?”
While finding a great competitive rate is a significant part of finding the right mortgage, there are many other factors you need to think about when you shop around for a mortgage. Some of these considerations are more important than trying to get the lowest possible rate.
What You Should Consider When Looking for the Best Mortgage Option
There are a few major factors that a borrower will need to think about when locking in their mortgage:
- Finding the right mortgage broker
- Any penalties, fees and conditions
- Getting the best mortgage rate
- And finding a desirable lender
Finding the Right Mortgage Broker
Getting a mortgage is a major financial decision that should not be taken lightly, so finding the right mortgage professional to handle your mortgage search should be the number one item on your list. Most borrowers feel like they are making a safer decision getting their mortgage with a big bank rather than getting a knowledgeable mortgage broker to help them. In truth, bigger banks go through huge volumes of mortgage clients, and they most likely won’t be able to provide you with a personalized approach that a mortgage broker will guarantee.
When you are looking to trust someone with your business, you want to make sure that they are devoted to giving you the customer experience you deserve and will answer your questions and concerns promptly and courteously. And you expect them to continue that support throughout your years working together. It is not well known that mortgage brokers will be able to get you approved with a bank at a comparable or even better rate.
Penalties, Fees and Conditions
Once you choose the right mortgage broker, it’s important to understand all of the terms and conditions in your mortgage and any potential fees and penalties involved with it. There are various fees, and the conditions of mortgage are both very important because they can directly impact your cost over time. There is a lot more to mortgages than just getting the lowest possible rate.
Another big factor that can have a huge impact on the cost of your mortgage are the penalties you might get if you choose to break a contract early. In Canada, nearly 70% of borrowers end up breaking their mortgage before the end of their term. Some lenders will offer you an extremely low rate with a very large mortgage repayment penalty fee. This means if you want to break your mortgage to refinance your mortgage to get a lower rate or to consolidate debt, you could be slapped with a much higher fee that could make refinancing your home nearly impossible.