With interest rates and the property market still fluctuating, and most mortgages continuing to rise it can be a tricky time for getting the rates that work for you. Adjustable deals are still a big risk, even in Canada where the recession is not as bad as some other parts of the world.
Just qualifying can be a daunting and tough ask, but getting the best deal is even harder. With the banks criteria for lending changing on a seemingly monthly basis, a deposit, solid income and clean history of credit is now what you need as a foundation where before it could pretty much sort your property purchase. So, what can you do to get the best mortgage rates?
- Forget the bank myth – Many people believe that the bank will offer them the best rate, but this isn’t particularly true. While there are good deals to be had by going direct, comparing the market online and packaging up a deal with the broker tend to be what works perfectly for many people. Speaking to a specialist tends to mean that you know what your limits are and how to go about getting the rate that works for you and/or your family.
- RRSP for down payment – When buying your first home, it is possible in Canada for people to use the Government’s Home Buyer’s Plan to qualify for a $20,000 withdrawal (without penalty) from a Registered Retirement Savings Plan to go towards your down payment. There are, of course, terms and conditions for this but it is a great way to pay for more of your property upfront.
- Long-term amortization – Under no circumstances consider this as a viable option for your mortgage rates. While it is true that it can lower your payments on a monthly basis, think of your long-term outgoings, the need to maybe remortgage more often and the increase in with mean to your rates of interest overall.
- Pick the terms not the rate – The interest rate that you see when considering a mortgage may well be attractive, but what are the terms that go with it? Are you paying it off for more years than you would be for a few dollars extra a month? Is it liable to change in the next couple of years? People have very different needs, so be sure that you know what you should be looking for and stick to your guns.
- Mortgage options – There are always going be add-ons and extras offered to you wherever you look. Don’t be taking in by things like cash back, a 10-year term or large prepayments because they can cause more damage in the long run.
So there you have it, five ideas for getting the best mortgage rates that you need. It’s all about knowing what you want, how much you can afford and where to look for a comparison so that you aren’t out of pocket over the long-term.
This content provided by Rate Supermarket.