Getting the Best Mortgage Rates
You're probably not
too excited about the prospect of
doing some legwork on the topic
of mortgages, so LoanBanx is here
to help, since not only do you get
valuable educational information,
but we also offer the option for
you to have lenders compete for
your business. What you should still do, however,
is educate yourself on the basics,
which could be worth thousands of
dollars of savings in the long run.
Hmmm, suddenly the idea of doing
a little homework doesn't
seem so bad, does it?
A lot has changed in the mortgage world over the past few years. Here
are some things to keep in mind:
There is greater choice in lenders.
Consumers need not restrict themselves
when shopping for a mortgage. Lenders
that have entered the Canadian market
over the past few years include
companies like ING Direct, PC Financial,
CitiFinancial, HSBC, Citizens Bank, MCAP, and Maple
Trust, to name just a few. Include
the big banks, mortgage brokers,
even private lenders into the mix
and you have a lot of choice.
Everyone offers something different.
One lender may offer a great variable
rate mortgage as their hallmark
product. Another could have an unbeatable
one year rate. Still another could
have be offering a terrific five
year rate. This is why shopping
around becomes so important.
You don't always get the best rate
up front.
Frustratingly, when it comes to
lenders and mortgage rates, there's
the "posted" rate (like
the "sticker" price
of a new car) and there is the best
rate, which can be significantly
lower. You basically have to try
to negotiate your way down to find
the best rate. Some lenders claim
to tell you their best rate up front,
but this may or may not be true.
Be prepared to negotiate.
Increased marketing = increased
confusion.
There is a LOT of information out
there. Every lender offers a different
type of variable rate mortgage,
and every lender will try to convince
you that they offer the best package.
For the average consumer, it can
get pretty confusing pretty quickly.
The best advice is to learn as much
as you can (and this site will help)
as well as be assertive in asking
questions and reading all of the
fine print.
How to shop around
A good rule of thumb too is to start
with your own bank as a benchmark:
find out what they can offer you,
get it in writing, and then shop
around. When shopping around, start
by simply making some phone calls
and get some rough quotes over the
phone rather than giving full applications
everywhere. Bear in mind too that
you can talk to two different people
at the same lender and get two entirely
different answers to the same question.
A mortgage broker can also be consulted.
If you find a rate that is better
than what your own bank offered,
stick with them. If your bank turns
around and offers to match the rate
you got elsewhere, ask yourself
why they wasted your time by not
giving you their best rate in the
first place! Use your own best judgment
in dealing with this situation.
You may also want to check out the
article Factors Affecting Mortgage
Rates for more information on how
rates are determined in general.
The bottom line is, taking the time
to do your homework and shopping
around will get you the best rate
and the best mortgage to suit your
needs.
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