Everybody wants to save money! Nobody wants to obtain a mortgage only to discover that your friend or neighbor has received a better rate and is on course to save thousands of dollars in interest over the term of their mortgage. To ensure that you receive the best home mortgage rates in Toronto there are some steps that you need to pursue.
Use a broker over a bank
Mortgage Brokers have access to every lender in the country. Banks have access to only their products and they are obligated to sell them to you, even if they are aware of a better rate or program at another lender. Brokers have no loyalty to banks, they work for their clients. A broker will have access to every rate, product and program your bank has.
Only pay for the frills you need
Rates increase on mortgages to compensate for extra features on a mortgage. These include, but are not limited to having a mortgage open or closed, bigger prepayment penalties, etc. This is another reason that banks charge more for mortgages than many other lenders, because they need to pay extra costs related to servicing a branch. When you are looking for the best home mortgage rates in Toronto its important to begin with the end in mind, and decide which feature will be cost-effective to your future plans.
Consider rate holds
Don’t be fooled into believing that pre-approvals provide you with a guaranteed mortgage, there are still many conditions to satisfy, and you will still need to place a financing condition on your contract when buying a house. However, a pre-approval does provide a rate hold that will guard you from potential rate hikes for ninety to one hundred and twenty days, each lender being different of course. The great thing about a rate hold is that not only are you guarded against rate hikes, but your rate can be floated down if the rates decrease. Many lenders offer “Quick-Close” specials as well that are much lower than their standard discounted mortgages, be sure to ask your broker if there are any specials available when you are ready to buy, as most of these specials can only be applied for if you are closing in thirty days.
Consider the future
If rates are expected to rise, many lenders will heavily discount their shorter term mortgages, so you will be forced to renew at a higher rate. Ask your broker what they expect the future mortgage rates to look like. A mortgage broker won’t be able to predict the future, but he can give you a pretty educated guess. If rates are expected to decline in the next year, consider a six month to one year mortgage. If rates are expected in increase in the future, try to lock into a term for as long as possible.
Markets change and the best home mortgage rates in Toronto will be different all the time. To get the most peace of mind that you are are paying the lowest of possible, be sure to follow the above steps, and you’ll find that every neighbor around you will be envious of your savings.
