When it comes to finding the mortgage that suits you, it’s important to understand a few things so that you pick the right one. A worry can be whether you’re going to get accepted in the first place, but once you know you are then there are many things to consider.
A building society or a bank may have various options for you to take a look through, but your needs might be better suited combined with a different part of the market. Remember, if you’re a growing family then you will have different needs to a retired couple. With a mini boom seen across the country’s real estate, it’s time to take a look for the best mortgage rates in Canada so that you can be part of the rising.
What mortgage suits me?
The most appropriate starting is, rather unsurprisingly, which type of mortgage is out there for me to choose? Basically, there are two main offerings for you to take a look at, and these are:
• Adjustable-rate – What this means is that the repayments you owe reflect the market conditions and can change on a month by month basis. This often comes without the need for an arrangement fee and represents the cheapest rates when you search. Easily the most common mortgage, and it has been known to save homeowners vast amounts compared to fixed-rate mortgages – if interest rates don’t unexpectedly spike! If the economy does change and repayments do rise, then you could be in trouble. Often there is a rate cap, but that will still be more than the other mortgage type. It’s a risk, but can be substantially cheaper.
• Fixed-rate – What happens here is that you get the security of knowing exactly how much you will be paying each and every month. As such, there is a fixed interest rate and your financial planning over the longer term can be more effective. Two problems with this are paying the arrangement fees up front, and also the fact that if interest sinks then you are paying more than the variable mortgage. Known as the safe option, they are popular but what you need to understand is the market so that you know how interest rates have been looking over the past year or so.
Using a mortgage broker
Moving house is considered just as stressful as divorce, and ensuring that it runs smoothly can be a tough ask. Knowing what you need is important, and that’s why mortgage brokers can be important people in securing you the best deal for your needs. Banks will argue that you would be better placed going direct, but many think a broker helps in the process. With the market becoming more and more competitive on a daily basis, it can be hard to know where to look for your top deals. With your time and effort being taken into picking the right home while having enough hours for your busy weeks, it can be more efficient to use a broker. What is more is that getting the best deal can offset any price paid to the advisor.
Saving money on your mortgage
There are always people and so-called experts claiming that you can save money in any walk of life, and often this isn’t true. But, there are always some ways by which you can lower your outgoings if you do a bit of research. The 6% solution, for example, is something that people use whereby you give the seller 6% extra but he gives you that straight back. What this means is that you pay a little more upfront for the house but you need a smaller loan, which over time can save you thousands.
Additionally, you could assume the mortgage that the house currently has. If the mortgage was taken out years ago with a lower interest rate then you can take this over – so long as you can cover the purchase price and outstanding debt difference. This along with playing hardball with mortgage lenders tends to lead to the best results and is another reason why choosing your mortgage is of paramount importance.
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