Some Tips On Lowest Mortgage Rates Mississauga

I need the best mortgage rate, what rate do you offer?” 

While the client is always right, and we always provide the best rate and terms, we do convey the need to look at the fine print when selecting a mortgage.
Often there are mortgages out there offering lower rates, but are they necessarily less expensive?


First some facts:
  • The average mortgage in Canada lasts for just over 3 years
  • Over 75% of mortgages in Canada are locked in for 5 years or longer
  • Less than 50% of mortgages make it to renewal
What this means is the majority of people are paying a penalty of some kind on their mortgage for breaking or changing their mortgage prior to renewal.  You may think that these penalties are small, so it doesn’t really matter?  Well often these penalties are in the $5,000 to $10,000 range and higher.
The solution is simple in most cases, with some planning; many of these penalties can be avoided or at least reduced substantially.  This is where the mortgage professional comes in; by asking the right questions and knowing the different products available a mortgage professional can save you literally thousands of dollars.
The planning is always most beneficial when done up front rather than when you are negotiating a change or payout of your mortgage.  The lender has you at that point and is usually less likely to make concessions.  That being said better late than never, don’t put it off speak to your mortgage professional and create a short and long term plan.
You’re not completely convinced and still I want the best rate?  Let’s take a look at the numbers and then decide…
Often different lenders vary in rates by as much as a .25%.  This equates to a difference in your monthly payment of $36.37 or $2,182.20 over 5 years based on the typical 5-year $250,000 mortgage amortized over 25 years.  This seems like a lot of money, but when you consider penalties can vary by easily 3 or 4 times this amount, and that at least 50% of mortgages don’t make it to renewal, all of a sudden the rate is not as important as the fine print.

Comments

Post a Comment

Popular posts from this blog

Who enjoys the Lowest Mortgage Rates, High Ratio Borrowers or Conventional Borrowers?

Image
2017 sees a boom in real estate market. As the bank go lax on interest rates to promote spending, there’s never been a better time to step into your dream home. But one must know what they’re about to deal with before buying a mortgage for a property. Mortgage Division, a firm that provides the lowest mortgage rates in Mississauga , maintains transparency on how your down payment schedule ACTUALLY affects your savings and the mortgage rates you’ll actually be getting.           Now there’s been a lot of speculation regarding what’s better in terms of down payment. Is it good to pay a down payment that’s more than 20% of the purchase price of the property or to put than less than 20%? That’s the difference between high-ratio borrowers and conventional borrowers. High ratio borrowers are the ones who make a down payment of less than 20% and conventional borrowers are the ones who pay more than 20% as down payment. Now typically, it’s considered that high ratio
Read more

How Mortgage Brokers help you get the Lowest Mortgage Rates in Mississauga ?

Image
The last quarter of 2016 changed the whole residential mortgage business. The new mortgage rules announced by Canadian Department of Finance have put the borrowers in a fix. Change in lending and borrowing rules have complicated the residential mortgage scenario for homeowners. The new rules tend to stress test the borrowing capacity of a buyer. All this comes down to the down payment. Things seem smooth for conventional borrowers but high-ratio borrowers have an additional liability towards paying for lender insurance. The qualifying rate for insured high-ratio borrowers is as high as 4-5%. This has caused a big setback to homeowners’ buying power. Some borrowers who initially qualified for a mortgage, don’t even come close according to the new set of rules. Also, an increase in the low-ratio insurance premiums has complicated the situation a bit more. That means the mortgage rates go even higher. Collectively, borrowing power has fallen as few are able to qualify for
Read more

Refinancing the Home Mortgage Loans Mississauga

Image
 Pros and Cons of Refinancing the Home Mortgage Loans The concept of refinancing of mortgages is not a new trend; it has been there for quite a long time. Whenever there is a drop in the market and mortgage rates decrease to new levels, the lenders witness an influx of applications for adjusting the mortgage rates according to the latest one. Now what exactly is the process of refinancing the mortgages in Mississauga ? It can be  defined as availing the new, slashed mortgages rates to pay off the existing loans. Usually when the homeowner approaches the lender for new rates, it comes with new terms and conditions that usually beneficial for him.  In other words, it is the process of replacing the old interest rates and terms with the new ones that is highly beneficial for the borrower. It has been witnessed that for the past few years, the mortgage rates are quite down which is an open invitation to individuals who have taken the mortgage loans at least a decade back. Now th
Read more