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Shopping for the best rates? Here’s how to do it right!

General Mark Goode 14 Apr

RATE SHOPPING?

Here’s the inside scoop on how to do it right!

First:  Make sure you are working with an experienced professional mortgage broker and underwriter.  The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.  But how can you tell?

Here are four simple questions your lender absolutely must be able to answer correctly.  If they do not know the answers…RUN…DON’T WALK…to a lender that does!

 

  1. What are mortgage interest rates based on?

The only correct answer is the Bank of Canada rate for variable mortgages and mortgage backed securities, specialized mortgage bonds, or Government of Canada Long Bonds for fixed rates.  A professional mortgage originator ought to at least know the basics of how your interest rate is determined.  Do not work with a lender who has their eyes on the wrong indicators, or worse yet, has no idea what the indicators even are.  At Canada Mortgage Direct we constantly review these indicators and you can therefore be confident in our ability to suggest sound mortgage strategies up front and to manage your mortgage for the long term.

 

2.  How will rising interest rates in the coming years effect me if I take a fixed rate product?

Most lenders will mistakenly answer that if your rates are locked in then rising rates in the future will not affect you.  This is an incredibly dangerous thought process.  What will happen to your payments at renewal if rates rise from their current emergency low levels to a more normal level 2% or more higher then today? This is called your payment shock and it is incredibly risky to your long term financial health.  Working with a lender who pro-actively manages your mortgage and notifies you when rates rise with a suggestion on how to minimize payment shock is not only smart it saves you thousands of dollars.  Let me show you how.

 

3.  What strategy are you recommending and why?

The key here is the word “strategy”.  If a lender cannot clearly articulate the strategy behind their recommendations to you then they are simply quoting a rate, and quite frankly anyone can do that.  On your largest investment make sure you are dealing with someone who has a solid financial plan that is considering your overall financial wellness for you.

 

4.  What commitment are you giving me to personally manage my mortgage over the long term?

This is the most critical question of all.  Many lenders, especially bank personnel, have no desire or ability to proactively manage your mortgage over the long haul.  How can you take advantage of changing markets in the future if no one is watching them for you? Who will ensure you don’t miss an opportunity to renegotiate?  If you are considering a variable rate mortgage why would you do this with someone who is not committed to keeping an eye on it?  At Canada Mortgage Direct we truly believe our real job begins when your mortgage funds.  Anyone can sell you a mortgage but only truly committed mortgage professionals can manage that mortgage over the long term.  With this long term management approach we can significantly reduce your total cost of home ownership, isn’t that the point?

 

BE SMART…ASK QUESTIONS…GET ANSWERS!

 

More than likely this is one of the largest and most important financial transactions you will ever make.  You might do this only four or five times in your life…but we do this every single day, and have been doing it for 18 years!  It is your home, and your future.  It’s our profession and our passion.  We’re ready to work for your best interest!

 
Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca  | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 | 
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Corin Payie  MMDLC 

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