Getting the best mortgage rate is not an easy process to go through. However, we have some tips you can take to ensure that you are getting the best possible mortgage rate.
Below are 4 tips to get the best mortgage rates:
Start Preparing Early
If you’re looking for a home right now, getting your finances in great shape may be tough. On the other hand, if you’re just thinking ahead, read closely.
Arguably the most important use of your credit score is for your mortgage. Before you’re even considered for a mortgage, conventional lenders will look for a credit score of at least 700. FHA loans come with more relaxed standards but in general, you need outstanding credit.
If you do qualify, a 20-point difference in your score could move your rate up or down more than 0.5% – nearly $12,000 in our example above.
Second, save up! The more you can put down, the lower your mortgage payment and the less interest you’ll pay over time. A higher down payment could even mean a lower interest rate. Coming up with a 30% down payment could drop your rate more than 0.5%. Source: http://www.investopedia.com/articles/personal-finance/010915/how-get-best-mortgage-rates.asp
Get All the Information Upfront
If you’re dealing with a broker, ask if there are any broker or commitment fees. Make sure the lender or broker does not conduct a credit check until you have decided which institution you’re using. Every time a credit check is performed, it can decrease your credit score. Also, ensure that you are dealing with a large reputable company. Source: http://www.whichmortgage.ca/article/top-tips-for-getting-the-best-mortgage-rate-118339.aspx
Don’t Be Awed Into Submission by Special Deals
Don’t be awed into submission by special deals, because they’re not the last word on pricing. If you have a good relationship with your bank, don’t hesitate to ask for a little extra discounting. You’ll have more leverage if you’re seeking a long-term mortgage of five years or more, and if the closing date for your home purchase is near at hand. With today’s interest rate volatility, banks may be less willing to commit to a super-low rate on a mortgage they won’t actually fund for a couple of months. Source: http://www.canadianliving.com/life/money/get_a_better_mortgage_2.php
Use a Broker
The report states that brokers lower the “search costs” of getting multiple quotes. Multiple quotes (lower search costs) are strongly correlated with lower rates.
“Over the full sample the average impact of a mortgage broker is to reduce rates by 17.5 basis points.” That’s ~$1,670 of interest savings on a typical $200,000 mortgage over five years.
Bank “mortgage specialists offer convenience to consumers, although they do not reduce search costs. This is because they work for one lender only.” Source: http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/02/getting-the-best-mortgage-rate.html
If you want to learn more about mortgage rates, please give us a call or contact us here.
Gary Wong, MBA
2105 West 38th Avenue,
Office Phone: 604-263-1911