If picking a mortgage sounds like a great big headache to you, you’re not alone. However, shopping for financing for a home is often complicated and frustrating simply because it’s difficult to know where to start. Want to know how you can pick the right mortgage for you? Here’s how.
Let the mortgage pick you.
Finding a mortgage isn’t a passive process at all, but there are steps you can take to make sure that you attract the right kind of offer. Before you even consider buying a home, make sure to clean up your credit report so that you can get the best mortgage rates in Canada. You should also pay down as much of your credit card debt as possible because lenders usually offer better interest rates to buyers with a low debt to credit ratio. Outside of the credit realm, try to save up enough money to make more than the minimum down payment so that you can shorten the term of your mortgage and avoid paying more interest than you have to.
Find a great mortgage lender.
Your mortgage contract is only as good as the professional who draws it up, so make sure that you are working with a lender that you trust. While there is no set time frame for the appropriate amount of experience that your lender should have, choosing someone who has at least five years in the business is a good rule of thumb. It also helps to ask family and friends for recommendations; lenders who earn more business through word of mouth are usually trustworthy and pleasant to work with, which will make a major difference when it comes to financing the home of your dreams.
Explore the options.
Choosing a mortgage shouldn’t be a cut and dry process; there should be some sweat equity thrown into the negotiations to make sure you’re getting the best deal possible. When your lender makes an offer, don’t be afraid to ask him or her to expand upon some details, reduce the fees, or transfer the responsibility of some of the administration costs to the seller. Walk into your meeting armed with the best information so that you know when to make these calls by researching Canada mortgage rates with Ratesupermarket.
Come up with a payment plan.
When it comes to mortgage payments, would it suit you to make bi-monthly payments instead of once a month? Or would you be able to shorten the term of your mortgage contract by making bigger payments? Do you have enough room in your budget to make one additional payment a year? All of these provisions can help you pay off your house faster, but they also require financial planning as you are working your way through the terms of your mortgage. Avoiding additional interest payments is nice and some of these decisions can have a big impact on the terms of your housing loan, but remember not to take on too much financial responsibility at a time or you could undo all of your careful planning by falling behind.