There will be a time where you need a mortgage (unless your Bill Gates). Now, you have found the perfect dream house. It has everything you need in it, a pool, large kitchen, even that spacious 2-door garage you just HAVE to have. All you have to do is buy it! Easier said than done. However, your mortgage should be the least stressful part. Yeah I said it! A mortgage is easy to find when you have a mortgage broker. They are free to use, because they receive a commission from the lender. Their whole job evolves around you getting the best mortgage for your situation and saving you money (which can then be used to invest more into your business). Despite having a mortgage broker, it's a good idea to know what makes up a great mortgage. For this, Deb Murdoch, a mortgage lender with The Mortgage Group which was rated as one of the best in Saskatoon by Three Best Rated®, gives 3 insider tips on what to look for in a mortgage.
1. The Lender
If the lender isn't recommended by a reputable mortgage broker then you should run. Remember, a mortgage broker's job is to find a great mortgage from great people. If a lender isn't recommended, that is a huge red flag and an indicator that something isn't quite right. The reasons can range from poor products, bad services, are difficult to work with, and much more. It's better to be safe than sorry and just walk away from these lenders. However if they are recommended than that is great! Now ask yourself 'Why?' A mortgage broker can recommend a particular lender for a variety of reasons and circumstances, and they might not be a good fit for you. Deb recommends asking "Do they have good service? Are they accessible and how?" You can often answer these questions by looking through reviews, asking your friends who have used that lender, and consulting with your mortgage broker. Don't be shy and pick up the phone and call the lender. Prepare a list of questions pertaining to their services and accessibility, and interview them. Of course, services and accessibility mean nothing if the lender does not have the type of mortgage you want.
2. The Product
You found your perfect lender. You think you could even become BFFs. Okay, maybe not that far. Regardless it's time to look at the actual product, the mortgage. "You should evaluate for pre-payment privileges, portability, and payout penalty calculation[s]," Deb states. Let's say that scam email from a Nigerian prince actually was real (disclaimer: don't answer spam mail. It's a bad idea) and now you're sitting on a lot of money. 'HA!' you think 'Those IT people were wrong all along! Time to pay off my mortgage.' If your mortgage includes pre-payment privileges you can, all without those pesky fees! If it doesn't or has terrible pre-payment privileges you could end up paying a lot more than you expected to. Next, as you know mortgages last a long time. During this time, you might want to move. If your mortgage has great portability, you can transfer that mortgage from your old house to your new house. This allows you to not be tied down to on particular location for the next three decades. Finally, you bought a house and have been paying it off for some time now. You look at your credit score and think 'Wow! My score is great! I'm amazing!' and decide to refinance your home. If you weren't paying attention to your payout penalty terms, this can cost you quite a lot! Remember, every cent you spend on fees that could've been avoided in the first place is a cent you could've invested in your business, your future, or your children's future.
3. The Rate
If you are like almost everyone, you probably think the rate is THE end all, be all. "Rate is not everything," Deb says, "The best rate does not always mean it is the best product." Remember all those fancy things we went over in 'The Product' section? Well, usually the best rate is missing those, or has some strange requirements. This is where a mortgage broker can really help. They are trained to go over all of that and will help you spot those caveats. If you do decide to go the mortgage journey alone, it is recommended you have a lawyer read through the contract and explain it to you. After all, you don't want to get caught in a sticky situation, because you misunderstood the mortgage. People dedicate That being said, your rate is still important. "It does not have to be the best rate, but it should be in the top three," Deb states. A small difference in rate (.05%-.1 %) will not have a large effect when it comes to the monthly payments and the total balance. A minuscule difference in rate should not be your deciding factor. Deb says, "Priority should be given to the lender and the product, and then the rate."
Mortgages can be really tricky if you don't prepare yourself beforehand. With the right preparation and the right mortgage broker they can be a breeze! Before you run out and find the first mortgage broker you can, take a moment to sit down and decide what you want from your mortgage, where you expect to see yourself in the next several years to come, and what you want your monthly payments to be. The more information you have before looking for the mortgage means the happier you will be with the mortgage you get!
