Business & Finance mortgage

Why The Lowest Mortgage Rate Is Not Always The Best Rate For You

Many times I am contacted by mortgage clients asking about what my best mortgage rate is. It is common to believe that everything is an apples vs. Apples comparison with regards to mortgage rates, and that the lowest rate is always the best deal. However, this is often not the case.

Borrowers often overlook the terms of the mortgage, or do not receive disclosure of items that are not attractive to an offer (particularly from Canadian banks). Below are some of the situations where taking the lowest rate will often cost you money in the long run:

-Many times the bank will not even approve you for the amount you need to buy the home you want. However, there are other A mortgage lenders out there who will approve you and also give excellent rates.

-I have also had clients who were with a bank who required that the money was taken from an account at their institution, which is not where they banked, and they found it very inconvenient to have to transfer money every month.

-Your mortgage lender may offer you a low rate to get into the door, and then when it comes time to renew your mortgage provide you an offer that is significantly higher than the market is offering. At that time it may be difficult for you to get an approval elsewhere and you could be stuck with their offer.

-If you get a variable mortgage with the intention to lock in to a fixed mortgage rate at a later date, many bank lenders will only give you posted rates when you lock in, meaning your interest rate will be much higher.

-Do you want mortgage life insurance coverage to protect yourself in case of death or disability? Many lenders including all the banks offer coverage that is strictly tied to their institution, so if you become sick during that coverage and try to move your mortgage, they will discontinue coverage and you will be paying much higher premiums to be re-insured elsewhere.

-Home Equity Line of Credit (HELOC) mortgages are often reported on the credit bureau, particularly with the banks and credit unions. It is generally much more favourable to have a HELOC mortgage that is not reporting on your credit bureau, as it is more favourable for your credit score. This could save you money and allow you to borrow money easier in the future.

-Sometimes a lender has a product that works with a strategy that is of benefit to you but may not offer the very lowest rate to get those benefits. An example of this would be the TDMP mortgages, which is a structure to make your mortgage tax deductible in Canada, and can help to create a great deal more wealth than a lower rate may offer.

Save Money on your Mortgage, Not Just on Your Mortgage Rate

These are just a few examples of things that could cost you much more money than saving .1% on your rate will give you. Keep this in mind next time you meet with your banker about your mortgage and often it is best to seek a second opinion from a mortgage broker who can give you helpful advice.
SHARE
RELATED POSTS on "Business & Finance"
Suze Orman Should You Pay Down Your Mortgage
Suze Orman Should You Pay Down Your Mortgage
Does Your Credit Score Qualify For Mortgage?
Does Your Credit Score Qualify For Mortgage?
How to Get Best Easy Loans Mortgage of Refinance for Home Loan
How to Get Best Easy Loans Mortgage of Refinance for Home Loan
What's the Right Mortgage For You?
What's the Right Mortgage For You?
Looking at How a VA Loan Works
Looking at How a VA Loan Works
Buying Your First Home – Top Tips
Buying Your First Home – Top Tips
Foreclosure Rights of Your Mortgage Company
Foreclosure Rights of Your Mortgage Company
Going Down the Boozer with the Boss Drinking for Success
Going Down the Boozer with the Boss Drinking for Success
How To Choose The Right Mortgage Broker Wisconsin?
How To Choose The Right Mortgage Broker Wisconsin?
What Does it Mean to Refinance Your Mortgage?
What Does it Mean to Refinance Your Mortgage?
The Right to Rescind Your Mortgage - a Powerful Tool for Negotiating a Loan Modification
The Right to Rescind Your Mortgage - a Powerful Tool for Negotiating a Loan Modification
Sub Prime Mortgage Cheat Sheet
Sub Prime Mortgage Cheat Sheet
Brandon Colker Is An Expert Mortgage Adviser
Brandon Colker Is An Expert Mortgage Adviser
How to Find Out Who Holds the Mortgage on a House
How to Find Out Who Holds the Mortgage on a House
Bad Credit Mortgages - They are not hard to get from the lenders
Bad Credit Mortgages - They are not hard to get from the lenders
Reverse Mortgage Tips 2009
Reverse Mortgage Tips 2009
Are Mortgage Rates Today Influencing Your Decision To Buy?
Are Mortgage Rates Today Influencing Your Decision To Buy?
Big Challenges Ahead For Mortgage Lead Generation
Big Challenges Ahead For Mortgage Lead Generation
Large Mortgage Choice Greater Than Ever
Large Mortgage Choice Greater Than Ever
Helpful Insurance Advice for First-time Motorcyclists
Helpful Insurance Advice for First-time Motorcyclists

Leave Your Reply

*