It's easy to be consumed with just finding the best rate for your mortgage, but there are other things to consider that will save you money on a mortgage even if it isn't the best rate on the market.
1. Pre-Payment Privlages
If you want to put an type of agggressive amounts on your mortgage, this is something you'll want to make sure your broker is clarifying for you. Lenders range from 10%-20% for this term. This means you can pay between 10%-20% of your mortgage balance per year without there being a penalty fee. If you're looking to put big chunks of change or pay your mortgage off within the first fee years of obtaining it this is a big consideration.
2. Portability
Although, most mortgages are portable it is very important to check. Portability means your mortgage can move with you to another property when you move and usually it can be done when it's portable with a gap, where you would be able to purchase a home that is more expensive. If your mortgage lacks this feature you can be subject to some very substantial penatlities.
3. Penalties
Every company is different, even if they look the same. The industry norm is that you can pay the GREATER of three months interest or the interest rate differential. Every lender seems to have a little bit different way of calculating it.
4. Term
How long do you need your mortgage for? Do you plan on refinance to renovate or to buy investment properties? If you plan on changing you mortgage within three years, don't get a five year term, even if it is cheaper.
Dob't be lured in by advertising based on just the rate, get the whole story, and if it seems like your broker isn't giving you the best rate ask him to supply the reasons. It will give you piece of mind that you're not paying any more than you need to be.
As always, my advice and services are free and don't hestitate to call me.
Joel Olson
Pacific Mortgage
1.250.814.1627
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