Calgary-mortgage-brokerWhether you are a first time home owner looking for a mortgage lender or are in the process of renewing your mortgage, it’s always good to shop around.
The CMHC (Canadian Mortgage and Housing Corporation) reports that 90% of people renew their mortgages with their existing lender. This statistic is pretty appalling as people can easily get a better rate than their current lender is offering by simply getting multiple quotes.
If you’ve considered dealing with a mortgage broker – you’re not alone. About one third of individuals go through a mortgage broker to help them find the best rate and mortgage for their financial reality. Since mortgage brokers deal with more lenders than the average consumer they can often help you save money by securing you a better rate than the banks.
It’s also a good idea to explore a variety of mortgage products and mortgage terms. For example, you might consider whether a ‘no-frills’ mortgage product might be right for your situation. Since numerous mortgages offer features that consumers do not even use (such as lump sum payments), a ‘no-frills’ mortgage offers buyers the opportunity to eliminate some of those features in exchange for a lower rate. However, make sure you understand exactly which features you are getting rid of and think about whether you may want those features in the near future. Sometimes ‘no-frills’ mortgages can carry unforeseen costs if you do not consider the long-term implications of getting rid of certain features.
Also, don’t let yourself get mixed up about which mortgage term to go for. Often buyers get tied up with the common dilemma of choosing between a short-term mortgage or a longer term mortgage. The difference between long and short term mortgages is that long term mortgages offer stability and allow people to budget more easily. Shorter terms offer considerably less stability (since rates continually fluctuate affecting the shorter term mortgage) however, they do offer lower monthly payments. However, you don’t have to choose between the two. Although, people tend to shy away from 3 and 4 year fixed term mortgages because they feel they don’t offer as much stability as a 5 year, statistics show you will save money with a shorter term. And with the 3.5% fixed rate on the 3 year you get the best of both terms.