Borrowing the first mortgage is not easy. There are so many things that you have to do right to ensure your home loan application is not rejected. Being a first time home buyer can be a disadvantage. However, you can easily overcome the obstacles if you have the mortgages checklist ready before approaching a lender.
Do Your Homework
In case you are borrowing a home loan for the first time, you should first take stock of your budget. How much can you borrow for a home? You must have a good understanding of all costs related to the homeownership. It will help you avoid borrowing beyond your limit.
If you are looking for refinancing, check your current mortgage lending documents. It may be lying at the bottom of your filing cabinet. Find it and read it carefully. Check what the term of the contract says. Identify the current lender. What is the interest rate your lender is charging you? What type of home loan did you borrow? How many months or years are left to repay your mortgages? What types of penalties are applicable to you if you break the agreement terms? You need all this information to determine your next steps.
Contact Your Current Lender or Find another Lender
Is your current lender offering a better rate to its new customers? You can request the same rate if you have always paid your mortgage repayments on time. The lender is sure to consider your request if you have been loyal to it.
Contact your lender’s customer service team and inform it you are looking for a better deal from other mortgage lending companies. Most lenders are eager to retain old customers. They are ready to offer attractive deals to loyal customers who have paid their loan repayments on time. Dealing with the same lender is in your interest because it helps you avoid extra paperwork. You receive many other benefits if you borrow from the same lender once again.
Contact Professional Mortgage Consultants
It is not easy to understand the advantages and disadvantages of each mortgage offer available in the loan market. Should you go for a variable or fixed rate? Which one is better – monthly or rapid bi-weekly repayment? You cannot find the right answers without consulting the mortgage professionals who have experience in this industry.
Contact a Community Lending Centre mortgage broker to receive guidance on these matters. You will learn which mortgage product is most suitable for your borrowing needs. The broker will evaluate your documents, your borrowing requirements, incomes, and other information to determine if you should refinance at the current rate. The broker will help you find the lowest mortgage rate.
Research by the Canadian Mortgage Professionals shows most Canadian mortgage borrowers received a lower interest rate when they borrowed their mortgage through a mortgage broker. Their interest rate was reduced up to 125 points while it was 114 points for people who borrowed it directly from a credit union or bank.
Locking at the Low Rate
Should you dump your existing lender and move to a new lender? What are the advantages and risks if you go ahead with this plan? It is better to get the approval and ask the lender to lock the loan rate. It solves the dangers of mortgage rate increases after you have left the current lender and started negotiating with a new lender. You can hold the pre-approved rate for 120 days without paying any charge.
This option works well when you are looking for a home but have not found it as yet. By locking the rate, you are under no pressure to buy the new home immediately.
The Importance of Renewal Date
Start looking for a new mortgage rate at least 120 days before the renewal due date of your existing mortgage. Research more information and find the best deal after comparing mortgages offered by different lenders. This way, you will have sufficient time to compare the rates, terms, and conditions of different lenders.