Before you make any decisions about a mortgage, you should meet with your mortgage broker to ascertain whether you’re in a financial position to make a purchase, and if so, what you can realistically afford. Once this has been established, your broker will get you a ‘rate hold’ which protects you from any fluctuations in the market. Then, you can talk the following points over with your broker, to ensure that not only do you understand the mortgage buying process, but that you get the best deal available to you:
- For pre-approvals, what’s the rate drop policy?
Many lenders will pre-approve you at a set rate for a period of 120 days, and if rates drop within that timeframe and you choose to close on your mortgage, you should find that you qualify for the lower rate. Note that rates will vary from lender to lender.
- What can have an impact upon my mortgage approval?
It’s not until you have a home in mind, that you’ll find out if you have been approved for a mortgage, as your lender will need to be aware of the overall cost of your home, from property taxes, maintenance fees and the actual price. If any changes occur to your circumstances, such as employment status or credit score, for example, these can also affect your chances of approval.
- What happens when my mortgage is due for renewal?
When you work with a mortgage broker, they will inform you of the fact that your mortgage is due for renewal well in advance and will always make you aware of the best rates and products available to you.
- Is your mortgage portable?
Portable mortgages can be taken along with your existing interest rate, to your new home, should you plan to move before the term of your mortgage is up. You usually won’t incur any fees but should check with your broker.
- What you need to know about variable rate products:
You may choose to lock in your variable rate mortgage if you see that your chosen lenders rates are beginning to increase, but your rate will not be frozen at its current state; instead, you’ll be moved to the current fixed rate. To be certain that when you lock in a rate, it’s the discounted one, work closely with your broker and listen carefully to their advice.
While there is a lot to think about when it comes to mortgages, if you work with a broker whom you trust and whom you know has the relevant knowledge and experience to help you get the best rates for your circumstances, then the whole process needn’t be overly stressful or complicated.