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Mortgage 101

Posted on February 23, 2018 by Peter-John Woolf

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If you’re in the market to buy a new home, one of the first items on your “to-do” list is usually to obtain a mortgage. Often, people will approach their own banks to find out what kind of mortgage they can get. However, for a purchase this big, it’s helpful to know there are options out there, and options mean potentially saving big time on your mortgage. All you have to do is put in the leg work!

The key factor in the overall cost of your mortgage is your rate. Almost half of people fail to shop around for their best possible rate, which is a big mistake.

A high mortgage rate means that more of the funds you pay into your mortgage each month go toward paying off the interest, rather than the principle (actual cost of the house). This lengthens the time it takes to pay for your home or, importantly, to build equity. Logically then, a lower rate means you’ll spend less each month and pay less over the course of your mortgage.

While Canadians are subject to broadened mortgage ‘stress tests’ from conventional lenders now, private lenders can often secure mortgages with more favourable terms than larger banks. This gives home buyers the chance to qualify for more than they may realize, while keeping things affordable. Again, shopping around makes the big difference. This is where Broadview Homes comes in. As a reputable builder for many years, Broadview works with a group of preferred mortgage professionals who can work on your behalf to secure the most beneficial mortgage terms and rates available through their relationships with various financial institutions. This is especially beneficial for those who don’t feel comfortable negotiating a rate themselves or prefer not to shop around at various banks.

Pre-Approval

Once you’ve spoken with a broker your trust, you can avoid any surprises by getting pre-approved for the mortgage that works best for you. Doing this will ensure your rate will hold for up to 120 days, allowing you to shop for a home knowing how much you can afford. Keep in mind, however, that this pre-approval doesn’t prevent you from continuing to work with your mortgage broker to find the best mortgage terms out there.

Mortgages are often an intimidating prospect for new home buyers, but they don’t have to be! You can speak to any of our Area Sales Managers in-person to discuss your options; they will be happy to refer you to Broadview’s preferred lenders for expert advice.

Topics: broadview homes, mortgage & financial, buy a new home