Mortgages: Don’t Learn the Hard Way

Real Estate Agent with RE/MAX Real Estate Kamloops

While learning from experience is great in most areas, it is not the best way to learn about mortgages.  In fact, learning from experience can cost you thousands of dollars and many headaches.  Before signing on that dotted line to purchase your new Kamloops home, be sure to do your research and understand exactly what you are signing.  According to a recent article by PJ Wade on Realty Times, here are five things to think about when determining which mortgage and which lender is right for you:

1.    Consider the source:  While the internet is a great research tool, it can be hard to differentiate between unbiased facts and marketing ploys.  According to a recent Mortgage Consumer Survey released by the Canada Mortgage and Housing Corporation (CMHC), the internet provided 86% of recent real estate buyers with on-line mortgage calculators and 54% with financial self-assessments.  Just remember, the internet is full of both legitimate and not-so legitimate companies peddling financial services.  Be very wary and protective of where and whom you provide personal information to.

2.    No one works for free:  Ever been referred to a mortgage company by your broker?  Often, lenders will pay referral fees for such referrals.  While professionals should disclose this arrangement to you, don’t feel ashamed to ask if there is a referral fee or incentive involved in the deal.  In addition, don’t be afraid to research additional companies before agreeing to use one.

3.    Learn the Total Cost:  Sometimes, a great interest rate comes with tradeoffs.  Be sure to clarify all of the costs associated with a new mortgage—is there a fee for early payoff of principal?  What if you change your payment plan?  What fees are there if you sell your Kamloops home?  Be sure to explore all of the possible financial situations before you sign for a mortgage.

4.    As Rates go Up, Mortgage Limits Go Down:  With interest rates on the rise, the amount you will qualify for may drop (more interest = higher monthly payment).  Prequalifying for a loan is a must.  Depending on how close you are to buying a home; look at a rate lock with your chosen lender.  Some will lock a rate (meaning it won’t be raised) as long as you close in 30, 60, or sometimes 90 days. 

5.    Price Match Guarantee:  Just as you would comparison shop for the best deal on a car, you should shop around for the best mortgage rate for you.  Using a mortgage broker can help you through the process of comparison-shopping, and can make the process flow smoothly.  Already have a preferred bank?  Don’t be afraid to negotiate and ask for a better rate.  Just like any other business, some will agree to match a deal offered by another just to keep your business.

Buying a new Kamloops home can be a dream come true.  The current real estate market offers many opportunities to buy a great home at a great price; and with a little work, you can find the perfect mortgage and make your dream home a reality.  When you are ready to sell your Kamloops home or relocate to the area, call me, Eric Putoto!   I am the ONLY Canadian Realtor to have been granted an exclusive license for the most advance home selling system ever developed: The “Maximum Value Home Selling Systems."TM

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Comments (2)

Yvonne Burdette-Van Camp
To Buy and Sell Real Estate, see me at Southwest Missouri Realty - Springfield, MO
"Home"work, I have the Answers!

No referrals in Missouri, I work with only lenders who are honest and forthcoming and get the deals once they say we can help.  

Aug 28, 2011 07:20 AM
Eric Putoto
RE/MAX Real Estate Kamloops - Kamloops, BC
Personal Real Estate Corporation

Good idea! Thanks for your comment.

Sep 04, 2011 01:16 PM