Formula for a Perfect Mortgage – Choosing the Ones That You Can Chew

Formula for a Perfect Mortgage – Choosing the Ones That You Can Chew

If you want to move forward and lock in the best deal, it is basic that you adopt the right formula for finding the “perfect” mortgage. Here are the things that you must follow:

1. Anticipate future scenarios

You must go for the mortgage that matches your finances and lifestyle. for example, if you are about 25-30 years old, recently married and seriously planning to buy a “starter condo,” you can easily anticipate future events. You are likely going to have your first child within a associate of years. This method that you may have to move. If this becomes a reality, you are left with two options – move your mortgage or go for a break from your current mortgage and sell the starter condo.

If you find yourself in this kind of situation and you have a fixed rate mortgage with a 10-year payment term, this would translate to fees that may run to several thousands of dollars when you finally decide to sell your starter condo. Now, are you ready for this?

Other basic parameters that you must consider include stability of your current job and your saving and spending habits. for example, if you consider yourself a saver then you should opt for a mortgage that would have provisions for increases in the amount of monthly payments or regular mortgage payments on “lump sum.”

2. Look around for the best mortgage offers

In a recent study conducted by a group of specialized mortgage brokers, results showed that Canadians receive less than 2 mortgage quotes and only 3 out of 100 homeowners get quotes in excess of four. This only shows that homebuyers are not doing some serious “mortgage shopping” and tend to pick up the first mortgage proposal that they receive.

Are you aware that you can get a mortgage of $300,000 which, when amortized for a period of 25 years, would cost you as much as $200,000 in interest payments? A insignificant 1 percent cut in the rate of mortgage can translate to substantial savings in the long term. consequently, it is extremely important that you consider all possible choices before you make your final decision.

3. include the sets of an accredited mortgage broker

Believe it or not, getting the sets of an accredited mortgage broker does not truly translate to additional cost on your part. They are paid from the mortgage that they get for you. To prove this point, you can shop around for a mortgage on your own and get the mortgage with the lowest rate. Before you sign the agreement, try asking for the best offer of an accredited mortgage broker for the same kind of mortgage. You will definitely get a mortgage offer from the mortgage broker with a much lower rate.

4. Carefully study the fine print of the mortgage

You must be careful with the terms and provisions that may be hid in the fine print of the mortgage proposal. Be on the lookout for inessential fees and charges, additional costs levied on lump sum payments and move fees in the event that you decide to go for an upgrade. Take time to study the details of the contract and discuss and clarify issues and concerns with your bank.

5. Take into account related and minor point costs

Your bank typically earns more than $200,000 in the form of interest payments from an average mortgage of a homeowner. This is on top of the amount that they receive from the fees and charges that are applied on the mortgage. Before you sign on the dotted line, make you sure that you take into account all costs related to the mortgage that you are getting. These include the following:

• CMHC fees + interest
• Interest payments
• Set-up fees
• Monthly amortization payments

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