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How to Get the Best Mortgage Rate

9901694_s.jpgBuying a home is a dream come true, and Durham Region has many spectacular homes to choose from. For those who have been working hard to save up, it can be a tough awakening when a mortgage rate is offered to you that makes that dream home slip out of sight. If you are considering shopping for a home, consider these tips that will help you understand how to get the best mortgage rate.

Shop Mortgage Brokers

Many people are afraid of the costs associated with using a broker; however the cost is typically offset by the savings these trained professionals can offer. Often the fee is actually paid by the lender when a successful agreement is put into place. As such, these brokers generally have nothing but the best interest of the buyer at heart. Their job is to shop the financial markets and use their relationships and negotiation skills to produce the most optimal rate for you, the home buyer.

Save Up for a Larger Down Payment

When it comes down to it, you'll learn how to get the best mortgage rate when you have more money to offer for a down payment. If you're able to put 20% down, your loan decreases dramatically, meaning the banks are likely more willing to give you a lower rate because you're more capable of paying a smaller principle.

Change Your Term

A twenty-five year mortgage will often have a considerably different rate than a ten-year mortgage. If you're willing to consider the possibilities of changing your term, you might open yourself up to enormous possibilities when you're trying to figure out how to get the best mortgage rate. Typically the longer your mortgage term is, the higher the interest rate is. Though long mortgage terms mean that you can know with certainty what your payments will be throughout the duration of the term, they also mean you will pay more for that comfort.

Fixed vs Variable Rates

When considering mortgages, one of the most important choices is whether a fixed rate or variable rate mortgage is the best choice for you. Traditionally Canadian homeowners prefer fixed rate mortgages as they offer loan recipients a long term, stable payment option. This makes it easier to budget expenses, and plan for future expenses. Variable rates however have recently become more popular than before due to the Bank of Canada’s low interest rates. Variable rates depend on what the mortgage lender’s prime rate is, with some lending institutions adding an extra 1% for variable mortgages that are open.

Choosing between fixed and variable mortgage rates will come down to your financial comfort, and willingness for your mortgage to vary month to month. If you want the comfort of knowing your mortgage rate is the same every month, a fixed rate will be your best mortgage rate. However, if you can afford to take the risk on a variable mortgage rates, they have been shown to be more cost effective during this long term of lower interest rates.

When looking for the best mortgage rate, consider what is best for you. If you can take the time to save up for a larger down payment, this will positively affect your mortgage and its payment. Consider your ammonization period and how long you want your term to be, as the longer it lasts the more money you invest into paying interest. Finally, weigh the pros and cons of a fixed or variable mortgage, as this can be the difference for a significant amount of interest fees. To learn more about how to find the best mortgage rates, and to find your next home, contact us at Mary Roy and Team today!

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Buyer ServicesBUYER SERVICES

Have you ever spent countless hours search through the MLS system seeing the same homes over and over again looking for the perfect home, hoping to find something new?   Then, when you do find what could be your dream home, you call the listing agent only to find out it has already sold?

Seller ServicesSELLER SERVICES

Mary Roy & Team have been selling homes in the Durham Region since 1987!  Ranked in the top 1% of Realtors across the GTA and Durham Region, we know what it takes to get homes sold fast, and for the most money.We provide each of our clients with a comprehensive plan of action outlining exactly what will be done to get their home SOLD and for the MOST MONEY! We will provide you with up-to-date information on your marketplace, as well as the price and details of competing properties.