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How to Find the Top Mortgage Rates in Canada

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When you choose your next lender for your mortgage, there are plenty of topics you will want to be familiar with.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell told The Economic Club of New York in a speech being closely watched in what has become a volatile financial marketplace.
Finding a mortgage lender can be a daunting task, and serious considerations need to be made to end up with the right one. The number of people associated with mortgage lending is numerous out there. As a result, you need to be very cautious not to fall into the hands of fraudsters. Carrying out due diligence in advance is imperative before you go out shopping for a mortgage lender. The following are essential factors that any homeowner should consider when finding the best mortgage rates in Ontario, Canada.

Loan Type

The first thing a homeowner should do is take the time to understand the different loan choices available to them. You want to have an idea which loan favors you and which one would be unsuitable for your situation. This will assist you to land the ideal loan type for your mortgage. Whether you are looking at a thirty or fifteen-year fixed loan, adjustable-rate mortgage, or balloon type of loan, you have to get to the bottom of all the details. This will go a long way in ensuring that you make a choice that best suits you.

Loan Terms

You need to ask about the rates, points, and fees. Mortgage brokers link lenders with homeowners and get a profit from this kind of arrangement. The profit can be in the form of points, commission fees, or a percentage point of the mortgage rate. While it should be in the broker’s interest to provide the best rate possible, it still remains vital to ask about the fees and points. The loan term you get will ensure that the deal is best for you and not just for the broker.

how to determine which mortgage is right or you
Types of Mortgage LoansProsCons
ConventionalPossible to use for your first home or investment propertyPMI Required if less than 20% down
JumboBorrowers can borrow larger sums of money in expensive parts of townDown Payment of Between 10-20 percent needed
Government InsuredCredit Requirements not as strictHigher Overall Borrowing Costs
Fixed RatePayments never change over life of loanHigher Rates than an ARM
Adjustable RateLower cost for first few years Rates can increase making it harder for you to pay

Get more detailed information about loans below.


Loan options

There are different types of loan options offered everywhere by lenders. However, you need to find one that best suits your financial position. The most common option for home buyers is the Fixed-Rate Mortgage. In this case, the set interest rate and the duration of loan payment can’t go up. You get to choose a loan term, in most cases, 15, 20, or 30; the shorter the term, the lower the interest rates, though the payments are higher. The fixed rate is the safest option for buyers. You know what your payment will be each month, and it can neither increase or decrease.

Another option is the Adjustable Rate Mortgage

The rate of interest here is dependent on an economic index. What this means is that the interest on your mortgage payment can be adjusted within certain periods as spelled out in the mortgage as the index changes. This type of loan is far riskier. If interest rates spike, your mortgage can be affected Your monthly payment can increase substantially. This is the type of situation that can keep you up at night.
Finally, the other loan option is the interest-only payment, which enables a borrower to only remit the interest for a given period of time. After this, you pay a lump sum or start making remittances on the principal sum of the mortgage loan.

In order to choose the right loan type, you must assess the risks associated with each one and find that which best suits your budget.  For those of you not ready for an ARM mortgage, you might try renting an apartment. Our friends at Rentkidz can help you with that. 

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How to compare lenders

Comparing among lenders is crucial to find out which one works best for your situation. Are you looking for a small lender who will offer you personal customer service and even refer to you by your name? Or are you going for a bigger lender with the hopes of getting the proper interest rate type? Carrying out research on the available lenders, both small and large, will assist you to choose one that favors you.

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How to understand loan costs

To understand the cost of your loan, you need to inquire about the fees, terms, discount points, penalties, and any other costs associated with the mortgage deal. The life cycle of a mortgage is split into a number of mortgage terms. Normally, this could be a three, four, or five-year term. Lenders charge different fees for specific mortgages while discount points are disbursed upfront to bring the mortgage down. Each point is equivalent to a percentage of the principal, which is the whole amount owing. The cost of the mortgage could also include the appraisal fee and more.

Avoid getting ripped off in a mortgage. When in doubt do plenty of research and get multiple offers from lenders to protect yourself.

Here is what the Fed Chairman just stated this year.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell told The Economic Club of New York in a speech being closely watched in what has become a volatile financial marketplace.

Frequently Asked Questions

With interest rates going up, what will this mean for mortgage rates

Rates are extremely low and probably won’t be going up for some time. Now is a great time to get a mortgage.

Should i wait for mortgage rates or Lock them in right now

It really depends on when you are closing on your home. If you feel that rates are going to go up soon, then lock them in now. If you think that rates aren’t going to do much, then there probably isn’t any harm is just waiting. It’s a good idea to talk with 2 or 3 loan officers and start getting some quotes on different types of mortgages. Never feel rushed to purchase a home. Renting an apartment a little longer can never be a bad idea.

Additional Resources to Consider


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