With the Holiday season and New Year right around the corner,, I’d like to share our top 3 mortgage financing tips for 2012.
Mortgage financing tip number 1 – Your bank is not the only game in town.
Many individuals are misguided and think that the bank is the only place to obtain a low interest mortgage. Some think that when their bank declines them for mortgage financing, that it is a sign that they have credit problems. More times than not the bank simply has very conservative lending practices and if you fall an inch outside of their guidelines, you may be declined.
Mortgage financing tip number one is to develop a relationship with a good local Mortgage Broker who can access other funding sources like trust companies, credit unions and mortgage investment corporations. The institutions often offer mortgage interest rates that are comparable to the bank’s mortgage interest rates and won’t make you jump through hoops to get a low interest mortgage approval.
Mortgage financing tip number 2 – If you are using your new mortgage to pay off debt, pay attention to your mortgage amortization. Many people who refinance their home to consolidate debt, make the mistake of extending their mortgage amortization back out over 25 to 30 years. Sometimes a mortgage broker or bank will re-arrange your mortgage this way, assuming that’s what you want.
Ask lots of questions. A mortgage amortized over 20 years will not bear that much greater of a payment than a mortgage financed over 25 years. When you look at all the money you will save on monthly payments as a result of consolidating your debt, there may even be enough savings to reduce the amortization that is left on your mortgage which will see you get your home paid off much faster.
Mortgage financing tip number 3 – Variable rate mortgages are still a favourable choice when obtaining mortgage financing. Mortgage interest rates in Canada are still at historic lows. Ride the low interest mortgage rate wave while you can. Some folks fear variable rate mortgages because they know that if interest rates increase, so will their mortgage rates. Many lenders who offer variable rate mortgages offer an option to lock-in. This means that if mortgage interest rates go up, you can lock into a fixed rate mortgage at any time.
If you are thinking about refinancing your mortgage, the end of the year is a better time than ever to do it. People who list their homes over the holiday season will often list for less because so many folks are pre-occupied with the holiday season so there is less demand. This is a perfect opportunity to get a great deal on a home. If you were thinking of securing mortgage financing to consolidate your debt, you are in a position to start the New Year with a single low monthly payment.
We at the mortgage centre mississauga wish your family all of the best in the upcoming holiday season and the New Year and hope that you have found these top 3 mortgage financing tips useful.