A mortgage is the sum of many parts and considering only the best rate can cost you money!
While the interest rate will make a difference on your total mortgage cost, there is much more to a mortgage than just rate. Other factors that will affect your total mortgage cost include: the mortgage's general terms & conditions, mortgage term & amortization, fee schedules, pre-payment privileges, payment optimization, rate conversions, payout penalties, renewal offers, life insurance, renovation inclusions and more. There are also significant differences between lenders that can determine which mortgage option will suit you best. Al of the above can have a big impact on the total cost of your mortgage over its lifetime.
When choosing who you want to work with and what lenders to consider for your next mortgage, it is important you ask the right questions and feel comfortable with the answers you are getting. Here are some Top Questions to ask when shopping for a mortgage:
- How is my mortgage penalty calculated if I make changes before maturity?
- Posted rate to Discounted rate (Least favourable)
- Discounted rate to Discounted rate (Most favourable)
- If I choose a variable rate mortgage, is your penalty calculated at 3 months interest at the current contract rate, or is a different calculation used?
- If I choose a variable rate mortgage and decide later to convert it to a fixed rate mortgage, will I get the current discounted rate or the current posted rate?
- Do you register a standard charge mortgage (unrestricted free agent at maturity) or a collateral charge/multi-purpose mortgage (restricted at maturity)? Please explain the pros & cons of your option.
- Is the life insurance you offer mandatory?
- Is the life insurance portable if I decided to change lenders in the future?
- Do you offer renovations to be included in the purchase of a home? If yes, please explain how this works.
- How much would I save off the term of my mortgage by making accelerated payments vs regular payments?
- How many times per year can I make additional lump sum payments on my mortgage and what is the minimum required amount?
- Can I or my real estate agent reach you by telephone or email in off hours when my financing is being approved?
Ready to get started? Find a trusted and knowledgeable Manitoba Mortgage Broker at One Link Mortgage today! We are here to help.