Tuesday, April 14, 2009

Four Points to Ponder

Here is a video on BNN featuring Rob McLister from Canadian Mortgage Trends (he's a mortgage broker in Ontario).

He has some interesting points regarding shopping for your mortgage:

1. Only give your bank/broker one shot to give you their lowest rate. As their loyal customer, shouldn't you expect that your bank would give you their best rate upfront? If they don't, why stay with them? According to Greg MacPherson, banks have "invited this haggling by only revealing the lowest mortgage rate they will give you when you absolutely force them to by coming up with a better competing rate from across the street."
If a mortgage broker gives you their best rate upfront with no haggling, why not give them your business? I disagree with taking a mortgage broker’s great rate and then running back to your bank and asking them to match it. Why would you reward the bank for not offering their best rate upfront?

2. Find a broker that works with all lenders. Mortgage brokers do not deal with RBC or BMO but most of the time we can get you a deal that's as good, if not better.

3. Ask about "No Frills" or "Quick Close" mortgages. No frills products will give you a lower rate but will limit the amount you can pay back every year. If you don't think you'll be making any extra payments on your mortgage, this may be a good option. Another great (and increasingly popular) product offered by lenders is the 30 day "quick close special". Many lenders will give you a lower rate on a five year fixed term if your mortgage closes within 30 days of your mortgage application.

4. Don't try to time interest rates (no one has a crystal ball).

Watch the video HERE.

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