We understand that a mortgage is a very important and sensitive thing because it is about your most valuable asset – your home. We also know that your mortgage directly affects your finances, hence, it is quite sensitive.
Our goal is to help you understand mortgages better so that you can make the best decisions that benefit you.
We have gathered some of the most frequently asked questions about mortgages to guide you in your mortgage strategy.
Why do I need a mortgage broker?
You are not required to use a mortgage broker by law but doing so will benefit you tremendously. Whether you are taking out a new mortgage, renewing, or refinancing, a mortgage broker can help you find the best mortgage deal so you save on time and money.
Can I refinance a mortgage if I have bad credit?
If your finances have become problematic and resulted in bad credit, you can still refinance your mortgage as long as you have built up equity.
The interest rate may be higher than the average rates in the market but they can be renegotiated when your credit has improved over time.
How can I get the best mortgage rate when I renew my mortgage?
If you renew with your current lender, you may not get a lower rate unless you renegotiate. However, this can be fruitless unless you can prove to your lender that you have received better offers from other lenders. One way to get a better mortgage rate at renewal is if you switch to a different lender. This is why it is highly advisable to shop around before you sign a renewal and work with a mortgage broker to find a better mortgage deal.
How can I get a lower mortgage rate with a mortgage broker?
A broker can find a lower mortgage rate for you because he has access to multiple lenders. If you speak to your lender or approach a bank directly, they will not be inclined to negotiate your rate even if you have been a loyal customer. In contrast, brokers give a lot of business to lenders and will be in a better position to negotiate on your behalf.
Are lower mortgage rates always better?
A mortgage product with the lowest rate is not always the best one. It is important for you to read and understand the fine print. For instance, you need to check the penalties for making a prepayment in case you sell your house before the end of your term.
When comparing mortgages, check the option for you to make advance payments if your finances improve so you can save on interest rates. Good mortgage brokers can give you great advice about the terms of a mortgage to protect your best interests.
Who pays the services of a mortgage broker?
The good news is that you don’t pay a mortgage broker any fees. If you get a mortgage through a broker, he is compensated through a commission from the lender. He gets paid whoever your lender is so he is not loyal to any particular lender.
How long before my mortgage term ends do I need to renew my mortgage?
Generally, your lender will send you the renewal notice a few weeks before the end of the term. But you don’t need to wait until the end to renew. You can simply sign the renewal notice and mail it back. But again, our advice is for you to shop around first for a better mortgage deal before you renew with your current lender.
Is a home equity line of credit also a mortgage?
A home equity line of credit is not the same as a mortgage. It is a line of credit that allows you to borrow funds as you need them and pay back so you can use the funds again. It is secured by your home and you can borrow as much as 65% of its appraised value.
How do I find a good mortgage broker?
This is easy – just fill out a short online form on this page to connect with top mortgage brokers in your area, free of charge. Our partner brokers will be happy to assist you with obtaining a mortgage pre-approval, refinancing, or to switch to a new lender.
Is it better to choose a fixed rate or a variable rate?
A fixed-rate means your pre-determined interest rate remains the same regardless of market conditions. A variable-rate can change when the lender feels your situation has changed or if the market changes.
If you want stable payments and can’t take any risks, a fixed rate may be the ideal option for you. If your finances can withstand any interest fluctuations and you want to benefit from lower interest rates in the future, you can consider a variable rate. A mortgage broker can help determine which one is better suited in your situation.
Can I negotiate my interest rate with my current lender?
It is always possible to try to negotiate your interest rate with your lender during renewal but of course, your lender may not always agree to lower it without compelling reasons. One strategy is to try to get a better offer from another lender and use the offer to sway your lender. If it doesn’t work, you can always switch to a new lender.