Getting the best mortgage rate when buying in Scarborough
Do your homework and shop around for the most competitive rate. There are two things you must do to find the best mortgage rate: you must educate yourself about mortgages and you must shop around for the most competitive rate. This sounds easy enough but in practice it takes a lot of time and effort! Most people only think about their mortgage once every five years. These days, the marketplace for mortgages is changing on a monthly basis so the average consumer has a lot of work to do to get up to speed on what is available in the marketplace. There are no longer just the big banks to consider. There are several new mortgage lenders that have entered the Canadian market over the last decade, including ING Direct, PC Financial, MCAP, Maple Trust, Citizens Bank, HSBC, etc. At any given time there are at least a dozen financial institutions that are offering competitive mortgage rates. One institution might have a great one year rate, another a great five year rate and yet another a great variable rate mortgage. Trying to determine who is offering the best rate is not always an easy task! The big banks still refuse to tell you what their best rate is. They will only tell you what their posted rate is and then it's up to you to try and barter them down (if you can actually find someone to talk to in their branches). Some of the newer players, like ING and PC Financial will tell you up front what their best rate is. This is a nice change but there are usually even better rates to be had elsewhere. Educating yourself about the various mortgage products and mortgage promotions is not an easy task, either. If you have looked at a variable rate mortgage recently you will have discovered that every single financial institution has a different type of variable rate mortgage. The differences make it confusing for the average consumer to compare one product to another. This is not done by chance: this is done so the banks can confuse you enough to make you think you're getting the best product when, in fact, you're not. So what is the average consumer to do? You can try to educate yourself and shop for the best rate, or you can rely on the experience of a mortgage broker. Your best option will usually be a combination of the two. The usual place to start is with your current bank. Talk to them about your situation and see what they are prepared to offer you. Be sure to get any offers in writing! Once you have an idea of what your own bank will do then you can start to inquire with other institutions. Start with phone calls and do not give them a full application. Just tell them enough about your financial situation that they can give you a quote over the phone. Do the same with a few mortgage brokers. You essentially want to interview the bankers and the brokers to see who will offer you the best advice and the best rates. It is important to note that the person you are dealing with can make a big difference. It is not uncommon to speak to someone at the same bank and get two totally different answers to the same question. Some of the lenders are aggressive and want your business while others are underpaid, overworked and don't really care. The same advice applies to mortgage brokers. There are a lot of new brokers in the industry. Interview your broker to see how long they have been in the industry and find out if they know their stuff! A knowledgeable mortgage broker will usually get you a better mortgage rate than you could on your own. Remember that a mortgage broker is not limited to dealing with one or two lenders. They can deal directly with almost all the lenders in the industry to find you the best available mortgage. Once you have picked someone to deal with, you should stick with them. If your current bank comes back to you and says they will match the rate, tell them they're too late. They had their opportunity and they wasted your time. If you go back to them now, you are just rewarding their behavior. If you want the best mortgage, you must find the best people to work with. You can try to do it all yourself but you may fall short of getting the best available mortgage. If you educate yourself and rely on the experience of a knowledgeable mortgage broker or an aggressive lender you will often do a little better. |