Hunting for a low mortgage rate? Here’s what you need to know
Let this sink in: a home is the most expensive thing you’ll ever buy. After all, not even the coolest car or impressive boat will come close to the investment you’ll make in a house. And rightfully so; turning a house into a home is a rewarding process that many people look forward to for years.
The purpose of shopping around for mortgage rates may seem self-explanatory, yet not everyone expresses their freedom to compare all their options. In fact, a study conducted in 2017 reported that, when compared to other countries, Canadians were least likely to seek out information to guide their financial decisions.
It’s important to take note that comparison shopping for mortgage rates is incredibly useful; it can save you a ton of money in the long run! When potentially spending hundreds of thousands of dollars, you’ll want to save every penny you can on extra expenses like interest.
Now you may be wondering: “How exactly do I shop around for the best mortgage rates?”
Rate comparison websites are a good place to start.
There are websites that will allow you to compare mortgage rates from a variety of lenders, making the process very simple. One of the leading comparison sites is CompareMyRates, but many online tools allow you to look for rates in your province. You can even narrow down your search by mortgage types — fixed or variable — as well as the duration of your loan.
Just because you shop around for rates doesn’t mean you have to go it alone. Sure, you may be comfortable contacting lenders directly and diving right in to the mortgage hunt. But more than likely, you’ll want some help along the way in the form of a mortgage professional at your bank.
Not all lenders and rates are available on all comparison sites, so you need to do your due diligence and research options across multiple comparison sites. However, you should know that the most appealing rates on these websites usually come with incredibly stringent conditions that not all home buyers meet. We’re talking high credit scores, high incomes, and large down payments. Don’t be discouraged, though. With thorough research and preparation, you can absolutely find a mortgage rate that meets your needs.
Using rate-comparison sites is an easy way to scope out mortgage rates without inquiring about individual rates from lenders. However, you should be aware that some offers featured are only available directly through the mortgage brokers that are advertising said rates. For standard home buyers with uncomplicated application needs, doing the research on your own can save you time and really accelerate the rate-comparison process.
Unfortunately, for borrowers that have low credit scores, unsteady income, and/or are self-employed, rate-comparison sites may not be the best route to take. If you fall into this category there’s no need to fret, but a mortgage broker will likely make your process more efficient.
A final tip to keep in mind? Don’t get caught falling for sponsored mortgage rates. Lenders will pay to have their rates advertised prominently, but they don’t always have the best rates or terms. View all options that are presented to you, and don’t just opt for the first deal on the page.
All in all, shopping for mortgage rates doesn’t have to be miserable. By choosing the right strategy for your needs, you can eliminate a stressful step of the home buying process.