Ontario Mortgage Interest Rates – Mistakes to Avoid When Buying a Home
Have you considered the fact that your annual mortgage, taxes and insurance costs can total between 25% and 40% of your total annual income? This is a huge investment you are thinking of making for yourself and your family! If you are able to secure the best Ontario mortgage interest rates, it will not only be a huge investment, but a smart and beneficial one as well. Taking the time to figure out exactly what the best Ontario mortgage rate is for your situation will save you huge amounts of money throughout the length of the term. As you go through this process, you should avoid the top mistakes that people make when they choose not to work with a broker to secure financing for their new home.
First, you should always become pre-approved. This is not the same as pre-qualifying, and not knowing the difference is a big mistake for future homeowners. To pre-qualify, you are simply asked a few questions. For pre-approval, the lender will conduct practically everything needed to fully-approve you. The only parts that are left out are the appraisal and title search since there is no property yet to conduct these procedures on. The reason why becoming pre-approved is so important is that it is the best way to be able to negotiate the seller down to the best buying price possible. They know you have acquired the best Ontario mortgage rate that can possibly be offered you, so your agent can help bring the asking price down.
To appreciate the best Ontario mortgage interest rates, you cannot make the next mistake that is common among homebuyers which is to make verbal agreements. Sometimes a seller may say that a home comes with a washer and dryer, but if the written contract says otherwise, the written words override the verbal communication. Always get any promises made to you in writing. This is applicable for any agreement between you and the buyer, you and your broker, or you and the lender. Never agree to sign anything that is contrary to what has been discussed.
The next mistake is one that may surprise you. You cannot simply choose a lender because they have the best Ontario mortgage rate. There are so many other considerations to make that this number is certainly not the only aspect you should be considering. Remember APR, loan fees, closing costs, discount and origination points. Some lenders are skilled at quoting their Ontario mortgage interest rates to make them sound better, such as only disclosing the discount points when the origination point is important as well. All of these points to consider can become confusing very quickly, which is why it is so important to work with a broker if you want the process of procuring the best Ontario mortgage interest rates to not ruin your experience of buying a home.
Another mistake homebuyers make to simplify the process is to choose a lender based on recommendations made by your realtor. While they certainly have your best interest at heart, realtors deal in real estate, not finance. The fact is that they probably make a recommendation to get you choosing a lender faster because they will not earn a commission until the transaction is complete. Also, the realtor may simply be making their recommendation based on a friend working with one company or another instead of focusing on any advantages of using that lender. A broker, as a third party member, will be able to provide you with unbiased advice to secure top-notch Ontario mortgage interest rates.
It is almost always a mistake to use a dual agent—that is someone who represents both the buyer and the seller in a single transaction. Think about the fact that buyers and sellers have conflicting interest of selling price. Since the agent will earn a commission based on the amount the seller can sell for, you will likely receive less beneficial representation from this kind of agent. The only time to opt for this when buying a home and trying to benefit from the best Ontario mortgage rate is if you receive a price break as a result of the dual agent lowering their commission. Still, proceed cautiously.
When it comes to buying a home and finding the lowest Ontario mortgage interest rates, you should never sign anything without reading it. This mistake is common because people are in a hurry and assume that everything is as they talked about. However, as stated previously, sometimes a verbal agreement will not translate onto the page.