The Key Questions to Ask About Your Mortgage – Consult with Bruce Coleman, Vancouver Mortgage Broker
The Key Questions to Ask About Your Mortgage
Whether you’re obtaining your mortgage directly through a bank or getting one through a mortgage broker, you will need to ask a lot of questions to get the best deal. It’s better if you are prepared beforehand and should have these questions written out regardless if you’re new to the process or been through it already.
Although you might think the mortgage rate is the most important factor, some of the responses you receive to your other questions may require you to re-think that the cheapest rate may not necessarily be the best deal for you.
You have to think down the road and consider such things as refinancing or what the penalties will be if you break a mortgage as the costs can outweigh the small benefit of a slightly cheaper rate and can end up costing you more than you think you will get with a slightly lower rate.
Key Mortgage Questions to Ask
The following questions should be posed to both a banking rep or to a mortgage broker when looking for the best possible mortgage deal
- Simply make sure you ask whether the rate they are quoting is the best possible rate they are offering given your circumstances. Ask whether they will match the rate if you find a similar one someplace else.
- Ask how long they will hold the rate and what the length of the holding period, and whether the lender will adjust rates should they fall.
- Ask whether the lender will provide you with a discounted rate when the mortgage comes up for renewal
- Ask about the lenders extra repayment options and how often they can be made, and whether there are any penalties involved
- You also want to know whether the lender will allow you to increase your ongoing mortgage payments as you financial situation changes because increasing your payments will help you to pay off your mortgage more rapidly.
- Another big question to be very clear about mortgage penalties if you break your mortgage before the term.
- Make sure you are very clear how the lender calculates mortgage penalties which you can also likely calculate using the lenders online mortgage calculator.
- Ask about what mortgage portability such as the terms or length if you plan to move to another home or property and what penalties might be involved.
- Ask about any restrictions or whether the lender will offer discounted rates when it comes to refinancing the mortgage and whether your mortgage is readvanceable (applies only if you have at least 20% equity). Note that that there are two types which include either manual or automatic.
- Ask whether you can split you mortgage into different parts which are known as “hybrid mortgages” and allows you to lock in a potion of your mortgage at a fixed rate with the other portion at a variable rate.
- Ask whether the lender offers early renewals
- Ask about the flexibility when it comes to the amortization.
- If you plan to sell your home to a sibling or one of your children you might also want to ask whether the lender will allow the mortgage to be assumed.
- Ask about “payment vacations” which allows you to skip a mortgage payment which can be important to someone who is self employed or works seasonal.
These are but a few of the key questions to keep in mind. But as you can see, there is a lot more to keep in mind than just the interest rate when it comes to finding the best terms for your mortgage.