It can be quite daunting to try and look for the lowest mortgage rate in Canada. It is for this reason that with so many choices to make, it is easy to be bamboozled by the numbers and the jargon. But fear not! Here are five easy ways Canadians can get the lowest mortgage rates.
Shop Around and Compare Rate
The first way to get the best mortgages is simple: do not accept the initial bid. Different types of lenders include banks, credit unions, and online lenders, and they all have different rates. It is important to spend the time to compare. Go to several websites, and look through such sections as mortgage comparisons. These tools provide a feature that offers a comparison of rates offered by different lenders side by side.
Improve Your Credit Score
Your credit score determines the type of rate that you are given for the mortgage. This is the case because a higher credit score is likely to be associated with better rates of interest. If you feel that your score is not good enough, don’t worry. It is, however, possible to enhance it through certain measures. The first thing to do is to check your credit report to ensure that there are no errors. Reduce the total amount of credit card balances and ensure all the payments are done on time.
Think about Employing a Mortgage Broker
Mortgage brokers are individuals who deal with several lending institutions in order to source the most appropriate interest rates for you. They are able to get the best mortgage rates. Broker services can be very useful to you in a way that you will not have to go through the process of searching for housing on your own. Unlike the situation where you approach several lenders on your own, a broker does most of the work for you.
Select a Shorter Tenure or Adjustable Rate
The term mortgage refers to the period within which a borrower repays their loan, and the interest rate depends on the length of this term. In general, when defining the period of cooperation, shorter terms are characterized by lower rates. The most popular option is five years, but you can also opt for two or three-year terms, which are normally cheaper. Selecting a term of fewer years or selecting for variable rate may be cheaper in the long run if the plan is to pay off the mortgage more quickly or if the rates remain low.
Time Your Application Wisely
Time plays an important role in determining the mortgage rate that one can be offered. Interest rates vary depending on the economy, and, therefore, there are times when they are low. If they are, then it is better to wait. On the other hand, if you expect interest rates to go up, it is wise to lock in the rates early enough. Most lenders provide rate locks that enable you to lock a specific rate for some time while closing your mortgage.
Conclusion
Getting the right mortgage rate is easy if you don’t make these common mistakes. Canadians can easily look for rates that they can work with by shopping around, improving their credit, seeking help from experts, and choosing the right terms and timing. It is not a race, and do not rush. Make sure you gather all the relevant information and do not hesitate to ask questions.
