Let’s face it, who doesn’t want the lowest mortgage rate? If you’re purchasing a new house, you’re probably on the lookout for not only the best space for you to live in but also the best mortgage rate that you will be saddled with for the next couple of years. The thought of struggling to pay mortgage each month and ending up with the house being up for foreclosure will send shivers down anyone’s spine.
Mortgage rates differ from one lender to another. The lowest rates are typically awarded to the most qualified home buyers. You would want to know if you are one of those qualified home buyers.
Factors that will Determine Your Mortgage Rate
1. Credit Record or Score
One of the things lenders uses to determine your mortgage rate is your credit score. This score represents your ability to pay for the loan. The lender will use this to calculate your rate and whether or not you qualify for a loan. As expected, the higher your credit score is, the better your mortgage rate.
2. Financial Stability
Any lending firm will want to look in on your financial background – whether you have a stable source of income or not. If you can provide proof of steady income, you have better chances of being approved for a mortgage.
3. Amount of Down Payment
How much you are initially putting in also determines your mortgage rate. In Calgary, it is customary to shell out a minimum of 5% for down payment. Depending on your savings, you can increase your down payment in order to get the lowest possible mortgage rate. Lenders are able to give lower mortgage rates for those with higher down payments as they are considered less risky.
4. Reserved Cash
Extra money on your savings accounts, deposit certificates or money market funds can also contribute to your eligibility for a mortgage. The more cash reserves you have, the more financially stable you will look in the eyes of the lenders. In Calgary, you can also use your RRSP to pay for down payment. You can get as much as $25,000 from your retirement plan to use as a down payment.
How to Find Lowest Mortgage Rates in Calgary
Setting up a solid financial reputation can easily get you the lowest mortgage rates. However, it’s also important to look around and see which lending firms are able to give you the best deals.
1. Do a mortgage rate comparison.
Take your time in finding lenders in Calgary and comparing their loan rates. It will require some effort on your part so you should be prepared to do your research. Most lending companies now have a website so it should be easier to get quotes.
2. Find a good mortgage broker.
Most people would deal with the mortgage part of buying a home themselves. But think about hiring a mortgage broker. A good mortgage broker has a lot of contacts so he can direct you to the best lender who can offer the best deals.
Also, a good mortgage broker will be able to prevent you from signing up to a shady deal with hidden charges. Many mortgage brokers are also affiliated with lending companies so they can help you waive some of the additional fees in the mortgage transaction. This can save you thousands of money.
3. Ask around.
While most of the information you need to compare mortgage rates can now be found online, it doesn’t hurt to ask around. Your friends or family might know a good lending company that offers solid and reasonable mortgage rates. In fact, if they are home owners, they might be tied up to one.
Ask about their experience dealing with the lending company. You might even be able to unearth information about some unethical companies with hidden fees and rates.
4. Add your RRSP to your down payment.
The higher your down payment, the lower your monthly mortgage rate is. You can increase your down payment by dipping your hands on your retirement fund. The Canadian Government’s House Buyer’s Plan allows people with RRSP to get as much as $25,000.
Get the Services of a Mortgage Broker
If you want to save yourself the trouble of scouring for every bank or lending company in Calgary, hire a mortgage broker. The best brokers are affiliated with a plethora of lenders so they are experts on mortgage rate comparison and steering you in the right direction as to getting the lower mortgage rates.
Talk to a reputable mortgage broker who can find a lending company with a mortgage rate offer tailor-fitted for your needs.