We are very fortunate as mortgage brokers in that we have close to fifty lenders we can shop for our valued clients. At Robert Floris’s Mortgage Architects office in Hamilton we write as if what we would want to know if our roles were reversed. Mortgage rates are wonderfully low, but not all mortgage companies are created equal. This is why we want to advise the public and our loyal clients the four questions to demand answers when looking at low mortgage rates on your renewal, refinance and purchase.
    1. PORTABILITY-Most Canadians live in their home for little more than 3 years. Can you bring your mortgage with you if you move? The answer should be yes. Nobody wants huge penalties just because you saved a little of your rate. Your savings for the mortgage would be lost.
    2. PRE-PAYMENT POSSIBILITIES-Many mortgage companies are very generous with the pre-payment possibilities. Some companies allow up to 20% of the original mortgage amount, and that is good. But what if your goal is to pay off the mortgage fast? You will not be happy when the bank says no way. Clients who seek inexpensive mortgages are trying to save money. Nothing saves more money than a generous pre-payment because amortization is more important than rates.
    3. PENALTIES – Most companies offer normal mortgage penalties if you have to leave your home. Many low mortgage companies charge up to 3% of the total balance if you must leave for some reason. An example would be a $300,000 mortgage where the penalty would be $9000. Yikes, there goes your savings.
    4. FEES – Easy question when considering low rates. We had a popular on-line company offer a low rate which we could match. The best part, we did not charge a $1500 fee. Always ask about all the fees.
    I hope this helps when you go searching for the lowest mortgage rates.

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