Are Low Rates Enough? What to Look for in a Mortgage

Let’s get the basics out of the way: Of everything you want in a mortgage, few things are more important than a low rate at a bank with a good reputation. The low rate will save you money over the course of your loan repayment, and a bank with a good reputation will help make dealing with your mortgage a delight. But are a low rate and a reputable lender all that you should be concerned about when shopping for a mortgage? The answer is no. There are many questions you should be asking while you are considering different lenders and mortgages. Here are just a few of them:

Does the Lender Have Other Products that Interest Me?

Many Canadians are happy to use a different financial institution for their mortgage than for their checking accounts, savings accounts and other financial products. In many cases, however, you’re leaving money on the table when you keep your financial accounts at several different institutions. Many lenders offer discounts and other incentives to their mortgage customers when they open other accounts with them. Look into the other products that each lender offers and inquire as to which particular lenders offer incentives if you open more than one account with them.

Are There a Variety of Loan Servicing Options Available to Meet My Needs?

Traditionally, borrowers pay their loans monthly, but there are many other repayment options that can help borrowers pay off their mortgage faster and save money on interest over the life of the loan. The most common of these include biweekly and weekly loan payments. If you choose either of these options or switch to them during your repayment period, you can shorten your loan by up to five years and save as much as tens of thousands of dollars on interest. Find out which lenders offer these servicing options and whether there are any charges to use them or to make a switch to them while repaying your loan.

How Easy Is It to Refinance Your Mortgage?

You will likely be refinancing your mortgage several times over the life of your loan, so you want to have a good idea about the refinancing process with each lender. Will they offer to refinance without any additional charges before the end of the loan term if rates go down? Are there reduced paperwork requirements if you stay with the lender at your renewal period? Basically, you want to know how easy it will be to refinance your loan.

How Helpful Is the Loan Officer?

Customer service is always a vital consideration, and when it comes to mortgages, the most important person with whom you will deal is the loan officer. A lender might be otherwise great, but if the loan officer is not easy to work with or cannot explain things to you in a way you can understand, you’re probably better off with another lender.

Conclusion: Research Is Key

Doing the research is key for getting a mortgage that will be easy to deal with over time. We’ve made it easy to compare different lenders and mortgage loan rates. Just make sure that you ask the right questions, and look for more than just the lowest rate when you are considering mortgage lenders.