When you are planning on purchasing a home, you want to try and ensure that you get the best mortgage rates possible, as it could affect you for many years to come. Finding a good mortgage rate could save you thousands of dollars, so it is worth the effort.
Here are several ways to help ensure you get a better mortgage rate and save yourself money on one of the biggest investments you will ever make in your life.
Since buying a home is a massive and long-term investment, you want to ensure that you’ve done ample research and that you are not caught unawares by any hidden fees, costs or other fine print.
There are different types of mortgages out there offered by different types of lenders. Therefore, it is important that you become acquainted with them so that you fully understand what the differences are ‒ such as the difference between an open or a closed mortgage. You should also know what the features of your chosen mortgage are, as well as what the restrictions are and how that will impact you going forward.
To improve your mortgage rates, you want to make a down payment. Saving up for as large a down payment as possible will make a significant difference on the interest rate that you are offered on your mortgage.
The larger the down payment, the smaller the mortgage will be, which will reduce its cost and save you a lot of trouble and headaches in the years to come. Ideally, you would like to pay somewhere in the region of 20% of the property value upfront to improve the rates you are offered.
Improve Your Credit Score
Improving your credit score can be a difficult thing to do, but if you plan in advance and work ahead, it can be achieved. The first step is to determine your credit score. If it is less than desirable, you can then work to improve it.
A poor credit score can stand in the way of you getting a good mortgage rate. Generally speaking, the minimum credit score required for a mortgage in Canada is somewhere between 620 and 679 points. However, ideally, you would want a credit score of 680 to 724 points. If you fall within this range, you will most certainly be offered better borrowing rates.
Several ways of increasing or improving your credit score could be to spend less than 30% of your credit line, ensure that all of your bills are paid and up to date, and limit how many credit cards you apply for.
While you can do a lot of research on your own, few people understand the complexities of mortgages, loans and financial systems as well as professionals who work in the field. Therefore, before you make any decisions or sign on the dotted line, it is advisable that you get advice from an objective but informed broker who can help you get the best deal possible.
Here at Nowik Mortgage, we can help you best mortgage rates so that you can buy the home of your dreams without being fleeced. Contact us today for advice and assistance with finding the best mortgage rates!