Posted onFebruary 16/2016
Buying a house can be intimidating, especially for first-time homebuyers. But whether you are buying your first, second, or even third home, you should practise due diligence when seeking out a mortgage. One of the most important aspects of a mortgage is the interest rate. Contrary to popular belief, banks do practise discretionary pricing in their interest rates, so it pays to be aware of what your options are before signing off on a mortgage. Here are a few tips to keep in mind when trying to find the best mortgage.
Don’t Take The First Offer That Comes To You
People are often comfortable dealing with the same financial institution with which they bank regularly, and banks know this. But instead of giving the best rates to their loyal customers, banks (ironically) often offer them to new customers as an incentive to join. That means you should try another institution if the rate on offer is not the best. If you aren’t sure, then look elsewhere.
Enlist The Help Of A Mortgage Broker
Shopping around for the best rate is what mortgage brokers specialize in. Unless you feel competent enough to do it yourself, it is best to get the help of a mortgage broker. They already have relationships with all the major lending institutions you are likely to get a mortgage from, so they are in a position to negotiate the best rates.
Know Your Appetite For Risk
It is important to know how risk averse you are. This will help you in deciding when to take out a mortgage and what type of mortgage to take out. Mortgages often come with interest rates that are either fixed or variable. It is not a light matter deciding which one is best. If you prefer stability, then a fixed rate is suited for that. But if you believe that interest rates will fall (and you are inclined to take risks), then the variable rate is better for that. Of course, you should consider all factors with your mortgage broker.
There are other factors you should consider, such as fees, market conditions, and your personal financial state. You should discuss all of these things with your mortgage broker before deciding on a mortgage. If you are looking for a mortgage or would like to get advice on how to go about getting one, then talk to our brokers