When you’re asking your friends, family and colleagues about their recent home purchase and their mortgage experience, often the conversation starts and ends with “what’s your mortgage rate?’
Here is the truth, when you’re shopping for a mortgage, the rate is a super important piece of the conversation, but it shouldn’t be the only piece of the conversation. We sat down the Renee Huse at Spire Mortgage one of our key impact partners and got the low down on the important questions you should ask your mortgage broker if you’re planning to get a mortgage.
7 things to ask your Mortgage Broker if you’re getting a mortgage in Calgary
1. What is the down payment requirement for this mortgage rate?
Reminder, mortgage rates differ depending if your deal is insured or uninsured. It's important to confirm your down payment with your broker, some rates aren't available for all home purchases, in fact, there are situations where rates are actually lower (up to 0.3% for uninsured mortgages) vs insured mortgages (home purchases that have 20% + down payments)
2. Is there any fine print attached to this mortgage rate?
Are there clauses or extra payout penalties that you should be highlighting to me? - If you've kept your eye on the market or real estate, you'll know why this is important, quite simply not all mortgages are black and white deals, there could be penalties for paying too much, or large extra payout penalties that could cost you thousands in the event that you need to break the mortgage. There could be extra hidden costs as well, from credit pulling fees, legal / lawyer fees, appraisals, etc.
3. What are my options if I have to sell my house?
Can I pay the mortgage off with out penalty? Can I “port” this mortgage with me to another home? - One of the key questions to ask for those who may be purchasing a transition home, we have many buyers who start with condominiums or town homes who have plans to make a move in >5 years and knowing whether the mortgage you're considering is portable, or able to be paid off early is an important detail that is often overlooked.
4. Does this mortgage lender have an online portal so that I can track my payments and mortgage balance?
This may come to a surprise to some, but even in today's digitally infused world, not all mortgage providers have online portals for their clients, it may be minor for some, while for others is essential, which is why we've added it to the list of questions you should be asking.
5. Does this mortgage rate require 25 or 30 year amortization, or mortgage life?
Some mortgage rates require specific amortization periods (the length you'll take to pay off your mortgage) for many new home buyers this is 20-30 years, however, there are many buyers out there who have different financial goals and plans and could be seeking a mortgage that's 20 years or less in length to lower their overall payments in interest.
6. What is my payout penalty if I break the mortgage before the term is up.
Ask your mortgage broker to provide a realistic example of the payout penalty that you would incur if you broke the mortgage before the term. It's also important to note that a fixed rate mortgage payout will vary from a variable rate mortgage payout, ask your mortgage broker to clarify the payout penalties, you can even ask for a scenario where you're halfway through your term
7. Do I have the ability to add a “secured line of credit” to this mortgage now or in the future?
Another great question to add financial flexibility in your life,
8. Should you go with a fixed or variable rate mortgage?
One of the bigger decisions outside of who you choose to get your mortgage with. We covered FIXED vs Variable Mortgages in a previous blog, but we highly recommend that you connect with a mortgage professional who can ask you the right questions and help you navigate this important decision.
Answers from a Calgary Mortgage Broker
A final note from one of our key impact partners Renee Huse with Spire Mortgage
Even though we are constantly striving to get the best rates for clients and compete with the best offers in the market, we value providing accurate information for long term financial planning above all. Make sure to choose a Mortgage Broker that is able to ask you about your current and future financial plans and help you see the implications of different mortgage products on those goals. A low mortgage rate is awesome, but if you’re missing out on flexibilities that move you towards your long-term goals, a slight rate premium might be worth it in the end. Happy House Shopping!
Spire Mortgage Team | Renee Huse Phone: (403) 804-5465