Fortunately for buyers, there are a variety of mortgages to choose from. It is in your best interest to investigate each of them to determine which is the best for your situation. You probably won’t qualify for all of them. In fact, you may only qualify for one. But if you do qualify for more than one, you may save yourself money (and worry) in the long run if you do your homework before signing on the dotted line.

Fixed Rate Mortgages

Consider a fixed rate mortgage if either of the following describes you:

- You plan on living in your new home for many years, and/or

- You are not a risk-taker and prefer the stability of knowing how much your payment will be each month.

Since most home loans are for a period of 25 years, if you want a payment you can count on for that long of a period of time, a fixed rate mortgage may be what works best for you.

Once your loan amount and interest rate are calculated and locked in, a fixed rate mortgage will guarantee that you will have the same payment over the life of the loan. Making extra payments to principal will allow you to pay your loan off sooner.

This may not always be the best choice, however. If interest rates are very high at the time you take out your loan, with a fixed rate mortgage you’ll be stuck with that high interest for the life of the loan (unless you choose to refinance).

Conversely, if interest rates are very low, you’ll come out the winner with interest rates that will stay low no matter how high interest rates go in the future.

The following are the advantages and disadvantages of the varying lengths and terms of fixed-rate mortgages:

15-Year Fixed-Rate:

Pay off the loan in half the time of a 25-year loan.

Equity builds up more quickly than in a 25-year loan.

Payments are higher (which may be a problem if you lose your job or become unable to work).

20-Year Fixed-Rate:

Pay off the loan in 2/3 the time of a 25-year loan.

The overall interest paid is considerably less than for a 25-year loan.

25-Year Fixed-Rate:

The most common choice, especially for first-time homebuyers, as it’s the easiest of the fixed-rate loans to qualify for.

Monthly payments are lower than for 15-year and 20-year loans. This can prove especially helpful if you do not have a lot of “padding” between the amount you can afford to spend and the monthly payment for your desired property.

More desirable if you plan on staying in the same home for years, since equity builds more slowly than for shorter-term loans.

For income tax purposes, this term provides the maximum interest deduction.

Naturally, you want to get the best deal for the least amount of money. This holds true for mortgage rates as well.

A lower interest rate means a lower monthly mortgage payment, which can save you money in the long run. Also, it is easier to qualify for a lower payment than a higher one.

You basically have two routes to finding the best rate. The first is to do all the research on your own. The second is to use a mortgage broker.

Do-It-Yourself

With the advent of the Internet, much of this information is readily available online. Once you have educated yourself sufficiently about real estate loans, all it takes is the time and energy to sift through online resources to find the information you need.

Rates change quickly. That great rate you find today might not be there tomorrow. Once you find the rate you are looking for, submit a loan application and lock in that rate.

Some sources for interest rates on the Internet include: Rate Hub (http://www.ratehub.ca/)

Mortgage Broker

If you do not have the time or experience to “do it yourself,” look for a qualified mortgage broker that can assist in finding the right mortgage for you. Ask friends and associates who have refinanced or purchased recently if they have a broker they can recommend – or ask us!. You’ll want to find a broker who is energetic, flexible and knowledgeable about finance and loans and someone who has your best interests in mind.

Pro Tips

- Work On Your Credit Score

Your efforts to secure the best interest rate for your mortgage should begin with checking your credit scores and reports.

You should absolutely review your credit reports to check for inaccuracies or issues that may be dragging down your score. If your score is low, it’s worth the effort to improve your credit score by taking steps to pay down your balances and make all your payments on time. Having excellent credit will make you eligible for the lowest mortgage interest rates.

Read more: How Your Credit Score Affects Your Mortgage Rate

- Save Up for a Bigger Down Payment

This might seem pretty obvious, but it’s a very important tip.

When you make a small down payment on a home, banks consider you a higher-risk borrower than someone who makes a larger down payment.

So, the more of your own money you’re willing to invest in the property, the less risky you’ll be for the lender...making them more likely to offer you a lower interest rate!

- Decrease Your Debt

This sounds easier said than done, but decreasing your debt can help out massively when it comes to mortgage rates.

According to the 2020 National Association of Realtors Home Buyer and Seller Generational Trends report, over 40% of homebuyers cut back on spending, canceled vacations or reduced monthly payments on bills.

Lowering your debt-to-income ratio isn’t the only way having less debt can help you get the best mortgage rate. This is because carrying less debt also can improve your credit score - and, as we mentioned in our first tip, this makes you eligible for lower mortgage interest rates.

• Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home.
  
  
• Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You’ll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you’re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.
  
  
• List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.
  
  
• Representation By A Professional: Engage a REALTOR® with whom you feel comfortable with.
  
  
• Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
  
  
  1. One or more detailed maps with your areas of interest highlighted.
  2. A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.
  3. Paper and pen, for taking notes as you search.
  4. Instant or video camera to help refresh your memory on individual properties, especially if you are attending a series of showings.
     
     
• Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?
  
  
• Visualize the house empty & with your decor. Are the rooms laid out to fit your needs? Is there enough light?
  
  
• Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don’t make a hurried decision that you may regret later.
  
  
• Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don’t forget such essentials as:
  
  
  1. Include inspection & mortgage contingencies in your written offer.
  2. Have the property inspected by a professional inspector.
  3. Request a second walk-through to take place within 24 hours of closing.
  4. You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).

All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please contact us to discuss any of these matters in further detail, or how a Realtor can help you find your dream home.

Real estate deals can be long, drawn-out exercises... often filled with boring procedures and stress-inducing formalities!

You may be keen to get the whole selling process over and done with, but are you truly ready to make the sale? Maybe not just yet.

Be sure to keep these factors in mind before you secure the deal! 

Make Sure The Price Is Right

You won't be surprised to hear this is the most important factor that comes into play when selling a home. Look at it this way, every house is “sellable” if it is priced accordingly - so be sure to price it accordingly!

That means you should be realistic about the home’s true market value, and avoid misinterpreting market data. You should only be factoring in SOLD homes in your area, of similar size, similar number of stories, similar features, and within a close year built range. 

There's also the temptation to issue a high asking price in the hope you can maximize profit, but that doesn't always go according to plan! Pricing too high to make room to negotiate probably backfires more often than it is effective. What happens is you price yourself out the buyer’s radar and never get the showing in the first place?

Be Showtime Ready

When buyers have options, they will often choose the house that “felt like a home” - so be sure the home you're selling is showtime ready!

Buyers are much more likely to go with a house after a viewing that has been staged perfectly. So, ensure the house is clean, smells great, appliances are working and any minor damages have been fixed.

It's worth paying extra special attention to areas of the home that that buyers will notice first, like the front yard, porch, and foyer. 

Remember, have your home looking as nice as possible and keep it that way until it’s sold - it will pay off in the long run!

Expect The Unexpected

Sometimes unforeseeable issues arise just prior to closing the sale. Hopefully, with good negotiation, most of these have a workable solution. 

For example, say your prospective buyers want to turn the unused attic as a playroom for their kids. However, before closing the deal, they request an inspection to see if it’s safe and if they will be able to install a skylight. This inspection reveals that under the shingles that are in good condition is a roof that will only last another year or two.

The prospective buyers immediately balk, not wanting to incur the time and cost of replacing the roof. At this point, you sit down with the prospective buyers and calmly discuss the situation and how it can be solved to the benefit of all. First, you agree to get another professional opinion on what really needs to be done. Inspectors are only human, and are not infallible. Once the extent of the damage is agreed upon, you can jointly decide what to do about it.

While the buyers hadn’t planned on that expense, you show them that instead of a limited roof life that they would get with most existing homes, they’ll have a new worry-free roof that won’t cost them in repairs for the next decade or so. Since the roof wasn’t in as good shape as you had thought, you agree to lower the purchase price to help offset the cost of the new roof.

By negotiating calmly and looking at all possibilities, what could have been a “deal breaker” can be turned into a win-win situation for both the buying and selling parties.