Buying a home is exciting. And whether it’s your first home, or even your 3rd home, it can get a bit stressful too. From first time home buyers to market veterans, there’s a lot to take in when it comes to mortgage financing.
As a mortgage broker, it’s my business to know the ins and outs. But for many Canadians, looking into mortgage financing isn’t a daily event. My buddy Mike recently reminded me of this when we were out for dinner and he asked: “Chris, I’m getting frustrated trying to understand mortgages. What are the absolute basics I need to understand to get the best mortgage?”
It was a great question and in chatting with my friend, I shared with him four tips that every first time home buyer can follow to get the best mortgage for their needs.
Wondering how to get the best mortgage?
Four First Time Homebuyer Mortgage Best Practices
1. Don’t Bury Your Head In The Sand. Was Rome built in a day? Of course not! You aren’t going to become a mortgage expert overnight. But taking a backseat approach is not going to do you any good either. There are plenty of resources online to help you. I like the Financial Consumer Agency of Canada’s site with unbiased information provided in a fun easy to read format. Canada Housing & Mortgage Corporation also has great mortgage tools where you can crunch numbers and figure out your mortgage payments.
2. Know What You Need and Want In A Mortgage. While many borrowers are focused on rate and chip away at the mortgage with minimum payments you should consider future needs and goals too. You should be able to define and express those needs. Some mortgages are designed for flexibility while others are for long-term stability.
3. Consider Features and Shop Around. The interest rate is the price of the money you borrow. As you start to visit various websites and talk to brokers you might find that there is similarity between rates and products offered across the board. If the price is the same then how do you choose where to place your mortgage?
Consider that your mortgage is a long term debt and your needs will change as your life changes. If you go directly to a financial institution you are left to your own devices regarding advice and guidance. Alternatively, working and creating a trustworthy relationship with a good mortgage broker who is focused on advising clients over the long term has huge advantages especially later on in life as your needs change. Maybe you want to buy a vacation property or investment rental property. You want to build a solid relationship and surround yourself with these professionals who you can trust. Best part is that all the services of a mortgage broker are free.
4. Select What’s Right For You. I often sit in front of clients who say to me “Chris just do what you think is best, do what is right.” Unfortunately there is no silver bullet when it comes to mortgages. You are given choice because needs and wants vary across a wide spectrum. If you’ve followed the previous 3 best practices then inevitably you will have formed a very clear picture of what you want. In almost every case your gut feeling is right.
Wouldn’t it be nice knowing that you’ve made the right choice, found a great rate and have the support of a trustworthy mortgage broker to guide you along the way? Use these four best practices to help start your search.
Interested in working with me? Did you know that my service is free of charge to you because I am compensated through a finders fee? Reach out to me. Ask me a question, contact me, or leave a comment below. I love to hear from my readers!