| Sometimes the lowest mortgage interest rate is just not worth it...
There are other important factors to consider when evaluating a mortgage: |
1. Are there any annual fees or service charges? If so, they can negate the benefit of the lower mortgage interest rate. 2. What is the pre-payment penalty?  Certain mortgage products have a low mortgage interest rate, but if you pay it out before the contract has matured, there are extra penalties and fees to pay. 3. What are your future plans?  Will you sell in a year or two? Do you plan on buying a rental property?Will you need funds for a renovation, vacation or investment?
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4. Does your current mortgage align with your goals, or could it better suit your current needs?  A properly structured mortgage can save you more through minimizing penalties, offering flexible payment and pre-payment options or by granting you access to your equity for home renovations, vacations or investments. 5. How will you be treated when you need to contact your lender?  You need to consider the level of service provided by the lender and your mortgage broker. |
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Times in Need - Example 1 |
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A broker in our office had a client who was going through a divorce, and the house had to be liquidated. The Mom and kids wanted to stay in their home, but could not quite qualify to refinance it. Their lender, which was not an chartered bank, |
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decided waive the penalty required for their refinance in order to keep their family and home in tact. Sometimes this lender has mortgage interest rates that are 0.1% higher, (though they are usually the same as the lowest rates available), resulting in just a few extra dollars per month on the mortgage payment. Though this is an extraordinary example, I have access to lenders who are very supportive of their clients and will make adjustments to help their clients through tougher times. |
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Times in Need - Example 2 |
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This couple had found themselves in some financial hardship, but did not miss any mortgage payments. They visited a lender who offered them a loan to access some of the equity in their home, so they set it up - they thought it was easier than trying to explain their financial challenges to their bank. |
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| A short time later, they received a registered letter from their bank indicating that they were foreclosing on their mortgage loan. The lender had a clause in the mortgage contract that the borrower could not have a second charge registered on the title of their property, and immediately foreclosed the mortgage, as a matter of policy. The bank did not contact the client to notify them of this breach of contract or try to make arrangements to remedy the situation (such as return the loan and have the second charge removed). You need good advice to know which lenders are more service oriented and which ones are more policy bound.  |
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The lowest mortgage interest rate is only part of what makes a good mortgage. Getting the right mortgage product with a high level of service from your mortgage broker and lender are equally important. |
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You do not have to fit your mortgage, |
| If you would like more information or a free mortgage review, please contact me. I would love to serve you in any way I can.
Richard Batke - Mortgage Broker web: www.thehomefinancecentre.com * Purchase * Refinance * Renew * Debt Consolidation * Serving the South Okanagan Valley including: Peachland BC | Summerland BC | Naramata BC | Penticton BC | Oliver BC
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I guess some times you do get what you pay for...
The old adage is true, and it really comes down to the personality (so to speak) of the lender.
When considering a number of my "A" lenders, there are some that are strictly policy driven without concern for the customer, and there are those who freely communicate "If you are finding it tough to make ends meet at some time in the future, let us know and you can skip a payment or we can temporarily reduce your payment - We are not in the foreclosure business..."
Have a great day!
It will be interesting to see what the new rules here that went into effect Jan 1 do to the rates