Mortgage Calculators or a Mortgage Professional?
While many different websites offer a variety of mortgage calculators so that you can run the numbers and compare options, this website does not. To truly be able to do this you need professional expertise related to your financial situation. As a starting point, it is important to understand the difference between getting pre-quaified for a mortgage and getting pre-approved for a mortgage. Mortgage calculators will not tell you this. If you do not contact me and let’s discuss why this is a very important part of the home buying process.
Once we have had a chance to discuss the real estate buying process, I can offer advice on getting better informed and equipped by talking to a financial professional. It is important to consult with a financial professional before making any financial decisions and commitments concerning the purchase of your new home. Do you understand the differences between a mortgage broker and a mortgage officer who works for a specific financial professional? There is a difference and knowing what the difference is may be very important for your specific financial circumstance as you get ready to go out and buy a new home.
A mortgage broker is not tied directly to any financial institution. They will check with many of them in order to get the best value for you. Make an appointment to see a broker early in the home buying process. Come to the appointment with a list of questions that you want answered about mortgages. Ask the broker what information they will need in order to get you financially pre-qualified for a mortgage. Understand the term and length of the mortgage that you are interested in. If you are not sure, ask for their advise on what is best for you based on current interest rates and your unique financial situation. Everyone will have a set of circumstances that will apply to them. Should the term be locked in for a short period of time or a longer period of time? Should you have a fixed or a variable mortgage? How long should the mortgage be taken out for? Which financial institution will offer you the best value? What are the costs associated with taking out the mortgage? What are the mortgage penalties should you wish to pay off the mortgage sooner or need to discharge it before the term is up? How much can you pay off on the mortgage each year in addition to the regular payments without any penalty? Do you know the law as it applies to mortgages taken out with terms over 5 years? These are but a few of the many questions that you should have answers to before you decide on any mortgage.
Just because you have had a mortgage with financial institution X does not mean that you should continue to blindly take out a mortgage with them in the future. This may or may not be your best mortgage option. Financial institutions are businesses first and foremost and their aim is to make money. They may or may not have your best interest at heart.
When you meet with the mortgage broker ask for several options from which to choose and get them to explain why they chose the options for you. Good brokers can save you money. Remember to look at the mortgage holistically and not just from the perspective of the borrowing costs and terms. Payouts and penalties are also important. Things can change and they often do. You may be planning on a 10 year term now but what happens if you have to sell in 6 years based on new circumstances? Plan for today and the future. Your mortgage broker can help you do this.
Contact me and let’s talk about some of these and other considerations before you buy your next home.
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