Negotiating your first mortgage
by Harleen Kaur - December 1, 2009
Canada, December 1: Thinking of buying your new home? Now seems to be the right time for it. But, you need to learn how to handle your first mortgage deal.
There are a few things to be kept in mind while negotiating your first mortgage deal. These are listed below-
· Different rates of interest-The first thing to be remembered is that all mortgage institutions are not equal. Take, for instance, big banks which are quite reluctant to decrease their rates of interest, while small financial institutions will quote their lowest rates. While big banks have a five-year fixed rate mortgages ranging between 5.49 percent and 5.55 percent, small institutions like ING Direct’s five-year mortgage rate is stable at 3.99 percent.
· Figure out your monthly budget-This is extremely vital factor for you before you go for selecting any particular financial institution. The budget you decide must be in accordance with your comfort zone. A number of financial institutions suggest the mortgage borrowers not to devote anything more than 30 to 32 percent of their gross income towards mortgage payments and taxes towards property.
Although majority of financial experts recommend going for variable rates of mortgage, many new buyers prefer to choose fixed rate mortgage for financing their new homes.
· Hiring a mortgage broker- Also, a popular concept is hiring the services of a mortgage broker for striking the best and the most profitable deal. According to a survey by CMHC (Canada Mortgage and Housing Corporation), nearly 33 percent of buyers hired the services of mortgage brokers in 2008, revealing a significant rise from the previous year’s (2007) percentage of 27 percentage.
· Research-While selecting any particular financial institution, it is advisable to consider various terms and conditions of the mortgage. If you are hiring any mortgage broker for the job, ask him to give you all the terms in writing.
So, now you know that searching and selecting the best option for your first mortgage deal is not a child’s play.
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