Questions to Ask Your Mortgage Lender

Jun 17, 2019

mortage application form

If it’s time to finally begin the search for townhomes for sale in Etobicoke, ON then it’s time to look for a mortgage lender that’s right for you. Choosing a mortgage lender that can give you the best deal for your current situation can make all the difference in how effectively you can pay off your home mortgage in the coming years. This involves asking the right questions. Below are a few questions you should ask to get the process started the right way.

“Will I be able to pass the mortgage stress test?”

It doesn’t matter which lender you meet when looking for townhomes for sale in Etobicoke. Your mortgage lender will require you to pass a mortgage stress test. This test inflates the interest rate you qualify for so the lender can be certain you can still pay your mortgage even if unforeseen events occur (e.g. loss of wages). If you cannot pass the mortgage stress test, a good lender will provide feedback on how to improve their application and get pre-approved.

“How long until I’m pre-approved?”

That is ultimately up to the type of mortgage you are applying for. It also depends on your financial situation. There are mortgages that take longer than others, but you can expect to hear news about your pre-approval status within a month at the most. Once again, a good mortgage lender will tell you why your application was denied and what you need to do to improve your odds of getting pre-approved.

“Fixed or variable interest rates?”

If you are pre-approved to go forth with purchasing a townhome for sale in Etobicoke, ON then you need to know which type of mortgage you want. A good place to start is to decide on the interest rate. There are two types: fixed and variable interest rates. It’s vital that your mortgage lender understands the advantages and disadvantages not only in a technical sense but also in terms of understanding where the economy and interest rates are headed. With this knowledge, they should be able to apply it to with your financial situation in mind to find the best interest rate and mortgage for you.

So what’s the difference between the two? A fixed interest rate ensures the interest rate stays the same through the life of the mortgage. It’s a great option for borrowers when The Bank of Canada’s interest rate is already low with signs of an uptick in the future. A variable rate can increase and decrease based on The Bank of Canada’s interest rate. Although a fixed rate is a safe option, if interest rates ever drop borrowers will be overpaying. For borrowers that can budget for a mortgage that increases-and-decreases monthly, a variable interest rate is a good way to ensure they are paying exactly what the market dictates.

townhomes for sale in Etobicoke

“If I’m not happy with my interest rate, what can I do to lower it?”

When searching for townhomes for sale in Etobicoke, a good mortgage lender will be able to tell you exactly what you need to do to lower your interest rate and get the best deal for you. It’s a great way to take advantage of the amazing townhomes at Dunpar Homes so be sure to adhere to their good advice when they tell you how to secure an interest rate that’s comfortable for you.

 

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