Mortgage interest rates are never arbitrary. This means that the interest that the lender quotes to you is based on several factors. Knowing these factors and how you can use them to your advantage is usually very important for anybody planning to apply for a mortgage. While this will take some time and planning, the good thing is that you will be able to get the loan and at affordable terms. Below are tips to help you get the lowest mortgage rates in Ontario.
One thing that every lender will be sure to look at before fixing your loan interest rate is your credit score. Because of this, you should always work towards improving your credit score round the clock. This can be achieved by paying your debts in time. Just paying the debts alone is not enough. Late payment may still make you look more of a credit risk.
You should also shop around. Because of stiff competition that exists in the mortgage world, lenders are always lowering interest now and then in order to attract clients. So before signing for home loan from one lender, it will be important to window shop. If you have been a loyal client with any bank, you can ask them if you qualify for any special rates.
The size of your deposit will also go a long way in determining the interest you pay. Virtually all lenders calculate interest rates for clients based on loan to value banding. This means that you will pay more if you have less deposit. Apart from this, high deposit also means that you borrow less. As such, you should always save as much deposit as you can.
Lenders will also feel secure approving your loan if you have permanent employment or longer contract. So if you have evidence of a recent contract renewal or job promotion, you will be able to attract a lower rate. If you can manage to get reference from your employer, that will be an added advantage that will definitely work to your advantage.
Experts also advice that you should take short term mortgages. Even though the monthly installments will be very high, if you can afford this high installment it will save you some money in the end. Remember that the longer you repay the loan, the more you will repay. It is therefore advisable to repay it within the shortest time possible.
Before signing up for the loan, you also ought to find out more about other fees associated with it. Sometimes a loan advertised at lower rate may end up costing you more when other fees are included. There are lenders who blend all these fees into loan preparation fee while others do not. To be on the safe side, you inquire inquire from your lender how much it will cost to close the loan.
Follow the above tips and you will be assured of the lowest mortgage rates in Ontario. Applying for credit card just when you are about to submit home loan application is also not a very good idea. This may send wrong message to the lenders.
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