Whenever the promise of best mortgage rates is brought into a discussion, the phrase is actually generally misused. For there to be an objective “best rate” – all needs and conditions would have to be equal, and they’re not. A home mortgage is one of the most personalized and personally-structured financial engagements that you’ll ever enter into. Fundamentally: it is long-term enough to require deep consideration with few adjustable variables. But in these slight adjustments, banks and lenders can create a number of options. The best mortgage rate will always be the best rate for your needs at any given time. But that doesn’t mean that there aren’t a few guidelines to help your search.
Let’s begin with terminology. It’s where lenders will make their first impression of you, and also where you have the potential to fall behind them. With terminology, banks establish their rates, while also allowing a sense of control and removal by using terms and figures that are part of their protocol. While homeowners know what an APR rate is and understand the basic timeframe used for many mortgages; there are still a few terms worth mentioning.
The first is “Hidden Market”. A topic widely discussed here and elsewhere; the hidden market represents listings unavailable through traditional channels. While this often refers to real estate sales, it can also apply to mortgages. Any time you have a fixed financial transaction with “standard” pricing, there is the option for alternate sources and alternate pricing. With mortgages in Vancouver, this usually involves having an advocate or referral resource who is aware of trends in rate fulfillment. This means that while the APR rates and terms may be available, access to information on what is working for homeowners and what isn’t may not be. In these terms, accessing the hidden market can begin as simply as asking friends, family and trusted individuals about their experience. Study the ways that rates have changed. Note any new rules or restrictions placed by governmental bodies. And always ask: What does the bank stand to gain – and what do I?
Next: when finding the best rates, always calculate your finances twice. Make one set of spreadsheets for what you can comfortably potentially commit to, and another for a more ideal, lower rate. Begin examining these sets of information and considering how you would present both options when speaking with a lender. There is real leeway to be gained based on how you present your willingness to engage. The best rates may only appear once you’re confident enough to walk away from anything but a deal that’s better than you hoped for.
Competition is your ally. It’s a primary reason why even though Vancouver boasts such high household incomes, mortgages are relatively accessible. The market is steady for the time and lenders realize this and are competing in ways that you won’t find elsewhere. So watch percentages closely. Speak to a mortgage broker. Remember that their interests are more likely to align with yours – though a firm recommendation from a trusted person is a good way to find a broker who will work for you.Read More »