Don’t get swamped
3 Mortgage traps, mortgage pitfalls, mortgage problems and how to avoid them
The mortgage trap: Panicking and accepting a high mortgage rate.
Be wary of banks that offer you an extremely low initial rate with a significant increase a year later. For a first time home buyer in Canada, the complexities of mortgages can be very overwhelming, and it can be easy to get locked into a mortgage without getting the best rate possible.
The solution: Talk to an independent mortgage specialist.
It’s important to give yourself the time to rationally consider whether what you’re getting is really the best mortgage rates in Canada. So before you jump on something that seems super low, such as the current mortgage rate, make sure you talk to an independent mortgage provider. They’ll be able to give you a clearer picture of what your savings could be and are able to tailor their advice to your unique situation.
The mortgage trap: Overstretching your finances.
This is especially easy to fall into with variable rate mortgages as their rates can go up and down with very little warning. Even with fixed rate mortgages, the stresses of a changing job environment or new family can affect your ability to pay your mortgage. While everyone wants to get the most spectacular house their budget can afford, being financially overstretched is a huge headache and can cause a lot of unnecessary stress.
The solution: Budget and use a mortgage calculator.
Take the time to draw up a well-thought-out budget. Be honest with your incoming and outgoing expenses and also consider any major life events that you could expect in the next five to ten years. Afterwards, you can use an online mortgage payment calculator to discover what monthly payment you’d be able to afford. Try it out with a few scenarios too such as having a new baby or new car. If you’re considering a variable rate mortgage, remember to also test how much more your payments would be should rates rise. Could you still afford payments if rates were to increase by 20%? 30%? Double? Once you’ve answered these questions, you’ll be able to confidently talk to your mortgage specialist and know that you’re getting a mortgage you can comfortably afford.
The mortgage trap: Not reading the fine print
It’s fair for your mortgage lender to charge a penalty if you break a fixed contract early. However, stay away from mortgages with penalties after the end of the fixed term (ie 5 years). Another pitfall you might encounter in the “fine print” is compulsory insurance. This involves the borrower charging a one-off fee if you don’t get insurance with them.
The solution: Carefully go over any penalties and additional costs with your mortgage provider.
When talking to your lender, make sure you discuss any questions and concerns you have with them. That way you won’t be surprised later on by hidden costs. For the most customized help and solutions, talk to an independent mortgage provider like Aleem at The Mortgage Specialist. Not only will you be able to get some of the best mortgage rates in Canada, you’ll also be able to get all your questions answered without having to worry about big banks’ weird hidden penalties and fees.
So what are you waiting for? Call or email Aleem today so you too can get started on your home ownership journey.
First Time Buyer Myths That First Time Home Buyers Should Ignore
First time home buyers are often intimidated by the home buying process, due largely to myths they have heard from others. Proper education is essential especially today when there are so many options and choices to make as a first time buyer. There are first time buyers who are even afraid to begin…
First Time Home Buyer Tips
Purchasing your first home is one of the biggest life decisions you will ever make and no doubt this can be a stressful time. It doesn’t have to be all stressful, however, as there are ways to help and you can even have some fun buying your first home. Here are some first time home buyer tips…
Mortgage Traps
3 Mortgage traps, mortgage pitfalls, mortgage problems and how to avoid them. The mortgage trap: Panicking and accepting a high mortgage rate. Be wary of banks that offer you an extremely low initial rate with a significant increase a year later. For a first time home buyer in Canada, the complexities of mortgages…
First Time Home Buyer Vancouver
First Time Home Buyer in Vancouver- helping your children buy. With the high cost of buying real estate in the lower mainland of BC, many parents feel obliged to help their children buy their first home. A question that we often get asked is “what is the best approach in helping our children buy their first home”…
Canada Mortgage Rates- a Handy Guide to cibc mortgage rates
The Rate Tango: Canada Mortgage Rates Variable vs Cibc Mortgage Rates Fixed. Become an expert on Canadian Mortgage Rates with our Handy Guide. Many first time home buyers are wondering whether they should take advantage of this low rate or if they should lock in the more secure fixed rate mortgages…
Five Home Buying Tips For Millennials
It’s the perfect time to move to Vancouver. The job market is stable, the economy is recovering, and the housing market continues to rise. Now is a perfect time for millennials to move from home or stop renting and consider purchasing a home. Here are some tips to consider…
If you would like more information or a free consultation contact Aleem below, and as a Certified Mortgage Specialist let me help you get the home of your dreams. Great Mortgages, Made Simple
