A mortgage is a large investment and one that you will be paying off for years to come. With such a big commitment, it’s important to make sure you are getting the best deal possible. Here are a few tips on how to avoid paying too much for your mortgage using cibc mortgage penalty calculator.
- Know your credit score: Before you even start shopping for a mortgage, pull your credit score so you know what kind of interest rate to expect. The higher your credit score, the lower your interest rate will be. If you have a low credit score, work on paying down debt and building up your credit history before applying for a mortgage. There are a lot of different ways to get a mortgage, so don’t automatically go with the first offer you get.
- Shop around for the best interest rate: Once you know what kind of interest rate you qualify for, shop around for the best rate. Interest rates such as bmo mortgages can vary widely from lender to lender, so it pays to compare offers. Keep in mind that the lowest interest rate isn’t always the best deal. Some lenders may offer a low-interest rate but charge higher fees. Be sure to compare both the interest rate and the fees before making a decision. There are multiple website that allow you to compare offers from different lenders.
- Get pre-approved: Getting pre-approved for a mortgage gives you a clear idea of how much home you can afford and strengthens your negotiating position when it comes time to make an offer on a home. When getting pre-approved, be sure to review the loan estimate carefully so there are no surprises later on.
- Review the loan estimate: Once you have been pre-approved for a mortgage, the lender is required by law to give you a loan estimate within three days of receiving your application. This document itemizes all of the fees associated with getting a mortgage as well as give you an estimate of your monthly payment and how much interest you will pay over the life of the loan. Carefully review this document, so there are no surprises later on down the road. If anything looks unfamiliar or unclear, be sure to ask questions until it makes sense. You can get the document reviewed by a professional like a lawyer or accountant to get a second set of eyes on it.
- Avoid surprise features: Some lenders may try to add extra features that increase the cost of your loan without adding any real value. For example, they may try to sell you “credit insurance” or “debt protection,” which is basically just expensive life insurance that pays off your mortgage if something happens to you. While this may seem like peace of mind, it’s usually not worth the price tag, and there are cheaper ways to insure yourself against these types of risks.
Conclusion
A mortgage is a big financial commitment, and it’s important to make sure you are getting the best deal possible by shopping around and knowing what terms to look for. By following these tips, you can avoid paying too much for your mortgage while still getting the home of your dreams!