Buying a home? We bet you want a low mortgage rate. Of course you do! Paying less in housing costs each and every month is the ideal situation that anyone would choose, and housing costs are arguably going to be the biggest expense in just about anyone’s life. After all, buying a home is one of the most expensive purchases most people will ever make.The median home value in the last year is around $231,000 and most people don’t have that kind of cash sitting in the bank, which necessitates mortgage loans as a necessary part of buying a home. When you sign your mortgage agreement, you’re voluntarily submitting to the terms it outlines in full – including your mortgage rate, which determines how much you’ll pay each month in housing costs.You want these costs to be as low as possible – The mortgage rate, type of mortgage, and length of time you have to repay the mortgage can make a huge difference in how long you are making monthly payments. Even lowering your rate by one percent can save you thousands of dollars in interest over the life of your loan. Sound like something you want to do? Of course it does!But how can you ensure that your mortgage rate is lower than average? Is there anything at all you can do to have any effect on this? What steps should you take to make sure your monthly housing costs are not overwhelming on your finances? We’ll dive deeper into these questions here. This is how you can get the best mortgage rate of everyone that you know!Improve Your Credit ScoreThis is, arguably, in almost every “how to get a mortgage” article on the internet, and for good reason. Your credit score is one of the most important factors as far as your mortgage rate goes. It can mean the difference between getting a low rate or a high one from the very beginning. Lenders use credit scores, first and foremost, as a benchmark in deciding a potential home buyer’s ability to repay the debt of their mortgage loan. If their credit score is high, it signifies to the lender that the potential home buyer is responsible financially, and they’re more likely to have their loan application approved – and offered better rates.Improve Your Employment HistoryIf you want a lower mortgage rate, you should also look into improving your employment history. It plays into the same kind of idea as improving your credit score. Think of it from the point of view of a lender. Someone who has stayed with their job for a very long time is likely more responsible than someone who jumps from job to job every few months. You’re more likely to be offered a reasonable mortgage rate if you’re an employee, too. Those who are self-employed or work as freelancers or independent contractors are considered a higher risk than those who are employed by a company. It can also be more difficult to qualify yourself as a lower risk home buyer if you have multiple part time jobs instead of one full time job. If you are planning to buy a house soon and willing to upgrade your employment in order to get a better rate, now is certainly the time to start that process!Save Up For the Down PaymentYes, even this makes a difference in your mortgage rate. The more money you put down, the lower your mortgage payment has the likelihood to be. If you have enough money on hand to fund a 20% down payment, you should absolutely budget that money to do just that. Lenders do accept down payments lower than 20%, of course, but we’re talking mortgage rates, here. The sooner you can pay down your mortgage to less than 80 percent of the total value of the home (the principal), the sooner you can get rid of mortgage insurance, which reduces your monthly bill. Also, having saved up for a larger down payment than others is yet another way to prove to your lender that you are certainly going to be a responsible home owner!Consider an ARM (Adjustable Rate Mortgage)Yes, you’ve heard all about Adjustable Rate Mortgages… Their rates can change on a set schedule, opposite from a fixed rate mortgage, which guarantees the same monthly rate throughout the life of the loan. Wouldn’t this be a bad route if you want a lower mortgage rate? Not always. It might save you money if you lock in a lower rate for a shorter period of time, such a s five or ten years. Adjustable Rate Mortgages are a financial tool that can be extremely beneficial for some. If you know that the home you are about to buy is not your “forever” home, you can lock in a low rate for a few years and then simply move when those years are up. Typically, Adjustable Rate Mortgages offer lower rates than Fixed Rate Mortgages generally do, so it’s certainly a route to investigate, but remember, it’s not right for everyone. Make sure you do your research and confirm that this type of mortgage is right for your finances before you commit to it.Shop Among Multiple LendersWhen you’re searching for the best mortgage rate, you want to shop lenders, too. Two lenders very rarely offer the same rate, so there could always be someone offering the same loan with cheaper interest rates. You absolutely must do the necessary research to make sure that you’re getting the best fit for your financial situation. Don’t speak to your personal bank and assume that their offer is the best you’re going to get just because you have been their customer for a long time. Make sure you talk to independent lenders and other lending institutions as well. Shop and compare the loan estimates you receive to work out where you can get the best deal in general. Of course, things can change depending on your financial situation and other personal details, but typically the mortgage lender who offers the best rates on day one still has the best rate for you on closing day. It’s just how it works!Aim for Fifteen Year Fixed RateYes, the most common loan type is a 30 year fixed rate, but if your goal is lower mortgage rates, you must look into fifteen year fixed rate type mortgage loans. While it’s true that your monthly payments could be higher, if they are, it’s simply because the life of the loan is shorter and there is less time for you to pay off the same amount. However, in return for this, you will save thousands of dollars at minimum in interest, because you’re paying off the loan much faster. Generally, those who go with fifteen year fixed rate mortgages save around $100,000 more in interest costs than those who go with thirty year fixed rate mortgages. That’s a ton of money! The national average for a fifteen year fixed rate mortgage is 4.15 percent. This route may not be right for everyone, much like considering an adjustable rate mortgage, but if it’s right for you, it’s going to be hugely beneficial to your finances.Lock In Your RateThe closing process can take way longer than you thought it would. Sometimes it can take weeks, or, at worst, months. While this is not the usual experience of those buying a home, or even common place, it can happen. After you sign your home purchase agreement and you have secured your loan, make absolutely sure you ask your lender to lock in your rate. Sometimes there is a fee involved with doing this, but it is well worth it. The fee will pay for itself if rates rise – because your rate won’t budge one inch. You can typically lock in your promised mortgage rate for any amount of time, but the longer you ask for the rate to be locked in for, the more you’ll pay for the fee we mentioned. You must make sure that the cost of the fee does not outweigh the money you’ll save by locking in your rate, so be sure that you do a little research and forecasting for the near future of mortgage rates before you decide how long you wish to lock in your rate for.Ensuring that your mortgage rate is low is one of the best things you can do to ensure that your monthly home payments remain low and manageable over a long period of time. It can save you anywhere from a few thousand to a hundred thousand dollars over the life of your mortgage loan – and that’s unquestionably worth it. Taking these steps can be a great start to that process. Make sure the terms and conditions of your mortgage loan meet your needs and that you have set yourself up to ace the mortgage application process.
L’économie canadienne est sur le point de croître de nouveau, mais de manière très différente, selon le Rapport sur la politique monétaire publié récemment par la Banque du Canada. La Banque du Canada prévoit un renforcement modeste et progressif de la croissance économique mondiale. Encore une fois, le marché américain a une incidence sur la croissance au Canada. Même s’il existe une demande pour nos exportations, l’investissement dans le secteur résidentiel et dans le secteur du pétrole et du gaz naturel des États-Unis, qui constituent d’importantes sources de demande d’exportations canadiennes, a changé. L’activité économique a progressé à un rythme modéré à la fin de 2015 et au début de 2016. Même si l’on espérait le début d’une forte impulsion, celle-ci n’est jamais arrivée. La croissance devrait rester modeste au cours de l’année. Voilà qui n’est pas étonnant dans une année électorale.