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Best Rates - what's in the fine print?
ADVICE Author: Caroline Lennox
Several lenders are lowering rates on 5 year fixed products and their is a lot of buzz.
This is great news for everyone. Still, don't be distracted by 'best rate' offers without asking more questions.
A "Best Rate" mortgage might not be the "Best Mortgage" for your situation.
The mortgage contract may have restrictive clauses, and limited pre-payment privileges* may be lower than another mortgage with a slightly higher rate.
What does the following clause mean to you?
If you saw it in a mortgage offer, what would you do?
"Full repayment before maturity can only occur if property is sold to an unrelated purchaser at fair market value...
...or if the mortgage is renewed or refinanced into another mortgage product with (same Lender)
Prepayment charges will apply."
Full repayment before 5 years is more restricted when such a clause exists in your mortgage contract.
The difference in payments between a less restrictive mortgage and one like the above may be minimal. The difference in pre-payment penalties could be significant.
Restrictive clauses may show up later in the mortgage application process, when you are feeling a lot of pressure to complete your application and meet a deadline. Stay calm!
When you buy a car, do you ask for the cheapest car on the lot, or do you look for a car that gives you what you need and want? Why should shopping for a mortgage be any different?
If it looks to good to be true...?
Call Caroline before you say yes to the bank.
It's rarely too late for a second opinion.
800-757-0412
250-415-9555 text for a call-back.
*eg: make a lump-sum payment each year, increase payment annually etc.
E & OE
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For illustration purposes only.
Contact Information | Invis - Canada's Mortgage Experts |
|
| Name: |
Caroline Lennox
|
| Company: | Invis - Canada's Mortgage Experts |
| City: | Victoria |
| Province: | British Columbia |
| Country: | Canada |
| Phone: | 800-757-0412 |
| Email: | |
| Website: | http://www.clmortgages.com |
