Finding the Best Mortgage Rates

Posted: 23 Nov 2010 04:15 AM PST

For most Canadians, shopping around for a mortgage is something that happens once every five years. This is the time to figure out if you can get a better mortgage rate, and lock in something new for another five years. But if you want to get the best possible mortgage rate, whether you are renewing, refinancing or buying a home, you will have to do a little legwork.

: Photo: Jeremy Brooks

First Things First: What’s Your Financial Situation?

Before you start shopping around for a mortgage rate, you will need know your own financial situation. Get a good handle on the following aspects of your finances before you start shopping around:

Income
Debt
Expenses
Credit History/Sco re

You should also have a general idea of what you can afford in a home, as well as how much you are planning to borrow. This will give you basic information that banks and mortgage brokers can use as they prepare a quote for you.

Before you start looking for a good mortgage rate, you need to make sure you are in a position to afford your mortgage. With a renewal or refinance, it is a little bit easier to know what you can afford — you are already making a payments! If you are buying a home, though, you will need to consider the costs of home ownership, and recognize that a home comes with costs beyond the mortgage. Make sure that you can afford the mortgage plus the added expenses that you will see. There are many online calculators that can give you an idea of what what kind of mortgage you can afford.

Shopping Around for the Best Mortgage Interest Rate

Once you know your financial situation, and once you have a pretty good idea of what you can afford, it is time to start shopping around. Be sure to familiarize yourself with the different mortgage options available, and get a general idea of the mortgage product that is most likely to benefit your individual situation. Then, once you have an idea of what you are looking for, it’s time to shop around.

You might want to start at your bank, and then compare what your bank is offering to what is being offered by other banks, and by what a mortgage broker is likely to get you. Make sure you get all offers in writing. Let banks and brokers know the basics of your situation, without filling out a full mortgage application. Instead, treat each lender or broker you speak with as if you are interviewing him or her. Find out how knowledgeable each is about mortgage products and services, and find out what sort of rate is available to you. You can try to ask for the best rate in some cases, although you may have to use the posted rate as a starting point for negotiating down.

Be sure you are comparing apples to apples throughout the process, and make sure that banks and brokers know that you are shopping around. You want them to offer their best possible mortgage rate, and you want to be able to make meaningful comparisons between that rate and what is being offered elsewhere.

In the end, what is offered to you will depend on your financial and credit situation, as well as market rates. But, by shopping around you can figure out what would work best for you.

Dollar Matters: Here Come the Holidays!

Posted: 22 Nov 2010 09:00 AM PST

In Canada, Thanksgiving is long over. However, in the U.S., Thanksgiving is this coming Friday Thursday. American Thanksgiving marks what many consider the “official” start to the holiday season. Especially when it comes to shopping — even though many retailers have been rolling out their special deals throughout November. In honor of the advent of the holiday season, here are some helpful reminders:

Saving Money This Thanksgiving

Financially Poor offers some insights into how Americans can save on Thanksgiving this year. File this one away, and use it again when you’re ready to save money on next year’s Thanksgiving.

ING Direct Black Friday and Cyber Monday Deals

Free From Broke writes about some great deals you can get at ING. Some interesting deals that could result in getting cash back on a transaction. You can check at ING for more possible deals.

4 Online Shopping Tricks to Cut Holiday Costs

Get ready for the shopping season armed with information about what you can do to save money when shopping online. Redeeming Riches offers practical tips.

How to Pick the Perfect Christmas Tree (In 3 Easy Steps)

Len Penzo offers some insight into picking a real Christmas tree. The chart offered is most helpful as you go on your quest. It can even help if, like me, you prefer a fake tree.

Five Great Gifts You Can Make For Under $5

Get started on Christmas gift giving with some help from these great do it yourself gifts at Generation X Finance. Awesome way to give something thoughtful and unique.

Reader Story: Inexpensive Gift Ideas for Christmas (and Beyond)

Get Rich Slowly provides some inexpensive gift ideas that can serve you well now, and even help you out all the year through.

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