Purchasing a new home requires a lot of hard work and effort. Many of you will save your hard-earned money but sometimes it will not be enough to cover up for the price of the house you are eyeing to buy. But at least, you will be able to pay for the down payment if you have more than enough in your bank account. Nonetheless, the purchase comes with the need to avail a mortgage.
You just wish you will be able to get the best mortgage rate right away. Of course, you also want one that offers the lowest interest on the mortgage. However, it will really take time to spot the right mortgage lender for you. Consider the obstacles that make it difficult to avail the loan that you want so that it will be easier for you to conquer the hurdles of getting the best rate later on.
Rates vary from one location to another
In Canada alone, expect that rates vary from one province to another. In Ontario, for instance, you will find the most competitive rates in the market. Quebec, on the other hand, offers the best rates for a 10-year mortgage. If you are within Alberta, you will get the lowest rates possible only if you are willing to put more equity for the property. In the East Coast, you will pay rates higher than when you choose to purchase a home in Ontario.
You are looking to refinance an existing mortgage
This obstacle is quite reasonable considering that refinancing will offer higher rates on the mortgage instead of lowering down your burden. New buyers will definitely enjoy lower interest rates than you do. But of course, if you are considering between getting mortgage refinance and mortgage transfer, refinancing is a better option since it will cost you less than the other option.
You are purchasing higher-risk properties
Lenders know if a property is high risk or not. High-rise condos, hotel condos, cottages and larger multiunit residences are amongst those properties that they consider classifying as higher risk. When this is the case, expect that you will not get the low mortgage rate that you want to be able to get the amount of money that you want for financing the purchase.
You are purchasing a property for temporary use
Meaning to say, you will not be dwelling on the property full-time as you would with your residence. When investors find this one out, they can classify you as a high-risk borrower. As such, they will give you a higher mortgage rate instead.
You have a low credit score
Every lender will consider your credit score before actually lending you the money that you need. In Canada, the minimum credit score is 680. If you go lower than that, do not expect to get the best rate. Add to this number, you must also manage your credit for two years, making sure that you are not running delinquent with your existing loans, no matter how big or small the amount of that loan is.
You are eyeing for a huge amount of loan
Whilst lenders are ready to provide the amount of loan that you need as long as they have done the necessary background check, do not expect low rates on a huge amount of loan. The bigger the loan, the higher the risk they will take. With that, they may even require you up to 35% down payment.
These are but just some of the obstacles you will encounter when you are eyeing for the best mortgage rates in Canada. If you want to find out how you can avail of low mortgage rates in Quebec, we are willing to extend a hand.