I am shopping around for a mortgage. What are the right questions should I ask? Notes: I will be talking to both banks and mortgage brokers.
Generally, ask each lender,
- What is the interest rate? What is the term?
- What fees do I have to pay?
- How can I save on interest charges? Can I make extra payments when I have money available? What options do I have?
- If I sell my house or property before the scheduled maturity date, will I have to pay a penalty? If so, how much will the penalty be?
- What options do I have if I want to pay my mortgage off early?
- If I sell my house or property, can I transfer the remaining amount of my mortgage and the terms to a new property without paying a penalty (portable mortgage)?
Here are some questions that you should ask yourself before you get a mortgage.
- How much can I afford to borrow? FCAC has an interactive Mortgage Qualifier Tool that can help you figure out how much you qualify to borrow. Remember that this is a maximum, and consider leaving a cushion in your budget so you are not stretched to the limit.
- How much will I have for a down payment?
- How much of an increase in my mortgage payments will I be able to afford if interest rates go up?
- Have I shopped around to find the best combination of interest rate and features for my needs?
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