If you’re ready to begin the search for your perfect Shuswap property, the first step is to make sure you’ve obtained a mortgage pre-approval, so you have a realistic budget on hand to base your search off of and the ability to move quickly with an offer. Without diving too deep into the mortgage approval process itself, I will offer a few questions you can ask to ensure you’re doing your due diligence before signing on the dotted line.
Should I work with a mortgage broker or lender?
A mortgage broker is a licensed professional who has access to a variety of lenders. This means they’ll be able to shop the current market for you and negotiate the best mortgage for your individual needs. Alternatively, mortgage lenders work only with a specific bank or financial institution, which may benefit you if you’d like to work with a branch or location that you know and trust.
How much should my down payment be?
Contrary to popular belief, you don’t necessarily need a 20% down payment to purchase real estate. For many home purchases, the minimum down payment is 5% and your mortgage professional can help you determine the best plan of action for your unique circumstance. Be aware that if your down payment is less than 20%, you will be subject to default insurance fees.
Should I secure a fixed or variable loan?
Historically, variable interest rate mortgages have been lower than fixed rates. But as we’re experiencing a series of rate changes, you’ll want to thoroughly review all of your options.
Does a mortgage broker cost me anything?
Most often, there is no fee for you to use the services of a mortgage broker, as the broker gets paid by the lender or financial institution. However, you will still want to ask this question, just to make sure there is no other arrangement you would be responsible for paying.
What are pre-payment penalties?
Each mortgage and financial institution is unique, and the terms of the agreement may state that you can only make a certain amount of additional payments on your mortgage, so make sure you read all the fine print and ask your mortgage professional any additional questions that you need clarity on.
Once your pre-approval is in hand, we can begin the journey of finding you the home that checks all the boxes on your list of must-have features! Connect with me if you’d like a referral to a trusted local mortgage pro!