Getting multiple Mortgage Rate Quotes

[Ahuch]

Originally Posted by daredevil

Just my two cents... Sometimes brokers will get you the best rate, but don't always place you in the best product given your individual situation.

Make sure you are careful analyzing all the "features" of the product.

Don't get stuck in a no frills product in case you are pretty confident you will be remaining in it for the whole term.

Also, not saying all brokers are like this, but some are more concerned about making their sale and commission and less about helping you. It's easy to default to best rate...but doesn't always mean it's the best fit.

Nailed it. Rate is important but it's not the only consideration!

[Street Pharmacist]

I'm going to likely be upgrading in 5 to 6 months.

2 questions:
1) What type of mortgage should I get? I'd like to go 5 year closed I think as I'll be in this place for at least 5 years. Is there any advantages to go live or shorter?
2) from a real estate perspective, am I smarter to pick a different time? I'm not too picky about when, just want the right house and would like to wait until my wife graduates university

[FlamesPuck12]

Originally Posted by Kavvy

Thank you all.

So dumb question, why can't I just go to a broker and a bank and say - don't poll my credit. Assume I have good credit and give me a rate. The rate would be dependent on my credit being what I say it is.

After I am done shopping around, I pick a rate, they check my credit, if it agrees to what I said it was, I hold them to that rate.

That's probably not necessary. Credit inquiries do affect your score for couple months and then they fall off your report in about 2 years.

Multiple credit inquiries for a credit card hurts your score but for mortgage or auto loans, they usually bundle it up as one credit inquiry if it's within short period of time to consider for rate shopping.

http://blog.equifax.com/credit/will-...-credit-score/

[macker]

http://www.ratebot.ca/

[MillerTime GFG]

Originally Posted by daredevil

Just my two cents... Sometimes brokers will get you the best rate, but don't always place you in the best product given your individual situation.

Make sure you are careful analyzing all the "features" of the product.

Don't get stuck in a no frills product in case you are pretty confident you will be remaining in it for the whole term.

Also, not saying all brokers are like this, but some are more concerned about making their sale and commission and less about helping you. It's easy to default to best rate...but doesn't always mean it's the best fit.

Well said. Those low rates you find out there, no matter who with, come with restrictions. These low rate products are designed for those that are guaranteed to be staying with that lender for the full term, otherwise they'll be charged a steep penalty. Essentially the investors are saying "I'm going to offer this great low rate, but I want to be guaranteed on my return".

I ALWAYS show my clients multiple options and make sure they're aware of any restrictions, and what the payout penalties are on all products. I find more often than not clients will take the slightly higher rate because of the added flexibility. I'm a huge believer in flexibility myself as well.

[FlamesAddiction]

Originally Posted by MillerTime GFG

Well said. Those low rates you find out there, no matter who with, come with restrictions. These low rate products are designed for those that are guaranteed to be staying with that lender for the full term, otherwise they'll be charged a steep penalty. Essentially the investors are saying "I'm going to offer this great low rate, but I want to be guaranteed on my return".

I ALWAYS show my clients multiple options and make sure they're aware of any restrictions, and what the payout penalties are on all products. I find more often than not clients will take the slightly higher rate because of the added flexibility. I'm a huge believer in flexibility myself as well.

Although in our case, we got a lower rate and more flexibility in how much we are allowed to pay extra each year into our mortgage than what they banks would allow. That second part was the real deal sealer for us.

[MillerTime GFG]

Originally Posted by FlamesAddiction

Although in our case, we got a lower rate and more flexibility in how much we are allowed to pay extra each year into our mortgage than what they banks would allow. That second part was the real deal sealer for us.

Yep, the lowest rate I have access to also has great pre-payment privileges...20% lump sum/annum & 20% increase in payment/annum.

The penalty for breaking the mortgage early is 3% of your mortgage balance. If you return to that same lender within 60 days (might be 30), they will "normalize" the penalty, by reducing it to a standard IRD/3 month's interest charge. That's the part that people really need to be aware of.

[Schraderbrau]

Originally Posted by Street Pharmacist

I'm going to likely be upgrading in 5 to 6 months.

2 questions:
1) What type of mortgage should I get? I'd like to go 5 year closed I think as I'll be in this place for at least 5 years. Is there any advantages to go live or shorter?
2) from a real estate perspective, am I smarter to pick a different time? I'm not too picky about when, just want the right house and would like to wait until my wife graduates university

1. I am a person who like to be secure so I have always locked in to avoid taking the chance on a sudden rate hike, though I don't think that is likely right now at rates of under 3% I still say lock in for as long as you think you can. I am getting a new mortgage right away and I plan to lock it down.

2. It is hard to say, selling right now could be a killer for you. I am selling as we speak and I anticipate a 5% loss based on what several realtors figured my house was worth in November. That loss is all due to the decline in oil prices and the panic that has set in (though I think this will be short lived, 2 years at worst). This oil decline is going to hurt house prices for sellers. On the flip side if you are buying this could be a great chance to get a good deal on a house in Calgary.

The other thing I am not sure of for time line is, does PST affect the purchase of a new home? I know we pay GST on a new home, would PST also be an additional hit? Just asking as I know it is coming up a lot in the news for Alberta.

[OMG!WTF!]

I think historically (not just the last five years) floating rates have done much better than fixed rates. I've never lost with a floating rate. And there is usually an option to fix your rate at any time. A good broker will advize you on that. But why pay more at the beginning so that you might not have to pay more later?

Another consideration is that mortgage rates are usually lowest around a federal election. Ours is likely this year, US election in 2016.

[Rerun]

I would go with a broker. It doesn't cost you any more by using a broker and you are more likely to get the best rate possible and the best mortgage terms that fit your needs, than by going the do-it-yourself route. If you aren't an expert in this field, use someone who is.

As an aside, I just renewed my mortgage last August. I used a broker and ended up getting a mortgage with a mortgage finance company (First National). The rate I got was very competitive and the type of mortage I got suited my needs and requirements. Previous to that I had a mortgage with the Bank of Nova Scotia. Even though my mortgage was coming due, I never heard a peep from them until the 11th hour so to speak. By then it was too late, as far as I was concerned as I had already gotten the ball rolling with a broker. The rate that the bank quoted me was laughable. It was almost 1% higher than my previous rate with them (and I have excellent credit) whereas my rate through the broker was 0.8% lower than my current mortgage rate (both rates were fixed, mortgage terms were equal, and both were closed) and it also had the benefit of being a portable mortgage.

The neglectful treatment by the bank left a bit of a sour taste in my mouth and I also felt they were trying to screw me a bit by hoping I wouldn't do any due diligence and just sign on the dotted line (I have been a faithful customer of theirs for many many years).

[Winsor_Pilates]

Originally Posted by Street Pharmacist

I'm going to likely be upgrading in 5 to 6 months.

2 questions:
1) What type of mortgage should I get? I'd like to go 5 year closed I think as I'll be in this place for at least 5 years. Is there any advantages to go live or shorter?
2) from a real estate perspective, am I smarter to pick a different time? I'm not too picky about when, just want the right house and would like to wait until my wife graduates university

Find out what your penalties might be if you try to get out of the mortgage early.
If you take on a 5 year and decide to sell your home in 3, will you be facing a large penalty for breaking out early? Will you be porting the mortgage over to a new place?

With rates so low, a lot of people are facing interest rate differential (IRD)penalties right now which can be 10's of thousands if you get out early.
I just sold/bought a new place and would have had a $12,000 penalty had I not ported my mortgage over to the new place. Had I been moving away from the country or something like that, it would have been a big issue.

My bank also gave me 120 days to port, where a lot will give you 60 or even less. Take things like this into account as well when choosing the mortgage that's right for you.

[Drury18]

Do renewal mortgage rate quotes have the same rate hold policy as new mortgage rates?

I know I'm going to have to do some looking near the end of this year as mine is up for renewal in Mar 2016 and I was curious how early I could look for and agree to the rate WITHOUT paying any early penalty fees. (This is my first time having to renew a mortgage)

When I got my initial one, I had a pre-approval and got a rate and it was protected for 4 months and lucky for me, was lower then the current rates when I completed the house purchase. If say in December 2015 the rates plummet, can I go sign and agree to a rate to start in March 2016? Does it work like the pre-approval with my broker where if the rate drops/rises between agreed date and start of mortgage, I will get the better rate?

[Kavvy]

Hey, thanks all for those who replied to my questions, and for those asking other questions, very good stuff!

Thanks also for the couple PM's, appreciated the reaching out, sorry I haven't replied yet.

[MillerTime GFG]

Originally Posted by Drury18

Do renewal mortgage rate quotes have the same rate hold policy as new mortgage rates?

If you select an option for your renewal with your lender, that rate will be guaranteed until the renewal date, as long as you sign.

I know I'm going to have to do some looking near the end of this year as mine is up for renewal in Mar 2016 and I was curious how early I could look for and agree to the rate WITHOUT paying any early penalty fees. (This is my first time having to renew a mortgage)

By selecting what rate/term you'd like upon renewal, it just allows your lender to automatically roll you into said rate/term on the renewal date. There would be no penalties incurred. I encourage you to look at your options at renewal though, as this is your once chance to shop around, and lenders are banking (pun intended) on the fact that you won't do your due-diligence and select one of their usually bogus renewal rates.

If say in December 2015 the rates plummet, can I go sign and agree to a rate to start in March 2016? Does it work like the pre-approval with my broker where if the rate drops/rises between agreed date and start of mortgage, I will get the better rate?

All lenders are different in this area. What you're referring to is called a "float-down". Some lenders will automatically reduce your rate if rates go down during your rate hold period, some don't allow it, and some will do it but only at the broker's request. This is why it's important for brokers to not let their clients' files collect dust once the approval is in place. It's important to continue monitoring rates at all times.

[GP_Matt]

Originally Posted by MillerTime GFG

Yep, the lowest rate I have access to also has great pre-payment privileges...20% lump sum/annum & 20% increase in payment/annum.

The penalty for breaking the mortgage early is 3% of your mortgage balance. If you return to that same lender within 60 days (might be 30), they will "normalize" the penalty, by reducing it to a standard IRD/3 month's interest charge. That's the part that people really need to be aware of.

My concern with those high penalties is what position it puts you in when you renegotiate. They know that if you don't sign your new mortgage with them you will owe 12 months interest penalty so why would they offer you a good rate?

[MillerTime GFG]

Originally Posted by GP_Matt

My concern with those high penalties is what position it puts you in when you renegotiate. They know that if you don't sign your new mortgage with them you will owe 12 months interest penalty so why would they offer you a good rate?

I would leverage a broker at that point, as they'll know what that lender's current rates are when you're negotiating. I can tell you that the product I'm speaking of was a massive success for them last year, and also that this lender is 100% broker driven. They'd be foolish to gouge clients on the back end, as they know word spreads quickly. I myself have completely abandoned one of my lenders because of a similar situation and I know many brokers have done the same. A bad lender looks bad on us, and we cannot afford that.

EDIT: I should point out that the aforementioned abandonment of the lender was not due to gouging. It was because of their retention teams on the back end bending over backwards to steal clients from brokers.

[Mortgage Made Easy]

This is a great thread. MillerTime GFG has covered off quite a few topics and I thought I would add my 2 cents.

Not all banks, brokers, bank representatives are created equal. There are a lot of good bank reps and brokers in the industry and some not so good ones! Same goes for Realtors and any profession!

What is important is to find someone you trust and listens to your current and future needs and presents options and solutions!

NOT all rates are created equal! I am so happy to see some comments on this thread that the lowest rate is not the end all be all. Online shopping for rates is not always good either. The lowest rate will get you to call or submit an enquiry... which is why advertising the lowest rate usually gets the phone call.

For the initial comment about enquiring with multiple banks and or brokers. Most banks will not present their best offer unless they have done a credit check... using multiple brokers should not make a difference unless you are not comfortable with the 1st one.

A broker should be discussing the options, products, rates, the conditions or restrictions up front... based on information provided.

[Mortgage Made Easy]

Originally Posted by Street Pharmacist

I'm going to likely be upgrading in 5 to 6 months.

2 questions:
1) What type of mortgage should I get? I'd like to go 5 year closed I think as I'll be in this place for at least 5 years. Is there any advantages to go live or shorter?
2) from a real estate perspective, am I smarter to pick a different time? I'm not too picky about when, just want the right house and would like to wait until my wife graduates university

Its not a simple you should or shouldn't. Majority of mortgage are on 5 year terms due to qualifying factors. If you take a term less than 5 years or a variable, you must qualify with the Bank of Canada rate which is 4.79%.

Its important to know what your plans are, when does your wife graduate, life style, and more. Choosing the right lender, term, rate... overall solution will ensure you are prepared for the changes in 5 years or before.

Sorry to be vague... its a personal preference / decision.