Busted! Don’t Believe These Mortgage Myths!
If you’re considering purchasing a house or investing in real estate, chances are you need to obtain a mortgage to fulfill your dream. Your knowledge of the various mortgage products and lenders may be limited, which may make selecting the right option a little challenging.
To simplify the task, many people opt to work with professional mortgage brokers due to their experience and knowledge. Unfortunately, a lack of clarity and a couple of old wives’ tales have led to the perpetuation of misconceptions in the mortgage industry.
Influenced by the myths and misconceptions, homebuyers avoid seeking professional help and miss out on the many benefits that come along with a broker’s experience and network of lenders. To set the record straight and help you distinguish between fact and fiction, Keith Uthe Demystifying Mortgages has debunked three of the most widely believed myths about mortgages.
Myth 1: Mortgage brokers charge a hidden fee.
When you use a mortgage broker to work with A banks and mortgage lenders, you are not required to pay fees. On the other hand, if you need to borrow from the B or C mortgage markets, fees would apply. However, it is clearly disclosed to the client.
Myth 2: Mortgage brokers do not work with banks.
Mortgage brokers will conduct a lender search to find you a lender that will provide a mortgage product that is compatible with your needs. This is possible as they have access to both banks and monoline mortgage lenders. Monoline lenders often offer better interest rates and terms than banks, which is why mortgage brokers recommend them to their clients. Keep in mind that as mortgage brokers, we represent you - the client, not the lender in the mortgage transaction.
Myth 3: The lowest rate is the best mortgage.
A common mistake homebuyers make is to believe that obtaining a mortgage with a low-interest rate will ensure financial security. If you focus solely on the lowest interest rate, you will end up compromising other important factors that impact your mortgage. A low-interest rate comes with several consequences, such as:
a. High-interest rate differential penalties
b. Low prepayment privileges
c. Bona-fide sales clause
d. Collateral charge
e. No portability
f. Higher renewal rate
g. Investment transfer requirements
60% of people break their mortgage before it matures and end up paying thousands of dollars as a penalty. It is essential that you choose the right term of mortgage product even if it comes with a slightly higher interest rate to ensure financial freedom.
If you’re looking to steer clear of myths like these, reach out to Keith Uthe Demystifying Mortgages.
As a licensed mortgage broker and agent in Calgary, Alberta, I am passionate about helping homebuyers fulfill their dream of homeownership and living a life of abundance. I find mortgage solutions for my clients that ensure financial security and peace of mind. I offer my services to clients across Calgary, Red Deer, Lethbridge, Edmonton, and Medicine Hat in Alberta.