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Tips for Finding the Lowest Mortgage Rates in Montreal

Dec 6, 2019by adminFinancing, Mortgage Rates

A home is probably the biggest and most emotional purchase you will ever make. Given the importance of this significant investment, home purchase can’t be taken lightly. You have to consider several crucial factors before you undertake this huge financial obligation. And the most important consideration in this regard is weighing the different financing options available.

For most people, taking a mortgage is the only way to fulfill their dream of homeownership. This is because a majority of people don’t have the required amount of liquid cash available to buy a house. But in the excitement of buying a home, many people undermine the importance of shopping for the best mortgage. But if you require a mortgage to fund your home purchase, it’s imperative to shop around. This will help in securing a mortgage with rates and terms that will meet your needs.

Before you start finding the best mortgage deal, you need to understand a few things. It is important to get a basic understanding of three terms: credit score, debt-to-income ratio, and your assets. Mortgage rates and terms largely depend on factors like the lending institution, your credit score, the type of loan you take, and the amount of your down payment.

Over the years, the finance industry has progressed significantly. With technological developments, now the process of finding the best mortgage rates can be done online with the help of useful mortgage calculator tools. You can speak to your mortgage broker or visit their website to know the current mortgage rates in Montreal. A mortgage agent can better help you in understanding the mortgage market in your area, available mortgage types, terms, and rates. An experienced mortgage broker in Montreal can also explain what influences interest rates and suggest the best ways to obtain the lowest mortgage rates.

The ultimate goal of every borrower is to get an affordable monthly payment and save interest amount charges over the life of the loan. To achieve this goal, here are some tips to push your mortgage rates lower.

Improve Your Credit Scores

A credit score that determines a person’s ability to repay the debt can make a big difference in your mortgage rates. Lenders use your three-digit credit score as a benchmark in deciding your mortgage rate. This score actually reveals your ability to repay the debt on time which helps in lowering the interest rate offered. When your credit score is higher, you qualify for the lower mortgage rate. Ideally, credit scores of 760 or above qualify for the best mortgage rates. So, if your credit score is poor, you should try to improve it by eliminating your credit card balances. You should pay bills on time, paying off loans and past-due collection accounts before applying for a mortgage.

Maintain Employment Stability

Lenders give preference to those borrowers who have at least two years of steady employment and earnings, preferably from the same employer. If you’re unemployed for a long time or you’re self-employed, it can be difficult to qualify for a mortgage. Some lenders even reject the application on the basis of earning coming from multiple part-time jobs. If you’re self-employed, you’ll need to show your income tax return documents for the past two years. So, before you apply for a loan, make sure you have proof of steady employment and income.

Increase Your Down Payment

By increasing the amount of your down payment, you can obtain a lower mortgage rate. Typically, a minimum down payment of 20% of the purchase price of your home can help in securing the best mortgage rates. Even if you don’t have enough liquid cash to fund a 20 percent down payment, you’re still eligible to get a mortgage. However, paying less than 20 percent means paying .05 percent to 1 percent private mortgage insurance on the original loan amount annually.

Shop Around

As a smart homebuyer, you should always shop around for the best mortgage rate possible. When you visit multiple lenders, it becomes easy to compare the different options available. However, contacting different lenders and researching all available options can be overwhelming. So, it’s best to work with a mortgage agent when searching for the best rate. Even if you’re considering mortgage refinance, a broker can do the necessary research to make sure you’re getting the best fit for your situation.

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