HOW TO GET THE BEST MORTGAGE RATE
Just like any other shopping, finding the best mortgage rate for yourself in Surrey or Vancouver or for that matter anywhere in BC, Canada, takes shopping skills, good judgment, time, and tenacity.
First thing is to determine whether you qualify for a Bank Mortgage, Alt-A Mortgage, or a Private Mortgage.
To qualify for a Bank/Residential/Conventional mortgage, you must have excellent credit, verifiable down payment already in your bank for the last three months, one month’s payslips, letter of employment, last two year T1’s and T4’s, NOA, and anything else that the bank requires. Your debt ratios must be lower than the maximum allowed by the bank.
The first step is to talk to your bank. You can tell the mortgage advisor to look at your income, down payment (if it is for purchase), mortgage amount needed, your monthly obligations, etc. The mortgage advisor can tell you, without pulling your credit report, if you qualify.
If the mortgage advisor at the bank tells you that you do qualify and gives you the mortgage rate and terms, then you can get a second quote from a mortgage broker. If the bank officer declines your mortgage, then again you need to talk to a mortgage broker.
Mortgage brokers deal with the wholesale division of the bank. Because mortgage brokers provide a constant flow of new, totally processed and underwritten mortgages to the banks, the banks give a discount on those mortgages. That’s why a mortgage broker’s rate quote is mostly a bit lower than the rate quoted by a bank.
So, now you go to a mortgage broker. You provide him with an application that you made it yourself on a word file or the one you filled out for the bank. Ask him to give you a rate based on all the numbers and facts you have given him.
If you get a better rate and terms, go with the mortgage broker.
If the bank declined your mortgage and the broker has also declined your bank or conventional mortgage. Then the broker will recommend an ALT-A mortgage. Get a quote for that and call two more mortgage brokers and see how you like them and get a rate quote. All this without pulling your credit report.
If the mortgage broker cannot get you an ALT-A mortgage, then he will get you a private mortgage. Get a rate quote, fees, terms, monthly payments, etc. Do the same thing. Get two more quotes and also see who gives you straight answers and who you trust the most.
Once you select the mortgage advisor you are going with, sign the consent for him to pull your credit report and move forward.
You have done your due diligence and I am pretty sure you have secured the best mortgage rate you qualify for.
Jeet Singh is a writer and President of Benevolent Bancorp.