A good friend of mine asked whether I knew how to get better mortgage rates. Here is what I did when I applied for mortgages.
I usually call couple of banks and couple of mortgage brokers and get a quote. I was up front and told them that I was shopping around. I don’t provide any personal details for them to make an application or do a credit check But give them the mortgage amount and ask what would be their best rate and terms of the mortgage (prepayment limits, penalty calculation for breaking the mortgage). There will be some who would say that they can’t give you exact without the application, I exclude them because there are plenty of choices in the market. I also read the forums to find more information.
Here are few tips I have found:
- You can get a mortgage even from a bank branch in a different town. When I bought my first home I found from my sister that a Scotia bank branch in different town was offering better rate. I spoke to the officer faxed application form and she sent the documents to a branch in my town to sign the documents.
- When I bought my current house, I found a broker who said he will the beat the rates offered by any other bank. But I made a better deal with him because my sister and I bought new houses at the same time. So I asked him to give better deal since he will be getting commissions on two mortgages. We both applied separately and got our approvals separately but we got better rate. So if you have a family member or friend looking for a mortgage at the same time you may be able to negotiate better rate with your mortgage broker.
- When it was time to renew the mortgage again, I found that I can actually have mortgage under the secured line of credit. That means no application, no discharge fee etc. I currently have my mortgage at TD bank under secured TD line of credit at 2.45 % even though my line of credit interest rate is prime+1%.
