What is your BEST 5 year Rate?
November 15 2012 Posted by Mary Poburan
MONDAYS WITH MARY...
One of the most common questions I get is "what is your Best 5 year rate?" This is an almost impossible question to answer without knowing the complete details of a file. With access to over 20 lenders, not only do I have varied rates available but rates are now determined by a number of different variables. As a Broker it is my job to find the BEST rate available for each sp
ecific client. BEST is not a one size fits all solution in the mortgage world.Here are some of the ways that Pricing is determined:
1) Is the mortgage insured? Believe it or not the trend is to offer BETTER rates to mortgages that are insured(less than 20% down). Insured mortgages provide security to investors so they pass on a lower rate to the client for the reduced risk factor.
2) When is the mortgage closing? Rates are hedged by lenders so the shorter the period of time that they ave to hold a rate, the better they can predict profitability. you will get better rates for mortgages closing within 30-45 days.
3) Is it a primary residence or an investment property? Some lenders charge a premium for mortgages held on properties that are NOT a primary residence. The standard is usually 20 basis points above the standard best rate.
4) How did you qualify? Best rates are given to clients who have qualified under standard verifiable means. We have some great lending programs in Canada but unfortunately if a concession is made for you based on being self employed or some other factor, you can expect a rate premium.
5) What is your credit like? Lenders vary on the type of files they will consider for approval. Depending on your credit score, only some lenders may be available to you. Even clients with decent credit may have to choose a lender with a higher rate. If your credit is poor, we may have to access "B" lenders whose BEST 5 year rate is well above the norm.
The way to ensure you have access to the BEST rates is to work with a professional, knowledgeable Broker who can guide you to the right Lender EVERY time.
1) Is the mortgage insured? Believe it or not the trend is to offer BETTER rates to mortgages that are insured(less than 20% down). Insured mortgages provide security to investors so they pass on a lower rate to the client for the reduced risk factor.
2) When is the mortgage closing? Rates are hedged by lenders so the shorter the period of time that they ave to hold a rate, the better they can predict profitability. you will get better rates for mortgages closing within 30-45 days.
3) Is it a primary residence or an investment property? Some lenders charge a premium for mortgages held on properties that are NOT a primary residence. The standard is usually 20 basis points above the standard best rate.
4) How did you qualify? Best rates are given to clients who have qualified under standard verifiable means. We have some great lending programs in Canada but unfortunately if a concession is made for you based on being self employed or some other factor, you can expect a rate premium.
5) What is your credit like? Lenders vary on the type of files they will consider for approval. Depending on your credit score, only some lenders may be available to you. Even clients with decent credit may have to choose a lender with a higher rate. If your credit is poor, we may have to access "B" lenders whose BEST 5 year rate is well above the norm.
The way to ensure you have access to the BEST rates is to work with a professional, knowledgeable Broker who can guide you to the right Lender EVERY time.
