It’s Time to Lock in Your Mortgage Rate
2021-02-23 | 12:11:29
If you are currently in the market to purchase a home, this is a good time to get a pre-approval, as there are some indications that rates may be rising due to increases in Canadian bond yields. With a pre-approval you can usually get the interest rate held for 120 days, and if you can close within this timeframe you can take advantage of the lower rate. There is also nothing to lose because if rates go down, you can still take advantage of them.
The potential of rising interest rates is not the only reason to get a mortgage pre-approval these days. With the limited supply of properties for sale on the market, there has been an incredibly high level of multiple offers on properties, especially homes in the lower price range in the GTA. If you are looking to purchase, you need to be able to go in with a non-conditional offer to compete, and knowing you can obtain the proper financing for the deal is paramount. In today’s competitive market knowing what the maximum amount you can borrow also helps to ensure that you know if you have room to move on your offer in the negotiation.
One misconception about getting a pre-approval is that it will lower your credit score if a credit check is undertaken. A single credit check or even a couple in 45 days for the same purpose, such as mortgage, should not impact your credit scores significantly. If you check your own credit (soft credit inquiry) it should not impact your score either. Credit scores get impacted negatively when there are a number of different hard credit inquiries done that may be for varying purposes, such as loans, credit cards, mortgages, etc. over a short period of time. For example, if someone has applied for multiple credit cards within a few months that could negatively impact their credit score for a period of time. That being said, it is good to monitor the number of credit inquiries, but this should not stop you from doing a mortgage pre-approval, as you will most likely only need to have your credit checked once with the application. Working with a mortgage agent that can secure the best mortgage options, allows them to pull the credit inquiry once, and then share it with which ever lender has the best mortgage solution for the client vs. the client directly going to a number of lenders and having each do a credit inquiry.
Working with a knowledgeable mortgage agent should also give you peace of mind because they will take the time to explain how to most effectively work with the lenders to get the best mortgage solution. When working with a singular lender, you do not have as many options to consider. One thing to always remember is that you should not only consider the interest rate, but you should consider the pre-payment privileges and penalties that are part of the contracted term.
The good news is applying for a pre-approval has never been easier. You can fill out the application online here, and I will follow up with any questions to ensure that we have all the correct information to make your pre-approval as simple as possible with the right lender for your needs.
For free mortgage and refinancing information and advice, call Shelley Middlebrook at 647-997-3866 or email me at shelley@rightpathmortgage.ca.
