| If you're renewing your mortgage or buying a new | | | | move first. Many non-bank lenders will take a |
| home, the answer to rising interest rates is to fight | | | | wait-and-see attitude -- this is how they book a lot of |
| back using every trick in the book. Five-year fixed | | | | their business. |
| mortgage rates recently hit a six-year high, and | | | | A mortgage broker shops the rate market for you to |
| variable-rate mortgages could start moving up as soon | | | | find lenders who are holding off on matching the banks |
| as January 1st. Housing prices are so high these days | | | | on the latest mortgage increase. Move quickly though |
| that even a quarter-point of extra interest could cost | | | | as the gap between the banks and their non-bank |
| you hundreds of dollars a year and possibly thousands | | | | competitors may not last more than a day or two. |
| over your mortgage term. | | | | 3. Shop for rates more carefully than you ever have |
| Avoiding the impact of rising rates altogether is pretty | | | | before. |
| much impossible. You can limit your exposure to a | | | | The range in mortgage rates between lenders these |
| surprising extent, however, by using these four simple | | | | days is incredible. In early November 2009 (at time of |
| strategies: | | | | writing), rates for five-year mortgages ranged as high |
| 1. If you face a renewal or are in the market for a new | | | | as 5.78% at some banks to as low as 4.45% at a |
| home in the months ahead, get a rate guarantee | | | | handful of non-bank lenders. It's possible for you to |
| immediately. | | | | rate-shop online to a certain degree; however, you |
| A rate guarantee locks in the best rate you're qualified | | | | may not qualify for those rates based on your |
| for right now for a pre-set period of time and protects | | | | personal income and credit history. Bear in mind that |
| you, no matter how much rates increase in the | | | | mortgage brokers have direct access to over 50 |
| meantime. Typically, a mortgage broker can hold an | | | | Canadian lenders, some of whom deal exclusively |
| interest rate for 90 to 120 days. | | | | through mortgage brokers. As a result, a mortgage |
| Given that more increases for fixed-rate mortgages | | | | broker can pre-qualify you and secure the best |
| are possible in the months ahead, it's a no-brainer | | | | discounted, no-haggle rate based on your personal |
| move to contact a mortgage broker and lock-in a rate. | | | | circumstances. |
| If you're planning to buy a new home, get a rate | | | | 4. Exploit other avenues for shaving your mortgage |
| commitment (also known as a pre-approval) even | | | | rate. |
| before you start looking. And, if your plans change for | | | | You may save further on your rate if you're willing to |
| any reason, it can easily be cancelled with no cost or | | | | have a rate guaranteed for less than the typical 90 to |
| obligation. | | | | 120 days. For example, a few lenders offer a |
| When renewing a mortgage, don't wait for the bank to | | | | quick-close five year fixed-rate, which is lower than |
| contact you with one of those perfunctory notices | | | | their standard rate, if the new mortgage funds within |
| sent by mail. If you do, you'll probably find that you | | | | 30 days. Additionally, there may be lender promotions |
| have only a short time until the renewal date and are | | | | available (typically, for a limited time only) that offer you |
| thereby hostage to the mortgage rates of the | | | | further rate discounts on one or more of their |
| moment. | | | | mortgage products. |
| Rate guarantees apply to fixed-rate mortgages. | | | | 5.Use the services of a mortgage consultant |
| Variable-rate mortgages are priced off the prime rate, | | | | If you try shopping on your own you will damage your |
| which in turn is pegged to the Bank of Canada's | | | | credit score. Every time you for a quote the lender will |
| overnight rate. The pertinent issues with a variable-rate | | | | make a credit bureau inquiry. Mortgage consultants |
| mortgage are the size of the discount off prime, and | | | | make one inquiry and can re-cycle your report |
| the size of the discount you get if you use your option | | | | showing it to multiple lenders. In addition, we know |
| to switch to a fixed-rate mortgage. | | | | which lenders are offering the best rates and terms |
| 2. Non-bank lenders are slower to raise rates. | | | | for your particular situation. |
| Whenever there's a rate increase, the banks usually | | | | |