If it’s your first time meeting with a mortgage broker, you want to come prepared to ensure you get the most out of that time. Here are some great questions to ask during your first meeting with a mortgage broker.
1. How Much Can I Afford?
Usually, people pick their homes before they organize their mortgage financing, but it should be the other way around. First you need to determine what monthly payment you would be comfortable with and what money you have available for a down payment, then you can dive into house hunting. Your total debt load, including your home costs and other debts such as credit cards and car loans, shouldn’t exceed a certain percentage. The best way to determine what you can afford is to talk to a mortgage broker and complete a mortgage application.
You can also try my mortgage affordability calculator!
2. What Type of Mortgage should I consider?
Are you someone who likes a predictable payment or are you comfortable taking some risk to get a lower rate? A fixed interest rate is set when you sign for the mortgage; it won’t change for the entire term you have chosen, for example a 5 year term. A variable rate, however, will change according to market interest rates, which may cause concern for some.
3. How much do i need for downpayment?
Many homebuyers assume they need to make a sizable down payment to get the best mortgage rate, but that’s not actually the case. Mortgage insurance products allow buyers to put as little as 5% down and still get the same competitive mortgage rates, if not better, than those who put down 20% or more. Having mortgage default insurance lowers the lender’s risk and cost and can mean a lower interest rate for the borrower. To see how much you quality for, use my mortgage qualification calculator!
4. What should I take into account for the future?
According to research conducted by Sagen, one of the three default mortgage insurers, roughly 70% of Canadians would be concerned about paying their mortgage if interest rates were to rise, or if they or their partner lost their job. Everyone is excited about buying a beautiful home, but not everyone is thinking about what that means in the long term. What you can afford today might not be the most practical choice in years to come. Will you still be able to make payments when you factor in the costs of parental leave and daycare? What if your job situation changes or interest rates rise?
I have been a mortgage broker in Red Deer for over 16 years and know that every individual has a unique situation and unique goals surrounding home ownership. I use my experience and knowledge to go through all your possible options and outcomes to help you make an informed decision on your mortgage.