5 Things To Consider Before Signing A Mortgage Contract
Once you hear your mortgage application has been approved, you will go through a wide range of emotions, from excitement to nervousness, and there's no doubt you'll have a lot on your mind that you have to do. As your Alberta mortgage brokers, we understand that you'll probably be in a hurry to get the papers signed and start moving in, but there are five things you should consider before signing a mortgage contract.
Penalties for Refinancing or Early Pay Offs
If you decide to pay off or refinance your mortgage early or even sell your home and move, you could face a penalty for breaking the mortgage early. You need to ask your mortgage broker how the penalty is calculated and if posted rates are used in the calculation. Getting the answer to that can save you thousands of dollars in the future.
It's Based on Collateral
Most people don't think to ask about what happens if their mortgage is registered as a collateral charge because they aren't aware that there are different ways banks register the mortgage on title. There are pros and cons to a collateral charge mortgage and you need to discuss these with your mortgage broker.
Moving into a New Home
Is the mortgage portable? In other words, if you sell this home and move into a new one, can you take the mortgage with you to avoid a penalty? Some mortgage products by the different lenders don't allow porting and require that you pay a penalty up front. Before you opt for a new home, you need to know how your lender operates.
What About Life Insurance?
While it might not seem important, understanding your life and disability insurance policy you take out with your bank or lender is critical if you chose to go that route. With most lending institutions, if you move your mortgage, your insurance gets canceled and you have to re-apply for life insurance with the new lender. No big deal, right? What if five or ten years from now your health takes a turn for the worst? You could be refused life insurance or the premium may be out of your price range. With Alberta mortgage brokers the insurance we offer is transferable to different lenders, so even if you switch lenders to get a better mortgage, you retain your insurance regardless of the lender.
Renewal in Progress
You need to find out if you will be offered the best possible rate from your lender when you renew your mortgage or if you will have to negotiate to get a good deal. Too often, people just sign, assuming they've been given the best rate and banks and other institutions sometimes take advantage of that. Qualified and experienced Alberta mortgage brokers will always make sure you have the best possible choices when the time comes to renew your mortgage.
At Dominion Lending Centres, we want you to get the best possible mortgage to suit your lifestyle because at the end of the day, whether you are buying a new home or refinancing your mortgage, it can be a stressful and challenging experience. Contact us today to talk to one of our Alberta mortgage brokers, who are happy to help you and answer any of your mortgage questions!Request Mortgage Info