Need to save money on your mortgage (hypoth
If you are looking at buying a home or refinancing your existing home, you have probably been having a lot of conversations about interest rates (taux hypothecaires). If you enjoy talking about interest rates, fine, go ahead. It's like talking about the weather: it won't change anything, but it gives you something to talk about.
The simple truth is that the variance in interest rates from one lending institution to another is so small that it will not make a big difference in the total cost of your mortgage.
(As a matter of fact, the difference is only about .06%, which is a saving of $41.12 per year on a $100,000 mortgage.
We all know by now that interest rates charged on mortgages (prêt hypothecaire) and all other types of loans are determined by credit ratings. Why, then, with all the discussion about credit ratings and credit scores, are we still so naïve as to believe that one banker will look at our credit rating and say 7%, and another will look at that same exact credit rating and say 6%? Credit ratings are based on the risk the bank faces when it lends you money (and, more importantly, the risk it faces about whether it will get paid back). There is a higher premium over their cost of funds if they risk that you will pay slowly or not at all, and a lower premium if you are a good risk. Consequently, the range of rates, based on the same type of credit rating, is very small. It hardly seems worth the trouble to save such a small amount, does it? Especially if you, like most people, scour the internet for hours to find out all of the rates that are being offered out there.
The only way to have substantial savings on your mortgage is to have an overall mortgage strategy. There are many types of home loans (hypothèque) being offered, and the combinations of benchmark rate used, terms of payment and duration of loan can have a great overall impact on the loan over time. This is what is more important to look at. Finding the mortgage professional who will discuss more than just the interest rate, but instead will understand the economic markets and examine your financial situation and longer term plans will yield much more savings on your mortgage. Choosing the right mortgage strategy can save you tens of thousands of dollars, as compared to the $40 cited above that can be saved on a lower interest rate.
This is not a difficult idea to understand, but with all the emphasis that lenders put on interest rates, it is a concept that can get lost in the shuffle. Quite simply, choosing the right mortgage strategy is the most critical mortgage (hypotheque) decision you can make, and finding a mortgage professional who can assist you with it is the first step.
If you want to really learn more about how this concept can be true, read the following website: Mortgage Intelligence - Hypothèques
Gregory writes articles for Informezvous.com - hypotheque and he is the owner of http://www.infohypothecaire.com/ - Pret hypothecaire. To have more information about mortgages, please visit one of his websites:
http://www.infohypothecaire.com
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