To get the most out of your first meeting with a mortgage broker, ask the following questions:
1. HOW MUCH CAN I AFFORD?
Usually, people pick their homes before they organize their financing, but it should be the other way around. Determine what monthly payment you would be comfortable with and what money you have available for a downpayment before delving into your house hunting. Your total debt load, including your home costs and other debts such as credit cards and car loans, shouldn’t exceed42-44% of your total income as an average benchmark.
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. A variable rate, however, will change according to market interest rates, which may cause concern for some.
3. HOW MUCH DO I NEED FOR ADOWN PAYMENT?
Many homebuyers assume they need to make a sizable down payment to get the best mortgage rate, but that’s not always 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.
4. WHAT SHOULD I TAKE INTO ACCOUNT FOR THE FUTURE?
According to research conducted by Genworth Canada, 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 realize that every individual has a unique situation. I will sit with you and go through all your possible options and outcomes to help you make an informed decision.