While it’s important to do your research during the home-buying process, you can’t believe everything you hear. We listed a few popular mortgage myths and tell you what’s legit and what’s not.
“I don’t need a Mortgage Broker because I can be approved by a big Bank”
Anyone can go to a bank for their mortgage, the tricky part is sometimes you have to visit a few banks to ensure you’re getting the best rate offered. The Mortgage Broker path does it a little better; the Lenders we work with offer better mortgage features and often better interest rates. We have negotiating power with Lenders, because they compete to gain our business. We also have access to rate specials that may not necessarily be available to the public. All the Lenders are competing for a Broker’s attention by offering the best rates up front. This means one stop shopping. It also means you, as the client can sit back, relax and let your Broker do the work for you. Brokers offer you independent, objective mortgage advice. We are here to act in your best interest.
If you’re trying to save money, it’s better to rent
People often think that renting is less expensive than owning a home. The truth is, it’s almost always less expensive making a mortgage payment over a rent payment. Try it out for yourself by using our Mortgage Payment Calculator! When you rent, your landlord or building manager is responsible for maintenance, which can mean waiting around for someone else to fix your fridge or stove. Another important perk to owning a home is you get the opportunity to build some equity. When your lease is up on your apartment, you are free to leave... but all the money you paid for rent, is gone. Some might say you are throwing your hard-earned money away.
You should always pay your mortgage off as quickly as possible
It’s normal to assume you should pay off your mortgage as fast as possible, but there are other important things to do with your money. Rather than paying more into your mortgage to pay it off sooner, consider investing your extra money. The interest you earn on these investments might be higher than the interest you pay on your mortgage. Don’t forget to put money into that safety net savings account for surprise house fixes and unexpected situations.
“The fluctuating rates will make it harder to secure my pre-approval”
Not quite. When you receive your pre-approval, you are usually given a rate hold on your interest rate for up to 120 days. If interest rates increase within those 120 days, there is no need to worry – you are already locked in at the lower rate. If rates happen to decrease that time, your broker will take the necessary steps to secure the new, lower rate on your behalf.