4 Mortgage Mistakes That Could Cost You Thousands

For most, a house is the biggest purchase they will ever make. And such a significant investment comes with a lot of responsibility. So, before you take out a mortgage for your property in Montreal, you should know a few things before making any decisions. 

Here are four mortgage mistakes that could cost you thousands of dollars:

#1: Not Shopping Around for the Best Mortgage Rate

Many accept the first mortgage rate offered without shopping around for a better deal on the market. But with so many lenders competing for business, it’s essential to look around and compare rates before making a decision.

A few percentage points may appear minor, but over the life of a 30-year mortgage, it can add up in extra interest. For example, on a mortgage of 250,000 Canadian dollars with an interest rate of 4%, you would pay about CA$179,000 in interest over the life of the loan. But if you could get a lower interest rate of 3%, you would save about CA$26,000 in interest over the life of the loan.

So, before you commit to a mortgage, compare rates from multiple lenders to ensure you’re getting the best deal possible.

#2: Not Getting Pre-Approved for a Mortgage

Many first-time home buyers get pre-qualified but not pre-approved for a mortgage. Pre-qualification is when a lender estimates how much you could borrow based on an initial assessment of your financial situation. But pre-approval is when a lender gives you a firm commitment to lend you a specific amount of money. 

Once pre-approved, you’ll know exactly how much money you have to work with and can start shopping for homes within your price range.

Not only will getting pre-approved help you save time and energy, but it will also give you an edge over other home buyers. 

#3: Not Finding a Local Mortgage Broker

When you’re ready to start looking for a mortgage, finding a local mortgage broker is crucial. Many national banks offer mortgages, but they may not be your best option. A local mortgage broker will better understand the Montreal market and help you find the right mortgage for your unique situation.

An excellent mortgage broker will also be able to negotiate with lenders on your behalf and get you the best possible interest rate. They will answer your questions and keep the dreaded 60-Day Notice from being sent to you.

#4: Not Having Cash on Hand After Closing

Down payment, closing costs, and other fees can add up quickly when buying a home. And it can deplete your savings account even faster. That’s why it’s essential to have some cash set aside after closing, so you’re not left scrambling to cover unexpected expenses.

Don’t Make These Mortgage Mistakes

It’s easy to get absorbed in the excitement of buying a home and overlook some crucial details. But to avoid costly mistakes, it’s essential to shop around, get pre-approved, and find a good local mortgage broker. Here in Montreal, you can count on the team at North East to help you through the process from start to finish. Contact us today, and I would be happy to help you navigate the home-buying process and find the perfect mortgage for your needs.