You're navigating mortgage terms for clients. How do you guide them to the ideal financing choice?

In Canada, most fixed rates are offered on 1-5 years terms unlike the US where rate type remains the same for the entire length of the mortgage (based on what I hear from friends there). Fixed rate provide homeowners with a clear and defined payment until their renewal. No change in payment until renewal. Variable rate (also called adjustable-rate) is linked to the policy rate of the central bank (Bank of Canada / Federal Reserve). As the rates increase / decrease variable rates are adjusted as well. Payments can change up and down, some lenders offer variable rates with fixed payments where the proportion of interest and principal is changed instead with policy rate moves.

Some mortgage products offer flexibility features that can benefit clients, such as the ability to make extra payments (also known as prepayments) without incurring penalties. This helps reduce the loan balance faster, saving on interest over time. There are also offset mortgages, where clients can link their savings account to their mortgage, using the savings to reduce the amount of interest paid. These options provide more control and can help clients tailor their mortgage to their financial circumstances.

There are a myriad of mortgage types that can make your head spin. The good news? Professionals with decades of knowledge can help you find the best fit. They focus on minimizing risks and maximizing benefits by: Listening actively Understanding your goals Considering both short and long-term plans Some options include: Fixed-Rate Mortgage: Predictable payments. Great for stability. Not always the best for those planning to move soon. FHA Loan: Low down payment. Easier qualification. May not be ideal for those with strong credit or larger down payments. Choosing the right mortgage depends on your unique situation. A seasoned professional will guide you to the best choice.

?? When buying a home, your goal is not the lowest interest rate. Let me repeat: your goal is NOT the lowest interest rate. Your goal is to save the most money! Rate is just one part of the equation. The rate can be lowered via refi. ?? 5 things to consider: 1. Job Stability 2. Community 3. Mental and physical health if renting 4. Price of the home and equity growth 5. How much monthly payment you can afford ?? Unbelievable but true! In some cases, a 10% home price hike results in a staggering 300% growth in cash equity.

Interest rates are lower then 6-12 months ago, interest rates should not always be the number one driver in your decision in buying a home! When rates are lower more people will be buying! Which means you could be in multiple offers and pay more for a home! Best thing to do is contact your local Realtor to see what best course of action in your home search. One of the the best phrases I've heard from a lender "Is you're buy a home, you are not buying an interest rate!"

For every homeowner in the search for a good mortgage, it makes sense for interest rates to be a primary driver. You want to get the most value for your money. As you narrow down the offers, ensure you are taking into account how the offer works with your financial objectives, sometimes a lower monthly payment can mean a significantly higher amount of interest paid over the term of your mortgage. Asking the questions -- including the basic ones -- is a great to way to step towards making an informed choice.

Conditions -- must be satisfied to ensure funding Terms -- are the rules of engagement between borrower and lender Conditions can include confirmation of information provided, property sold, loans paid down etc. Terms can include how often you can renew, how to make additional payments and any associated penalties (often in the details) Work with your advisors to understand and confirm ability to abide by the terms. Must be completed before accepting and terms and closing the loan

Down payment is the equity a homeowners injects into the property from savings or often gifts. Conventional down payment is 20% in Canada. For first time homeowners as little as 5% under default insured programs and for certain specialized programs lenders can require as much as 35% down payment. A lower down payment makes homeownership more accessible and the goal should be to increase your principal payment as and where possible

These can add up. Typically homeowners should budget 1-2% of the home value for closing costs. Calculating closing fees can include land transfer tax, legal fees, brokerage fees and any disbursements is pre work for closing. In most cases homeowner will be responsible for coming up with the money to be deposited in the trust account of closing attorney/agent a few days prior to closing date. Always worth inquiring if there is any flexibility on rolling some fees into the mortgage.

?? Know your budget, then shop with confidence. Pre-approval is only as valuable as the company behind it. Choose a reputable lender, or it's just a piece of paper. Pre-approval takes all the guesswork out of the equation. It ensures your dream home aligns with what you can truly afford, turning aspirations into achievable goals. It allows you to call a home your own with more certainty.

Part from the actual closing of a loan that is the ultimate win - the pre approval letter is the most important in the process. But the pre approval is conditioned on all submitted information being true and that your credit score doesn’t drop before closing. It’s very important during the mortgage process to not make purchases through credit or adding installment payments of any type that can sink your debt to income ratio. How fast you can get a pre approval is heavily dependent upon fulfilling conditions for the loan product. Being proactive with sending all documents needed and clearing up any problem on your credit report will make the process much faster and smoother. I recommend taking out your credit report yearly as it’s freez