My Best Mortgage Rate? That.Depends%
The answer to “what’s your best rate?” is no longer short. Honest.
This week, I’ll be broadcasting an “au revoir” message to my Rates-By-Text subscribers. I’m mothballing this SMS service because the technology’s now constraining me. Within the 125 characters available to me for blasting out a message, I had managed to pry in the lowest 1, 2, 3, 4 and 5-year fixed mortgage rates, as well as the lowest 3 and 5-year variables.
Whenever my head office would update the lowest rates available through our smorgasbord of lenders, I’d simply push out such update to the phones of my clients who were actively planning to purchase a home, considering refinancing their existing home, or simply peering at a mortgage renewal on their horizon and wanting to know their alternatives.
I now feel the service is pointless, if not potentially a little misleading. Why?
As you may already know, Ottawa has implemented a myriad of changes to mortgage lending guidelines since last fall. Before the changes began, it was relatively simple to provide an inquirer with a tight if not precise range of rates available to them, based principally on their credit profile, and whether the loan would be high-ratio (less than 20% equity or down payment).
Things have since complexified in the world of mortgages, and in the quoting of their rates. The variable or fixed mortgage rate potentially available to you will depend on a wider range of criteria, including but not limited to:
- Are you purchasing or refinancing? Or simply transferring lenders?
- What percent of the property’s value do you have in a down payment or existing equity?
- What’s your credit score?
- What is the form and verifiability of your income? Do you receive a salary or are you self-employed?
- The property you’re purchasing or refinancing: is it your home, your second or vacation home, or an investment/rental property?
- Is the mortgage in your case “insured, insurable, or uninsurable?”
The list goes on. And speaking of technology, a group of young geniuses within my firm has been working feverishly to finalize an app, which will enable us to quickly walk new clients through a series of such questions and arrive quickly and precisely at the most competitive rate or rate-range for your specific situation. This technology will soon be rolled out industry-wide and thereafter, a consumer-based app will be considered.
In the meantime, know this: during the process of loading and updating our lenders’ various mortgage products and rates into their new system, our geniuses realized for example that one of our most popular lenders – at the time this is written – has a different rate for no less than 135 different mortgage scenarios.
Figures like this, in my opinion, really call into the question the utility of the mortgage-rate comparison-shopping websites that have become so popular in recent years. The lowest 5-year fixed rate is an attractive number, but it’s advertised to the rate-shopper without qualification. This is our lowest available rate; but is it the lowest rate for everyone’s situation?
Which brings me full-circle to my technology. I’m pulling the plug on texting the “best rates,” because that’s all they are; and the very best rate that applies to your circumstances may be entirely different.
With that all being said, please understand moving forward: when you contact your mortgage pro asking for their best rates, their answer of “that depends – let me ask you a few questions” is NOT a sales trap. It’s the beginning of a conversation with someone professionally bound to navigate the constant dynamics of Mortgageland on your behalf, and to find the best rate – and mortgage – for YOU.