Think about your Options- Not just Rate

 It would seem that consumers put far more attention into the options, make and model of the car they would like to buy then they do regarding their financial wellness. Do you buy that new vehicle based solely on price alone? No you don’t, so why would you shop for your single largest investment, your mortgage, based on price alone?

Is it really a surprise that Canadians have managed to rack up 1.5 trillion dollars worth of debt?
It’s not about rate, in fact, rate alone can end up costing you more in the long run. It should be about the total cost of home ownership over the term of the mortgage. Mortgage products can differ from institution to institution and all with varying options built within the mortgage product itself i.e. prepayment options, penalty calculations, due on sale clause, registration, etc… Let me share a client story.

I had a couple referred to me and they were looking to purchase a new home and selling their existing residence. Upon speaking with their existing lender, it was determined that my clients were unable to port their mortgage (meaning take the mortgage with them to the new home). This is because the mortgage they signed for was not portable as per the “due on sale close”. To make a long story short, their only option was to incur a penalty to payout the existing mortgage and take out a brand new mortgage. This could have been avoided if the clients main focus wasn’t “rate”. That said, perhaps the situation could have been avoided had they have had the right advice. Planning is important and as the saying goes, if you’re failing to plan, you’re planning to fail.

It’s important that you do your due diligence and get advice from a professional and preferably someone independent of all institutions (i.e. Mortgage Broker, Financial Planner, Insurance Broker, etc…). I say this because if you are seeking advice from someone loyal to one institution, you may receive biased advice. Proper planning with ongoing proactive management can make the difference between comfortable retirement or no retirement, which would you prefer? In the case of your mortgage, ongoing, proactive mortgage management will dramatically lower your total cost of home ownership. 
It’s time consumers become more diligent about their finances.  Start taking your mortgage financing more seriously and get a plan in place today!