Where do you go if you want to secure a mortgage on a home? Some people deal directly with financial institutions while many use the services of a mortgage broker to get the best deal for them.

Where do you go if you want to secure a mortgage on a home? Some people deal directly with financial institutions while many use the services of a mortgage broker to get the best deal for them.

HOMEFINDER: Stay loyal or let broker find your best deal?

Go with what feels like best fit for you when mortgage shopping

When it comes to shopping for a mortgage, low interest rates aren’t the only thing home buyers are looking for.

With banks, credit unions and independent lenders all offering various ways to finance a home purchase, prospective buyers must also determine who they’ll work with to find the mortgage deal that fits them best.

Not everyone is comfortable negotiating directly with their potential financier, even if they’ve dealt in past with their chartered bank, credit union or private lender.

In such cases, homebuyers often use the services of a mortgage broker as a way to avoid the stress that can come with dealing with an institution that may not be able or willing to work within your financial capabilities.

“It can help having somebody who’s a bit more invested in the deal and who does these sorts of things on a regular basis,” says Realtor Tim Ayres, president of the Victoria Real Estate Board.

Mortgage broker Lori Lenaghan says one thing brokers can offer that financial institutions can’t always guarantee is the lowest rates, since they shop the client’s financial situation around to various lenders to find the best fit.

“People will move from one bank to another for a quarter per cent,” she says of the search period.

Since they are working in the customer’s best interest, a broker tends to have more flexibility than large institutions that are bound to corporate policy, she adds. That means the client can avoid the hassle of pitting their home financial institution against another to get the best rates and terms.

That flexibility can come into play in refinancing situations as well. Some lenders will extend a borrower’s amortization period to 35 years of they meet certain criteria, where others are limited to 30 years, she says.

In terms of interest, homebuyers are blessed with continued low rates, with no expectation of rate hikes until at least 2015. Variable rate mortgages, which fluctuate with the prime rate, are still a good bet, Lenaghan says, although more conservative people still go with a fixed rate. Even those mortgages are hovering just over three per cent for a five-year term.

For people who would rather approach their financial institution directly, there are some choices on the market.

Ryan McKinley, senior mortgage development manager with Vancity, says the issue of affordability in the Greater Victoria market has prompted it to get creative with how it helps buyers finance their homes.

One option allows its members to work with friends, family, roommates and others to combine their resources and purchase a property together.

“This is a great option for parents who may not want to gift their children a down payment, but would rather invest with them and give them a hand up,” he says.

The idea of working with a mortgage specialist in advance and talking about your future plans is always a good idea, McKinley adds.

“Even if they’re not planning to purchase for some time, at the very least we can provide a road map so they’re able to achieve home ownership in the future.”

Lenaghan says people are very educated about shopping for mortgages these days.

“Realtors are very good at getting people in ahead of time so there’s no surprises,” she says.

“Once they’re here, we can educate them about what their options are if they don’t qualify. We really work with the client over the long term.”

Q: WHAT ARE SOME POINTS TO CONSIDER ABOUT MORTGAGES?

Consider a smaller mortgage, rather than the maximum you can afford – Taking a smaller mortgage can help you comfortably deal with unexpected changes to your monthly budget

Evaluate the impact of an increasing interest rate on your payments – For a mortgage of $250,000 at 5%, a jump of 2% would increase monthly payments by about $300

Plan to be mortgage-free faster – Make weekly or biweekly payments, lump sum payments to your mortgage principal or increase your regular payment amount

Ask for help if you have trouble making mortgage payments – If unforeseen financial circumstances impact your ability to make regular payments, seek help sooner than later

Source: Canada Mortgage and Housing Corporation

ddescoteau@vicnews.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

West Shore RCMP is asking for the public’s help in locating Mackenzie Courchene, a Langford teenager.
MISSING: Mackenzie Courchene last seen in Langford on March 2

West Shore RCMP is asking for the public’s help in locating the Langford teenager

Rendering of the proposed Esquimalt public safety building. (Courtesy Township of Esquimalt)
Esquimalt blazes new trail toward modern public safety building

Township using alternative approval process for first time to gauge public support for proposal

Landmarks such as Howard the giant gnome at Galey's Farm in Saanich make a stunning backdrop for celebratory dance in the Greater Victoria Festival Society trailer for its coming Dance Victoria campaign. (Screeshot/Greater Victoria Festival Society)
Residents’ videos help campaign Dance Across Victoria

Celebratory dance clips to be compiled into Greater Victoria Festival Society video

Reynolds Secondary School’s spring musical Freaky Friday features Grace Fouracre as teen Ellie Blake (left) who swaps bodies with her overworked mother, Katherine, played by Nadia Lurie. (Photo courtesy Reynolds Secondary School)
Saanich high school goes virtual with Freaky Friday musical

Reynolds Secondary theatre program to livestream performances March 9-12

Saanich Fire Department. Black Press Media File Photo
Fire displaces three Saanich families from two homes

Saanich firefighters found the fire had spread to a neighbouring home upon arriving

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
‘It’s been a good week’: Tam hopeful on vaccines as pandemic anniversary nears

Tam says the addition of two new vaccines will help Canadians get immunized faster

Const. Allan Young. Photo: Abbotsford Police Department
Manslaughter charge laid in Nelson death of Abbotsford police officer

Allan Young died after an incident in downtown Nelson last summer

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

The Port Alice pulp mill has been dormant since 2015. (North Island Gazette file photo)
Parts recycled, life returning to inlet as as old Port Alice mill decommissioned

Bankruptcy company oversees de-risking the site, water treatment and environmental monitoring

The Conservation Officers Service is warning aquarium users after invasive and potentially destructive mussels were found in moss balls from a pet store. (BC Conservation Officers Service/Facebook)
Aquarium users in B.C. warned after invasive mussels found at pet store

Conservation officers were told the mussels were found in a moss ball from a Terrace pet store.

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Donald Alan Sweet was once an all star CFL kicker who played for the Montreal Alouettes and Montreal Concordes over a 13-year career. Photo courtesy of Mission RCMP.
Ex-B.C. teacher who was CFL kicker charged with assault, sexual crimes against former students

Donald Sweet taught in Mission School District for 10 years, investigators seek further witnesses

(Black Press Media files)
Medicine gardens help Victoria’s Indigenous kids in care stay culturally connected

Traditional plants brought to the homes of Indigenous kids amid the COVID-19 pandemic

Most Read