Finding Affordable Mortgage Rates in Tough Economic Environment
With the recent downturn the global economy has seen, many homebuyers are wondering how they can find the most affordable mortgage rates in the tough economic environment. Truthfully however, if you have good credit and the required down payment, you should be able to get a good rate no matter what the rest of the world is doing. Although some mortgage lenders will charge much higher rates than others, in Canada they typically all remain fairly competitive with each other, depending on what the interest rate is doing.
Of course you’re always going to find lenders that are a little higher or a little lower than some, but because lenders base their mortgage rates on the government of Canada’s overnight lending rate, there is not usually a huge imbalance in rates – for conventional mortgages, that is. A conventional mortgage is one in which the applicant will be approved for a mortgage fairly easily because they have a strong credit history and a large down payment.
Those who have bad credit or don’t have the required down payment amount will definitely find it harder to obtain a mortgage, although it is still possible. It will be much harder during tough economic times however, because this is generally a time when lenders tighten their lending practices and are reluctant to take on large mortgage risks. Regardless of what the government’s interest rate is doing at the time, those with bad credit will most likely have to pay a very high interest rate on their mortgage, and it will be most high at times when the economy is suffering.
One of the ways many homebuyers try to find the most affordable mortgage rate in a tough economic environment is to run around from lender to lender, speaking to lenders and trying to determine which one has the best rate for them. However, this can be an exhausting and time-consuming task. Instead, work with a mortgage broker that can do it for you. Not only can a mortgage broker research all the different lenders in a fraction of the time, but they also have many more lenders that they can reach out to and compare rates with than you would have on your own.
Those who don’t qualify for a conventional mortgage due to bad credit or lack of a down payment may find going to a mortgage broker to find the most affordable mortgage rates in a tough economic environment even more beneficial. With a lender that only has a few products available, a person that doesn’t qualify for a conventional mortgage might pay significantly higher interest rates, or they may not get approved for a mortgage at all.
A mortgage broker though will have access to lenders that specialize in other types of mortgages, such as bad credit mortgages, and will make sure that you don’t have to pay any more interest than you have to. Many think that it’s impossible to find affordable mortgage rates in tough economic times, but just the opposite is true. It’s during this time that lenders are fighting for business the most, and a good mortgage broker can help you take advantage of that fact!
Bryan J is the author of this article. For more information about Mortgage Financing or Heloc please visit canadianmortgagesinc.ca.
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