RealEstate Reimagined on Mortgage Brokers

Take the noise and clutter out of real estate by keeping it real with RealEstate Reimagined.

When working with mortgage brokers, it’s important to know these three key points.

Knowing what a mortgage broker is, knowing the difference between a mortgage broker and a traditional bank, and the language you need to know to make yourself a pro in making the proper decision for you.

First, a mortgage broker is an individual that is able to access a wide range of lending institutions with no cost to the client.

Secondly, the difference between a mortage broker and a traditional bank is both the wider range of lending institutions, but also a wider range of interest rates, sometimes even being able to access better rates at the same institutions.

Thirdly, some important language to know when getting a mortgage is the difference between a variable rate and a fixed rate, where a variable rate is flexible and can start as low as 1.85%, normally with a lesser interest penalty of 3 months which is different from an interest differential penalty of what a 5 year fixed can be set at. A variable rate can change over the course of 5 years but it all depends on the bank of Canada deciding if they want to increase or decrease the prime lending rate.

A fixed rate can be set at as low as 2.59% for the entire 5 year term. The fixed rate mortgage also has a penalty structure of a 3 month interest penalty or an interest differential penalty which can be a big difference between a $1,500 penalty or a $10,000 penalty.

Remember, when it comes to picking a mortgage, shop around, pick a plan that best works for you, and understand the terms and conditions of the mortgage.

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