If you are reading this, you are probably a first time home buyer AND you are likely an internet savvy, educated person who is willing to glean all the information that you can before proceeding forward. I applaud your inquisitiveness. Many first time home buyers do not make an effort to have at least a basic understanding about their new home mortgage.
Typically, in my experience, the first time home buyer is more interested in the prevailing interest rate than anything else. While this is an important ingredient within your mortgage, it is often not the most important. There are many things to consider. For instance, how much available cash do you have to put into your home buying project? Some companies boast about a 3.75% rate. That may sound like a really good deal. However, the fine print will reveal that you must pay multiple “points” in order to be eligible for that super rate. Those points typically equal 1% of the loan amount. Additionally, there may be several points that are needed to secure your loan. Many Kelowna mortgage broker companies will offer you a fixed interest mortgage with approximately a 1% increase over the discount company rate without any points to be paid.
Without question, my advice would be to search your local mortgage providers and find the best deal, Don’t simply shop the interest rates. Dig deeper and learn what the true cost of the loan will set you back at closing. Remember, the average homeowner will sell their home at the 5 to 7 year point. If you dump a lot of cash into your loan on the front end, it may be hard to recover that cash when it’s time to sell.
When in doubt, consult your local Realtor. They can guide you through the pre-qualification process. Once you understand the mortgage process and get pre-qualified with a reputable lender, then you are ready to find your dream home!