December 11, 2020

Are you shopping around for a mortgage? As a mortgage broker for The Mortgage Group, the most common question I get asked is: What’s the lowest rate? Though well intentioned, this question can be problematic for several reasons.

Much like shopping around for the lowest prices on Amazon can quickly become a downward spiral in quality, this singular focus when shopping for mortgages can lead you astray. By focusing exclusively on rates, you might be overlooking other factors that could have a far greater impact on your financial future.

Let’s look at the key considerations you should be reviewing with your mortgage broker.

1. Examine Restrictive Mortgage Clauses

Since lenders have become wise to the fact that consumers are predominantly looking for the lowest rates, they have come up with highly restrictive stipulations embedded in the fine print of attractive low-rate products. These products come with severe penalties that can have massive long-term implications further down the road.

It is crucial to understand whether your mortgage comes with any types of penalties. A bonafide sales clause, for example, is basically a fancy way of saying that you can’t leave your lender until the term is up or until you sell your property. This is not the path to financial freedom that your home is supposed to afford you.

2. Read The Mortgage Terms & Penalties

The second piece to consider is whether your mortgage comes with favourable terms. Should you ever choose to refinance or get out of your mortgage, the penalties involved can have a crippling effect. This is why negotiating agreeable terms with fair penalties should be an important priority.

3. Seek Tax Saving Opportunities

A mortgage renewal is a fantastic time to look at ways to improve your tax situation. A mortgage broker who takes a holistic approach to your finance can do much more than offer you the best rate — they can optimize your taxes and save you money.

The road to real estate investing can be a long and fruitful journey, which is why it always pays off to take a long-term view. Understanding the clauses, terms, and tax implications of your mortgage is much more important than the rate you secure, and can have far greater long-term consequences. That said, we ALSO get our clients the best rates, which is part of the reason why I was recently awarded the People’s Choice award for Best Mortgage Broker in Toronto by the Toronto Star.

Contact Kevin today if you would like to save money on your taxes, mortgage, and investments. Your better future awaits.

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