Mortgage Rates

What is a Mortgage?

A mortgage is a type of loan where real estate is used as collateral. A mortgage is typically used to finance your home or an investment property so you don’t need to pay the entire amount upfront. The borrower then pays back the loan, with interest and principal, over a period of time through a series of ‘repayments’. The lender is usually listed on the title of the property until the borrower repays the entire loan.

How do mortgage rates affect the housing market?

Let’s start with the obvious, the mortgage rate determines the interest you pay on your mortgage loan when you borrow in order to buy or refinance your home.

You might think that low rates encourage people to buy homes, but it’s not quite that simple. Lower mortgage rates do make homeownership cheaper, but lots of other factors go into the decision about whether to buy a home. Among renters who are interested in buying, saving for a down payment is a bigger obstacle than being able to get or afford a mortgage.

Can you negotiate a better mortgage rate?

Often times the loan officer increases fees and rates to increase their commissions. Use the mortgage quotes you get to negotiate the best mortgage rates. Take a quote from one lender to another lender asking them to beat it. Then take that quote to another lender, and so on. Do this until you squeeze every last bit of savings you can.

By law you must not be charged more than 48% annually on your home loan this includes any establishment or other fixed fees. Fees and charges can add up to thousands of dollars over the life of your home loan, so make sure you know exactly what you’re in for.