Mortgage Rates - Something Better Than Shopping For Rates
Is it possible? Something better than getting the best mortgage
rates! Yes. I know it%rsquo;s surprising and that it goes against what
everyone says but it is true and=D6
I can prove it.
First let%rsquo;s define what we mean by the =ECbest rates=EE and the
financial value that we can attach to shopping for the best
rates. The best rate is the best mortgage rate available for
you by any lender.
The advent of super mortgage brokers and the Internet has
forced the mortgage industry to become very competitive. Each
lender has his best rate and most of the time it%rsquo;s within 0.06%
of the rates of major banks. Shopping with a mortgage broker
makes this easy.
The financial impact of getting a better rate of 0.06% on a
100,000$ mortgage is 1028$ over 25 years or 41.12$ per year.
That is not what I call super savings!
Something better than the Best Rate
Dr. Milevsky at York University (Toronto, Canada) published a
stunning report. He compared two mortgage strategies between
1950 and the year 2000 and found that:
=EF 88% of the time one strategy was better (money saved)
=EF the average savings was 22,000$ on a 100,000$ mortgage
amortized over 15 years.
Now we%rsquo;re talking. Saving 22,000$ in 15 years, that%rsquo;s 1466.66$
per year. It%rsquo;s not hard to see that choosing the right mortgage
strategy is a LOT more important than simply shopping for a
better rate.
The real conclusion of the study is not that one mortgage
strategy is always better. It%rsquo;s not! The lesson is that
choosing a strategy is very important.
[Note: the conclusion of this study is applicable for Canadians
and Americans. The interest rates during 1950 and 2000 are very
similar and the different strategies are available in both
countries.]
What should you do?
Selecting the best mortgage strategy is not as simple as
calling around for the best rate. You need to:
=EF analyse your situation and your long term objectives
=EF analyse the current interest rates and where they are likely
to go in the next 10 to 15 years.
=EF choose the best strategies based on that information
I suggest that you take the time to find a mortgage broker that
does more than shop the mortgage rates for you, but a broker
that will take the time to set up a plan to save you money over
the entire life of your mortgage. Once you have found a good
broker, ask him to present you with 3-4 strategies and his
recommendations.
It could save you a lot of money.
About The Author: Gregory van Duyse, AMP =F1 is an Accredited
Mortgage Professional in Canada and has written a series of
articles on choosing the best mortgage strategies (hypoth=CBque).
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