When applying for a mortgage, it’s essential to have everything just right, as this is one of the biggest commitments you’ll make in your lifetime. Errors made before or during the process can result in higher interest rates or not getting approved for the mortgage that you expected. To make sure that everything goes well throughout your mortgage journey, mortgage expert Jeff Cody has put together a list of the most common mistakes people make when shopping for a mortgage. Keep reading to see what activities to avoid so you can successfully acquire the funds you need to purchase the home of your dreams.

1. Only looking at the mortgage rate
The best rate does not always equal the best mortgage product for the client. Mortgage brokers have many lenders and mortgage products available and match the best mortgage products with reasonable rates to the client’s needs. As a result, you must compare different mortgage products from various sources before choosing a mortgage because you’re more likely to find a great product when you have ten options instead of two.

2. Signing for a mortgage without reviewing the penalties
Most times, people forget to ask about the potential penalties they could face if they had to break the mortgage during the term. Bank penalties are much higher when calculating the interest rate differential (IRD) penalty. Mortgage brokers have many lender options and compare and explain penalties. You must talk to your mortgage broker about the potential liability you could face if you have to break your mortgage during the term.

3. Not asking how the mortgage is registered
When you get a mortgage, your lender will register what is known as a “charge” on your land title or deed. This process stops you from making any changes to the title (like later selling) without them knowing. How they register the charge varies and may have implications for you as the property owner down the road. Ask about it before you get pre-approved, so you have time to discuss the potential advantages or drawbacks and to decide whether the option suits your needs. Mortgage brokers can explain the benefits and drawbacks of both and which one is correct for the client.

4. Not asking what pre-payment privileges are available with the mortgage
Pre-payment privilege is the right to pay part or all of the debt before maturity or ahead of schedule, usually without the risk of incurring penalties. Lenders are very specific when it comes to their borrowing terms and conditions. They must legally outline specifics about charges, penalties, payment schedules, interest rates, and any other key details that affect the borrower. This includes any information about pre-payment, which is the payment of a debt before it is due. Some lenders allow borrowers to make pre-payments at any time, while others limit how much a consumer may prepay on an annual basis. Sometimes clients may get a slightly lower rate but no pre-payment privileges. Different lenders have their own restrictions, and it is up to you to ask your broker about them.

5. Being unaware of digital mortgage portals
As the demand for mortgages grows and the market orients itself toward digital users, online mortgage services are poised to meet the needs of the present and replace traditional loan services. New, digital-first mortgage companies are using online applications and processing to speed things up. Research shows that such portals can actually speed up closing times and are incredibly easy to manage. Ask your broker if the mortgage lender you’re considering has a reliable online mortgage portal to manage their mortgage easily to cut down on the time you would spend in the process. This can be very beneficial.

To avoid more mortgage-related mistakes, reach out to experienced mortgage broker Jeff Cody. I am a fully licensed mortgage broker with Platinum Mortgages Ottawa. I obtained my Bachelor of Mathematics degree majoring in Business from the University of Waterloo and later obtained my mortgage broker license in 1988. My thirty-plus years in the financial industry include three years working for CMHC, lending for several trust companies, business management, and over twenty years as a mortgage broker in the Ottawa area. My mortgage services include purchase and refinance mortgages, first-time homebuyer mortgages, mortgage pre-approval, residential and commercial mortgages, home equity loans, private mortgages, etc. I serve clients across Stittsville, Kanata, Orléans, Ottawa, Clarence-Rockland, Perth, Cornwall, Kemptville, Smiths Falls, Barrhaven, Nepean, Almonte, Carleton Place, Embrun, Prescott, Arnprior, Munster, Lanark, Merrickville-Wolford, Brockville, Casselman, Renfrew, and the surrounding areas.

For a complete list of my services, please click here. If you have any questions about mortgages, I would love to hear from you. Please contact me here.