Lowest Mortgage Rates – Rate Hub & Rate Supermarket – For Real?
So you’re comparing rates on Rate Supermarket and Rate Hub… What’s the catch?
If you’re reading this post right now, chances are, you may have typed Rate Hub or Rate Supermarket into Google and accidentally clicked on this post! Otherwise, you were probably specifically looking for someone to explain what conditions you can expect when analyzing the lowest mortgage rates you see on both of these popular Ontario mortgage comparison websites.
Lowest mortgage rates – Are they for real?
Yes! The mortgage rates you see on both Rate Hub and Rate Supermarket are actual Ontario mortgage rates which you can get for your home financing in Windsor, London, Toronto, Ottawa, or wherever else you are in Ontario!
Rate Hub & Rate Supermarket – Conditions? Yes…
While you can often find the lowest mortgage rates on Rate Hub and Rate Supermarket, the rates listed are often what we call quick close, high ratio or insured, and are for real deals. Essentially, these rates are for the most ideal mortgage and if all conditions are not met, often times it means you will not qualify for those specific rates.
What Is a Quick Close Mortgage Rate?
A quick close mortgage rate is typically the lowest mortgage rate that a lender will offer a borrower since the closing date of the mortgage will occur within 30 days of the mortgage commitment. The further into the future your mortgage closing date extends, the more uncertain the lender is with respect to mortgage rates. If your closing date is in 90 days or three months, the cost of borrowing money may increase and thus the lender must charge a higher rate to make a profit. Often times, if a client requests a 120 day or 4 month pre-approval rate hold, the lender will typically offer a rate which is 0.15% to 0.30% higher than their quick close mortgage rate.
While you may feel like you are being ripped-off with a mortgage closing date in excess of 30 days, it should be noted that if quick close mortgage rates remain lower than your mortgage commitment within 30-days of closing, the lender will offer you the lower rate.
What is a High Ratio or Insured Mortgage?
A high ratio mortgage is one which the amount mortgaged is in excess of 80% of the assessed value of the property. In Canada, high ratio mortgages must be insured through the Canada Mortgage and Housing Commission (CMHC) or Genworth Financial. While you might expect that borrowers who invest a down payment of 20% or more should be rewarded with the better rate, the opposite is actually true. Because high ratio mortgages are insured, the lender is guaranteed to receive at least the borrowed amount, while uninsured conventional mortgages have increased risk if a bankruptcy, power of sale, or other issue were to arise.
Real Mortgages Only – No Pre-Approvals!
When shopping on Rate Hub and Rate Supermarket, you must be aware that the rates being offered are for actual mortgages which are intended to be funded by the lender. This means that you must commit to the lender and go through the approval process with the expectation that you will finance your home purchase or refinance through that particular mortgage broker and lender. This is because mortgage brokers, like myself, are often left in the dust when we put our lowest mortgage rate on paper and the client runs back to their “big bank” in hopes of receiving a rate match. My clients usually stick with me because they realize that I am giving a great rate upfront, while their bank tried to over-charge them thousands in interest over the term with their original proposed rate.
When to Use Rate Hub, Rate Supermarket & Comparison Sites
These websites are great to gain knowledge of what the lowest mortgage rates on the market currently are, but don’t expect to get yourself locked in for a pre-approval before shopping. Contacting mortgage agents through these sites should be done when you are within 45-days of your anticipated mortgage closing date and are ready to move forward with a full application and approval. It should also be noted that mortgage brokers pay referral fees for each contact request made by clients. This is good to keep in mind before you decide to email 10 mortgage brokers offering the same mortgage term and rate, costing each referral costs when they are offering the same product!
Lower Rate on Rate Hub or Rate Supermarket? Challenge Me!
You’re already on my blog… Take a look at my rates at the top right of the page. Do you have a better rate than what I have advertised? Please present your mortgage rate and terms and I will take the challenge to make it worth your while to stick with me.
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