No one can predict their future housing and financial needs with 100% certainty but mortgage shoppers should take the time to contemplate their long-terms goals and expectations. That’s the only way to make an educated guess as to what their mortgage needs will be. Ask yourself some of the following questions:
- What are the odds I’ll move before my mortgage matures?
- Where will I move and how much might I spend on a new home?
- Will I need to tap my equity at some point?
- Will I still qualify if I need to renegotiate my mortgage?
- Am I better off with a longer amortization?
Career related:
Do you expect your earnings to change significantly during the term of the mortgage?
Will you receive significant bonuses during the term of the mortgage?
Will you need to move cities during the term of the mortgage?
Do you view the current property as a “starter house” that you will upgrade when you have the financial means?
Personal:
What is your relationship status? Is there a chance you will enter (or exit) a relationship during the term?
Will your family grow during the term?
Will any family members move out (or back in) during the term?
Do you plan on doing any renovations during the term?
Will you require any significant amounts of cash for other parts of your life during the term?
Questions like those above can quickly weed out mortgages with restrictive charge terms. If necessary, brokers can take a client’s scenario, make some basic assumptions and show you how a low-frill mortgage’s penalty, refinance or porting restrictions can cost you more than a tenth of a per cent rate discount. Contact me to help you shop for the mortgage that is right for you.
