Calgary Mortgage Rates Are Always Changing…Lock In Now!
Posted: Dec 14, 2013
Calgary continues to be one of the hottest home buying markets in Canada, and with Calgary mortgage rates remaining relatively low, this part of Alberta is considered one of the better places in the country to invest. Average home prices have climbed to above $400,000, due in part to the continuing low interest rates, but experts predict these rates may rise by year's end. For those currently in the market for a home mortgage, this could possibly be the best time to lock in before rates start to edge up.
Calgary Mortgage Rates - How Low Will They Go?
With the Calgary mortgage rates having been so attractive for so long, many may be lulled into the belief that they'll remain that way forever. The fact is, however, that even a one-quarter percent rise in interest rates can mean thousands of extra dollars spent over the lifetime of a mortgage loan. The chances of the Calgary mortgage rates going down in the near future are much less than the potential of them rising, even if it's just a one-quarter/one-half percent increase.
The reality is, mortgage rates fluctuate on a daily basis, and with some real estate transactions taking several months to close, the difference between an originally proposed rate and the actual rate applied to a loan can be significant. The only way to ensure that the proposed rate is the same as the one that's applied to the final contract is to lock it in. There are, however, a number of important details regarding a rate-lock that need to be fully understood before agreeing to one. This is another reason to consider utilizing the services of a professional mortgage broker and planner. They have been through the maze many times and know exactly which questions to ask, what options are in the borrower's best interests and which lenders offer the most attractive lending solutions.
A Quote is an Estimate – A Rate-Lock is a Guarantee
When beginning the home mortgage pre-approval process an initial interest rate quote will be given. This is merely an estimate, since rates may go up or come down between when this quote is given and the transaction closes. A rate lock, however, is a legally binding guarantee of an exact interest rate, with certain exceptions. These include:
- A time limit within which the lock is applicable. This should be long enough for the entire transaction to close before the time limit runs out.
- Longer-term rate-locks may carry a fee but they should not exceed ¼ to ½ point.
- Some rate-locks include a "cap," allowing the lender to offer a higher rate if interest-rates rise substantially.
The rate-lock process can be both detailed and complicated. The best strategy for ensuring you come out in the best possible position is to have the advice and experience of a dedicated, professional mortgage broker and planner.
At Mortgages By Candice we know the ropes and can help all along the way. Contact us to get started today.