A powerful tool to save thousands on your mortgage (hypothèque)

To listen to the average person discuss their mortgages, you would think that the only thing that influences the total cost of their mortgage is the rate. You've heard it, at parties, at over the fence conversations: "What rate did you get on your mortgage?" "I got a mortgage rate (taux hypothécaire) of ____%". Yet it has been shown that, given the same parameters (credit history, length of mortgage, payment terms, etc), the average difference between mortgage rates is about .06%. On a $100,000 mortgage, that is only $41.12 per year.

Is it worth all of the time spent on calling various mortgage brokers (courtier hypothecaire) and researching on the internet to achieve such a tiny savings? No. If you figured out the time spent shopping around for a rate at your per hour wage, you would find you spent a lot more than the $41.12 average savings! The fact is that any real savings on your mortgage is not going to be made by shopping around for hours and hours looking for the lowest rate. Let's face it, all of the lenders will know your credit rating; they are all going to be looking at the same factors and therefore the rates each of them quotes will be in the same narrow range. Determining interest rates is just a function of the risk/reward ratios that lenders analyze. Since they all use the same analysis techniques, you cannot expect the rates to be grossly different. (Don't listen to your neighbors. Anyone who boasts that he got a dramatically different interest rate than you were able to obtain either has a much more favorable credit rating, or is lying.)

The only way to have a real savings on your mortgage is to have an overall mortgage strategy. There are many types of home loans (hypothèque) being offered, and the combinations of benchmark rate used, terms of payment and duration of loan can have a lot of influence on the loan over time. This is what is more important to look at. Finding the mortgage professional who will discuss more than just the interest rate, but instead will understand the economic markets and examine your financial situation and longer term plans will achieve much more savings on your mortgage. Choosing the right mortgage strategy can save you tens of thousands of dollars, as compared to the $40 cited above that can be saved on a lower interest rate.

Why do banks only talk about interest rates when there really isn't that much of a difference between rates? Because that is the easy way to attract customers. Developing an entire mortgage strategy for a customer takes a lot more in terms of understanding and analyzing markets, mortgage products, individual needs and a host of variables. Many bankers and mortgage brokers have neither the time nor the expertise to perform this in depth services for their customers.

If you want to really learn more about how this concept can be true, read the following website: Mortgage Intelligence - Hypothèques

Gregory writes articles for Informezvous.com - hypotheque and he is the owner of http://www.infohypothecaire.com/ - Pret hypothecaire. To have more information about mortgages, please visit one of his websites:

http://www.infohypothecaire.com

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