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

By: Gregory van Duyse

Mortgage interest rates (taux hypothecaire) seem to be the name of the game in the lending market. All of the mortgage company ads seem to scream "Lowest rates in town!" Banks fly gigantic banners outside their branches advertising that they have the lowest rates of anyone. Yet, despite this emphasis on interest rates made by the banks and other lenders (and by consumers, who are unduly influenced by these ads), in reality, interest rates do not have that great an effect on the overall cost of a mortgage loan. The truth is that rates don't vary all that much; the difference only ranges about .06%. That means on a $100,000 mortgage your savings would be $41.12 a year by shopping around.



With all the emphasis lately on credit scores and credit ratings, it is surprising that a lot of people still believe that shopping around for the best rate will make a big difference. Credit scores are based on a consumer's credit worthiness: whether you pay your bills on time, if you have ever defaulted on a loan (hypotheque), whether other lenders have been willing to lend to you, etc. A credit score of 500 will mean you are not a good risk, and a credit score of 700 will mean you are a good risk. Lenders set their rates for a consumer based on this score. That's all there is to it. So apart from a few points difference, all the banks are going to quote the same rate for a person with a score of 650. Lets' look at that interest rate savings of $41.12 per year. If you shop around for more than 6 hours, you are paying yourself only $6.85 per hour for your time.



The only way to have substantial 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 own situation and longer term plans will yield 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.



How can you find out the best strategy? Working with a mortgage broker (courtier hypothécaire) who understands the economic markets, who works closely with you, who understands your needs and unique situation, and who combines this knowledge and information with the best rates available is the secret to finding the right mortgage strategy. Understanding this concept can save you tens of thousands of dollars in home loan costs, rather than tens of dollars.



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

Article Source: Free Content Articles Directory

Gregory is an Accredited Mortgage (Hypotheque) Professional (AMP). To get more information on mortgages - prêt hypothecaires, please visit: www.infohypothecaire.com/hypotheque

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