“What is your best rate”, is not the most important question!
My suggestion is to not get too caught up with “what is the best rate” because often people select rock bottom rates on restricted mortgages and don’t investigate deep enough into the fine print. Then down the road, they may pay dearly for their mistake!
I like to keep things simple as best I can when explaining mortgage shop-talk. Here are some Cole’s notes regarding selecting lenders offering lump sum mortgage payments and when you should be taking advantage of them:
- Some mortgages are far more restricted than others
- It simply depends on your goals and capabilities whether it will affect you or not
- Self employed or people employed in a position that receives bonuses should practice lump sum payments
- Most lenders (through mortgage brokers) allow up to 20% annual lump sum payment
- Less-flexable lenders may only offer 15, 10, 5 or zero lump sum payments
- Very important and typically forgotten questions: How often can I make lump sum payments? What is the minimum permitted lump sum payment?
- Some lenders have a minimum lump sum pre-payment of $5,000
- Others on the other hand allows minimum lump sum pre-payments of only $100
- A good broker will ask you the right questions to figure out what is best for you
Just something else to suggest that you watch out for. These days more than ever.