Should You Get a Second Opinion on a Home Loan?

  • Posted 09 Feb
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Should You Get a Second Opinion on a Home Loan?

If you’re in the market for a home loan, there’s one thing you can’t afford to be: complacent. In the same way that you would shop around for the best price on a new TV or computer, do some research before you commit.

Think about it this way, if you just saw the doctor and he told you that you need a costly and extensive surgery, you’d probably want a second opinion right? That’s the way you should be when you’re looking for a mortgage. Even of you’ve been pre-approved on your home loan, are you really sure that’s the best deal you can get?

So should you get a second opinion on that home loan? The answer is yes, and here’s why:

1. Interest rates

The great master of the sealing a deal, Donald Trump, talks about the idea that the price you actually pay for something should be the least of your worries in a transaction. The most important thing is how the deal itself is structured. You may have a great interest rate, but if your financial situation isn’t in good shape, the best interest rate may not be the best deal for you.

Now interest rates are important, but they aren’t everything. You should always try and get the best interest rate that suits your budget, and that’s why you need a second opinion.

2. Some things to consider

Here’s why you may need a second opinion. You may not have taken the following into consideration:

  • Would it be a better idea for you to decrease your deposit amount and use your cash to reduce credit card debt instead?
  • What about pay points or origination fees? Should you be paying those?
  • Might a no-closing cost mortgage make more sense to you?
  • Are you going with a floating rate or fixed rate mortgage, and which will best for you?

3. Using your Realtor or Bank’s mortgage offerings

It’s certainly more convenient to use the mortgage company recommended by your Realtor, but its not always the most economical move you can make. In the end, you could end up paying more for that convenience. These loan professionals don’t work for free, and they generally aren’t going to offer you the best deal if there’s money involved in commissions.

The same can be said for using your bank. They give you things like a free cheque account because they know that when it comes time to getting a loan, you’re more likely to use their services. That familiarity can cost you unless you shop around. Again, get a second opinion!

Always get a second opinion on your home loan. Shop around and don’t just settle for the convenience of your realtor’s advice or that of your bank. There are numerous third party loan professionals that will probably be able to get the best deal for you, and a mortgage broker can help you even further.

Contact the team at Credit and Finance today to discuss your mortgage requirements.

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