By Anitra Smith, Real Estate Investor
If you are renewing mortgage or getting a new mortgage, I have some tactics and ideas that could really help you out.
First, getting a mortgage (renewing it or getting a new one), will probably be the biggest monthly expense for you and your household. Making sure you get the best rate possible is key.
As an uncommon real estate investor, three questions that I’m constantly asking are:
- What is the best rate that I can get?
- What would be my monthly payments would be? and finally
- How much can I borrow?
Since 2007, my colleagues and I have been getting between one and five mortgages every month for our own personal investments and I have some ideas and tactics that I think anyone can find beneficial.
First, reconsider the sources of your information.
Most people, banks and credit unions are (unfortunately) the first source of information. This is followed by mortgage brokers, online searches (such as mortgage calculators) and finally recommendations from friends. What we’ve found helpful in reducing our monthly rates is to talk to a variety of sources – even insurance brokers and real estate investors. Getting access to different sources of funds for your mortgage can dramatically reduce your monthly expenses and will certainly increase your knowledge.
Second, relationship trumps everything.
Once I have a competitive rate, having a 1:1 relationship trumps everything. i need someone across the table that understands my lifestyle, the things that we need and can be a trusted advisor. Years ago when I was looking for the cheapest mortgage, all I would come across were commissioned mortgage agents just looking to make a fast commission by offering me a low rate on a mortgage package that wasn’t right for me and my family.
Once I started to see complicated paper work or felt pressured to sign something, I decided to walk away and re-start my search for a mortgage. Today, I advise anyone that your mortgage agent should fill out all of the complicated paper work and it is their responsibility to find out what I’m up to in life… by building an authentic real relationship with me.
Third, start turning your assets and equity into passive monthly income.
If you are like most people, you may have a credit card debt, a car loan, a boring job, and have noticed a consistent increase in prices everything and may feel that it’s getting harder to have a real disposable income for everything you want or need.
Although getting the best rate with a trusted friend/advisor trumps everything, the next thing I’m looking for are opportunities to create passive income such as investing in mortgages or real estate. For instance, MICs (Mortgage Investment Corporations) can redirect my RRSP savings into mortgage investments (that have a far better rate (average of 8-10%) vs. mutual funds that make almost 0% interest). Offering new financial vehicles that can help me and my family retire quicker is fundamental when getting my next mortgage.
These are just some recommendations that can help you find the best mortgage rate in Toronto.