Sixty-four per cent of first-time homebuyers look to a family member for advice when buying their first home, according to a 2016 Mortgage Consumer Survey released by the Canadian Mortgage and Housing Corporation (CMHC). While asking for advice could be advantageous when it comes to details such as floor plans and school district, it’s not always the best thing when it comes to mortgages.
Ann Brill, principal owner and broker of CENTUM Metrocapp Wealth Solutions Inc. in Toronto, says that “everyone talks to everyone,” but people don’t always take the time to discern whether or not information being shared is appropriate for them and their financial situation or, more importantly, accurate.
“Sometimes when someone quotes you a rate – my neighbor got this rate! – not everyone is truthful, to be fair.” She also says that buyers don’t always pay attention to the specific details of information that they get from those closest to them, for example, mentioning a particularly low rate for a 5-year
fixed mortgage product that Brill knows isn’t possible. “I’ll guarantee you it’s not a 5-year fixed. There’s no way.” If you want to compare
mortgage rates there’s a great tool here.
If a family member is honest and accurate in recommending a deal that they received from their lender, it still might not apply to your financial situation. Say you and your brother have the same income, but you’re self-employed as of last year and he’s been with the same company for six years. To a lender, your borrower profiles are completely different and you would, therefore, qualify for different products at different rates. Even if you did qualify for the same mortgage product, your financial goals are probably not exactly the same, and getting the wrong mortgage product could cost you thousands in interest and penalties, not to mention long-term security.
Rather than relying so heavily on friends and family, James Robinson of Dominion Lending Centers advises people to go directly to the source, such as the Government of Canada website or Genworth Canada, and then discussing the information and options with your
mortgage broker or other mortgage professional.
There isn’t a one-size-fits-all approach to getting a home loan. Which mortgage you get depends on your individual financial situation, not what works for someone else.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate