The Value of a Rate Hold
Securing a rate hold is like having insurance on your mortgage rate – you no longer have to worry about mortgage rates increasing while you find your new home over the next 90-120 days. And if rates drop within that same period, so too will your preapproved rate.
For instance, if you obtain a 3.39% rate hold and then global risks subside and the economy strongly recovers over the next three to four months, that 3.39% could easily jump to 4% or higher. In this case, your rate hold for 3.39% would have saved you more than half of a percentage point, which would translate to a savings of a significant amount of money over the term of your mortgage.
But a rate hold means nothing if you don’t meet the lender’s qualifications. By obtaining a preapproval and a rate hold, you can be confident you have access to mortgage financing and you’ll know how much you can spend before you head out shopping for a property.
It’s important to note, however, that there is a significant difference between being pre-approved and prequalified. In order to obtain a pre-approval, the lender fully underwrites the deal, whereas with a pre-qualification only the most basic details are considered. Remember that many banks will only issue a pre-qualification, while mortgage brokers will ensure you’re pre-approved.
Mark Kupina – Mortage Agent
License # M11001703
Cell: 905.730.4782
Email: mark@kupinamortgage.com
Toll Free: 1.888.955.9011
Fax: 1.888.552.6712
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