Acquiring a property and arranging a mortgage might seem overwhelming, but in reality, it’s quite straightforward. Here are some of the most common mortgage inquiries we encounter on a daily basis:

What is a pre-approval?

The concept of pre-approval often raises questions. In today’s mortgage landscape, pre-approval doesn’t carry the weight it once did; it’s essentially a rate hold, provided the lender permits it.

Clients often request a letter of approval, which, in truth, holds minimal significance. At SOBO, if we indicate you’re “pre-approved” for a certain amount, rest assured, we stand by that assertion. However, bear in mind that lenders evaluate both your borrowing profile and the property.

Even if you’re a stellar borrower, an undesirable property could impede your chances of securing financing

Is it crucial to obtain a pre-approval before house hunting?

Absolutely. It’s essential to understand your purchasing power. However, it’s vital to ensure the pre-approval comes from a reputable source. To us, whether it’s a formal letter, an email, or a phone confirmation, the substance remains the same: it’s about confirming what you qualify for.

Can I change my payment frequency?

Certainly. Most lenders offer flexible payment options, including weekly, bi-weekly, semi-monthly, and monthly. You’re not locked into a payment frequency immediately; you can adjust it even after the mortgage is funded.

How much can I afford?

Be cautious with online calculators; many aren’t accurate.

They often fail to consider current underwriting guidelines, leading to misleading results. Our qualifying calculator, however, is reliable. It provides accurate answers if you input honest numbers. If your credit isn’t ideal, it’s best to reach out to explore your options.

What is the difference between fixed and variable rates?

A variable rate fluctuates with the prime rate set by banks, while a fixed rate remains constant for the term. Fixed rates offer stability but may entail higher penalties to break the mortgage.

Variable rates can provide savings but are subject to fluctuations. It’s essential to understand the implications of each before deciding.

Relevant Link: Choosing Fixed vs Variable Mortgages

Are the rates I see online trustworthy?

Yes and no. While some rates may seem enticing, they often come with restrictions. It’s crucial to review the terms and weigh the pros and cons. Additionally, heavily discounted rates may be available for strong borrowers.

SOBO only advertises mortgage rates for fully featured mortgage products with no restrictions.

What will my mortgage payment be?

Determining your mortgage payment should be straightforward, but different calculators may yield varied results. Our simple and easy mortgage payment calculator provides accurate estimates, considering current rules and guidelines.

What happens if I break my mortgage?

Breaking your mortgage incurs a penalty, which varies depending on factors like whether you opted for a fixed or variable rate and if there were any restrictions. Exploring options like porting or blending your mortgage can help minimize penalties.

Where will rates be in a few years?

Predicting future interest rates is challenging. While trends suggest a gradual increase, uncertainties remain. Economists’ forecasts aren’t always accurate, and rate movements are influenced by various factors, including economic conditions.

Relevant Link: Live Macro-Economic Indicators