If you are shopping for your mortgage, here are some things you should consider. First, ensure your mortgage professional has experience and good references to support their work. Because this is the largest financial transaction of your life it is far too important to place in the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.

Here are 4 simple questions to ask your mortgage professional. If they don’t know the answers, then talk to a professional that does! Find a mortgage professional that is going to work in your best interest!

  1. What are mortgage interest rates based on?

Bonds. Specifically Mortgage Backed Securities or Mortgage Bonds. While the 10-year Bank of Canada bond generally trends in the same direction as Mortgage Bonds it is not unusual to see them move in completely opposite directions. Don’t work with someone who has their eyes on the wrong indicators.

  1. What is the next economic report or event that could cause interest rate movement?

A mortgage professional will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.bankofcanada.ca and call The Mortgage Centre at (519)763-3900 to enroll in our “Rate Watch” updates.

  1. When the Bank of Canada “changes rates”, what does this mean…and what impact does this have on mortgage interest rates?

The answer may surprise you. When the bank of Canada makes a move, they can change a rate called the “overnight rate.” The “overnight rate” is a very short-term rate that impacts credit cards, credit lines, auto loans and other rates tied to prime. This is due to the dynamics within the financial markets. For more information and explanation, just give us a call.

  1. What is happening in the market today and what do you see in the near future?

If they cannot explain how Mortgage Bonds and interest rates are moving in real time, as well as rate expectations, you are talking with someone who is still reading last week’s news and probably not the person with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you your stock the day before? You need timely, accurate information to make an informed decision.