Choosing the Right Mortgage Lender for your Refinance: 5 Factors Other than Interest Rates to Consider

Credit 101
September 01, 2023 (2 mins read)

Finding the best mortgage rates in Ontario requires research and professional guidance from a reliable mortgage broker. Today it’s easier (and cheaper) than ever to refinance. However, with best mortgage rates at all-time lows and hundreds of lenders offering an online process, it’s hard to choose the right lender.

Many people in Ontario mistakenly focus on mortgage interest rates alone. While the interest rate is important, it’s not the only factor to consider. Here’s where else you should focus.

1. Closing costs

Why overpay in closing costs? Some lenders charge much less for a refinance while others charge just as much as a purchase. When you apply for the loan, you’ll receive a Loan Estimate within 3 days (it’s the law). Compare the closing costs from at least 3 lenders to see which one offers the best deal.

2. Customer service

Customer service is important when choosing a lender. This could be your lender for the next 15 to 30 years and your mortgage is one of the largest investments you make. Read reviews about the lender’s customer service and test it yourself when you’re in the application phase to determine if they provide service to the level you desire.

3. Loan options

When you refinance, you don’t have to choose the same program you already had. Refinancing is a great time to look at alternatives whether it’s a shorter-term or different type of loan. Ask lenders about the loan options they offer and compare them to the loan options from other lenders too.

4. Type of lender

When you choose a lender, you have a couple of options. You can go directly to the bank or mortgage lender or use a mortgage broker. If you go direct, you’ll have only the loan programs that the lender offers. If you use a broker, you have programs from all the lenders the broker works with, but you won’t deal with the lender themselves. A mortgage broker acts as a middleman between you and various lenders, helping you find the best mortgage deal tailored to your specific needs. Their extensive network of lenders allows them to access a wide range of mortgage products, including exclusive offers that may not be readily available to the public. Furthermore, a mortgage broker can offer personalized advice and assist you throughout the mortgage application process, making your home buying journey smoother and less stressful. You can check out our recommended mortgage broker in Ontario.

Decide what you’re more comfortable with – talking directly to the lender or going through a third party to refinance your loan who act in your best interest.

5. Qualifying requirements

No two lenders have the same qualifying requirements even if they offer the same loan program. While you may not get approved with one lender, another may be fine with your qualifying factors.

Final Thoughts

The mortgage interest rate on your refinance is important, but it’s not the only factor. Looking at the interest rate and closing costs together is important so you know the loan’s total cost, but there’s more than goes into it too.

The loan options, qualifying factors, and customer service are just as important. Your mortgage is one of the largest decisions you’ll make in your personal finance lives. Choose the wrong loan and it could cost you tens of thousands of dollars and hours of headaches and frustration.

Shop with at least three lenders, if not more, and compare all the factors to choose the one that’s right for your refinance.

For more information on mortgage brokers in Ontario, visit NuBorrow. They are your reliable partners in finding the best mortgage rates and making your homeownership dreams a reality.