You might think that your bank will give you the best mortgage rates in the market because you have been a very loyal customer for many years. This rarely happens. You might actually get lower rates from another provider even if you are not a customer. How do you get the best Bank of Montreal mortgage rate specials? If the bank is offering the best rates, getting pre-approved will help you lock the best ones in.
BMO Mortgage Rate Special Promotion
Mortgages come in all shapes and sizes. The Bank of Montreal offers a wide range of options, allowing you to choose combinations of fixed and variable rates with different terms. If you want to pay off your mortgage, make a down payment, or try out a short-term mortgage to see how it suits you, you can look around to find the best BMO mortgage rates to suit your needs.
- What is an open mortgage?
- What is a closed mortgage?
- What is a convertible mortgage?
- How do you get the best Bank of Montreal rate specials?
- What is a Mortgage Pre-approval?
- Do I have to compare BMO’s rates?
- How do I get pre-approved for my mortgage?
BMO mortgage rates are offered with a selection of open, closed, and convertible terms.
What is an open mortgage?
An open mortgage means you can pay it off anytime. Basically, on an open mortgage system, you can pay in advance, or more than what you are scheduled to pay for. You can make extra payments without penalty. This means it is possible for you to pay off your mortgage earlier than planned.
For example, Mr. Smith wanted to purchase a house at $400,000 and took an open mortgage worth $250,000. However, Mr. Smith has a business strategy that requires him to liquidate some of his assets. He then sells some of his properties and uses the money to pay off his mortgage without any penalties.
Open mortgages are beneficial to people with varied income. However, you can expect the interest rate to be higher than a closed mortgage due to its flexibility. If you plan to pay extra towards the principal, it is possible to offset the higher interest through the deductions made to the principal.
What is a closed mortgage?
A closed mortgage decides how much you are going to pay monthly. It cannot be paid without any prepayment penalty, except if the mortgage approves it. It provides very few payment privileges, unlike with an open mortgage system where you can pay anytime without fees. You will receive a penalty if you pay more for the principal than the scheduled monthly payment. This penalty will be incurred if you exceed the prepayment privileges you get when increasing the monthly payment.
Let’s say Mr. Smith took out a mortgage for $250,000 and his monthly payments are $600. His mortgage does not allow him to make a prepayment of more than 10% in a lump sum annually, or else he will get a penalty equivalent to three monthly payments.
A closed mortgage is a smart move if you are not planning to sell your property soon. Closed mortgages are popular due to lower interest rates.
Read more: Open vs Closed Mortgages
What is a convertible mortgage?
A convertible mortgage is a closed mortgage that you can convert to a fixed term rate without any penalty. This conversion will let you take advantage of lower interest rates.
How do you get the best Bank of Montreal rate specials?
BMO mortgage rates are updated on their site daily. You can give them a call or fill out an online application—all for your convenience. Filling out the online application will take less than twenty minutes. Once you’ve submitted your form, you will receive a Personal Identification Number and a Loan Application Number that you can use to check the status of your loan approval. These are the things you need to prepare for a smooth application:
- Your monthly income excluding taxes
- Your house rents
- The value of your assets (e.g., cars, properties, savings)
- The monthly payments and value of your mortgage, loans
- The financial information of your joint applicant if you have one
What is a Mortgage Pre-approval?
With pre-approval, your credit, financial, and employment information will be assessed by the lender. It is essential for the lender, or the bank, to know how much you can afford. They will be looking at your financial details, including your source of income, credit score, and existing debts. This will help the bank in giving you an estimate on how much you can afford in a home, and they will be able to tell you which mortgage rates suit you. You don’t have to worry whether your application will be accepted or denied. Aside from this, you can easily find the best Bank of Montreal mortgage specials.
Do I have to compare BMO’s rates?
Comparing mortgage rates will help you find the best Bank of Montreal mortgage specials. It is highly recommended that you find the best mortgage rate before you undergo pre-approval. This way, you can work on the vital details and requirements while finding a good mortgage broker to help you get the best rates.
How do I get pre-approved for my mortgage?
You can start by comparing brokers to find the best Bank of Montreal mortgage rate specials in your area. When applying for a pre-approval, you will be asked for information like personal details as well as financial details like your income, existing loans, and savings. You will also be asked about the type of property you’re going to invest in. Here are the things you need to prepare before applying for your pre-approval:
- Valid Personal Identification cards
- Proof of your income, like paystubs
- Bank statements that reflect your down payment
- Proof of any assets, like your car
- Information about regular payments, like your credit card loans or student loans
Before you consider buying your future home, make sure that you are prepared for everything. Our site comparemyrates.ca will help you find the best Bank of Montreal mortgage rate specials so you can find what suits you best. Always remember to look around for the best rates before you buy what you want. Your next step awaits.