Top Mortgage Mistakes to Avoid in 2024 and 2025

Top Mortgage Mistakes to Avoid in 2024 and 2025

Applying for a mortgage can be an exciting yet stressful process, especially with shifting market conditions. To help you navigate this journey, here are the top mortgage mistakes Canadian homebuyers should avoid in 2024/25:

1. Skipping Mortgage Pre-Approval
   In a competitive housing market, skipping pre-approval can put you at a disadvantage. Sellers often prioritize buyers who are already pre-approved, making it easier to close the deal. A pre-approval also gives you a clear idea of your budget and interest rate.
2. Overextending Your Budget
   Just because you qualify for a large mortgage doesn’t mean you should max out your budget. Consider your long-term financial goals and avoid locking yourself into a mortgage that strains your finances. Factor in other costs like property taxes, utilities, and maintenance.
3. Ignoring the Stress Test
   Canada's mortgage stress test ensures you can handle future rate hikes. Many buyers neglect to account for this when calculating their affordability, leading to surprises down the road. Be sure to understand the stress test and how it impacts your approval.
4. Choosing the Wrong Mortgage Type
   Fixed or variable rate? Closed or open term? Choosing the wrong mortgage type can cost you thousands over time. Make sure you understand the options and pick what aligns best with your financial situation and risk tolerance.
5. Not Shopping Around for Rates
   Many homebuyers settle for the first mortgage rate they’re offered. Don’t! Shop around and compare rates from different lenders. Even a slight difference in interest rates can save you thousands over the life of your mortgage. Or let us do it for you!

Avoid these common mistakes to ensure a smoother home-buying experience. Taking the time to plan, research, and consult with a mortgage professional will help set you up for success.

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