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Adil Esmail**
**Sales Representative

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In our modern society, everyone lives with a certain amount of debt. Almost no one can afford to buy a car, a house, or even get an education without taking out some kind of loan. Though being in debt was once seen as an undesirable situation, today most people have accepted it as a fact of life, some even to the point where they loose all perspective on their ability to pay back their loans. Make no mistake - though a mortgage is necessary for 99.5% of people who are buying condos for sale in Toronto, it doesn't make good financial sense to simply sign the first mortgage offer that comes your way. After all, you will eventually be paying back the loan, making sure you get the best deal possible can save you thousands of dollars in the long run


Interest Rates



When you take out a loan, you are accepting a lump sum from a lender in exchange for a series of monthly payments. In addition to paying back the sum you borrowed to pay the seller of that Toronto waterfront condo you just had to have, you're also paying the bank a fee for their service in the form of interest. Therefore the lower the interest rate on your mortgage the less you're paying in extra fees. The current best interest rate offered by the bank is known as Prime, so try to get as close to that figure as you can.



Down Payments



One sure-fire way to save money on mortgage costs is to have a larger down payment. Generally banks and lenders want to see that you have at least 15% to 25% of the purchase price of any luxury condos in Toronto you're thinking of putting an offer on saved up. (To put things in perspective, for a condo with an asking price of $200,000, that's $30,000 to $50,000 you need to have saved) However, the more you save for your down payment, the less you have to borrow and the shorter your repayment schedule will be, which saves you a bundle in interest. A larger down payment also indicates to the bank that you're responsible and a good risk, so they will often give you a lower interest rate than a similar applicant with a smaller down payment.



Credit Reports



The interest rate a bank or lender is willing to offer you depends on how much of a risk they deem lending you money may be. If you're too much of a risk, they will refuse to lend to you at all, leaving you without a way to buy even the cheapest of resale condominiums in Toronto. Therefore, it's in your best interests to be a low risk. Banks determine their risk by looking at how much money you make and also at your credit report. To have a positive credit report, make all your payments (e.g. for credit cards) on time, especially in the six months before applying for a mortgage. Also try not to close or open any bank accounts or credit cards in that time period, which might indicate that your financial state is not stable.



Shop Around



While you're scouring the Toronto condo listings, looking at many different properties and judging them all based on how they suit your needs, you should be doing the same thing when you're shopping for a mortgage. Visit as many banks, lenders, and brokers as you can for free estimates on the type of mortgage and interest rate they're willing to offer you. In some cases, you can use a better offer from another institution to entice your bank of choice to outbid their competitors to retain your business.
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