It has been a while since I last posted and was trying to think what type of information would be most beneficial. We hear so much about interest rates being the lowest in years and how it is such a great time to refinance. This is true, however it is also important to realize what is a great rate and is it really my best interest to purchase a home or refinace durring these tough ecomomic times.
Being a mortgage broker you would think that I should say "everyone should purchase a home at their earliest possibility". Why pay rent when you can own and start building equity (asset value in a real estate purchase). Sometimes it is far better to rent! More important you need to make sure that when you are buying a home that you have some financial cushion or resources to make it through the various challanges or responsibilities of life. We live in an age where everyone wants something fast, now and easy. The reality is that most good things in life take time, energy and work.
Are you prepared or have you started to save for not only a down payment, closing costs (legal bills, moving costs, etc.) and the ongoing maintenance that are part of home ownership? Do you have adequate savings that would cover at least 3 months of your monthly obligations in event you lost your job, became ill or other life change? If not, then perhaps making that home purchase today should perhaps wait until you are better prepared.
If deep inside you are somewhat skeptical or feeling reservations about buying a home or using the equity in your home to pay out some debt, just because your bank or broker is telling you that now is the time because rates will never be this low again! Just remember, are you prepared for the rough times... If yes then perhaps they are right. If not, then wait because the best rate is the rate of the day when you know that you are well prepared and have your financial house in order!
These are tough times. BE SMART... ASK QUESTIONS...GET ANSWERS!
Tuesday, November 10, 2009
Sunday, June 24, 2007
When Shopping For A Mortgage
When shopping for a mortgage, keep your goals and needs in mind. There are many options, and a mortgage can be customized for your own circumstances.
Types of mortgages include uninsured low ratio or conventional mortgages and high ratio mortgages. Then there are a variety of features and payment options to consider. Mortgages are available on a closed or open basis, at fixed or variable rates and can have various terms generally ranging from six months to five years, but some institutions will offer seven or 10-year terms. Generally, most mortgages are amortized over 25 years.
Other features and options to look for when shopping:
Partial pre-payment: This allows you to make extra payments against your principal.
Compound interest: This refers to the interest that’s charged on the interest owing on your mortgage. The more frequent the compounding, the more interest you’ll pay. Most traditional mortgages have the interest compounded semi-annually. In the case of variable rate mortgages, interest is usually compounded monthly.
Increases in regular payments: Some lenders will let you increase your regular payments. These vary by lender but are generally between 10 per cent and 25 per cent. This can save you thousands of dollars in interest costs over the life of your mortgage.
Frequency of payments: With this option, you are not confined to making your mortgage payments monthly, you can arrange your payments with your pay cheques, making them weekly. This flexibility may help you budget better, and the more frequently you pay your mortgage, the more you’ll save on interest costs over time.
Portability: If you are selling your present home and buying another, this option allows you to take your mortgage – with the same term, rate and balance – and apply it to your new house. If your mortgage isn’t portable, don’t sign for a longer term than you’re likely to stay in the house or you could wind up paying a pre-payment fee to break the mortgage agreement.
Assumability: This feature allows the buyer of your house to take over or “assume” your mortgage. If your mortgage has a fixed interest rate lower than current rates, it could be an attractive selling feature.
Early Renewal: This allows you to renew your mortgage before it matures. It is a useful option if you expect mortgage rates to increase because it allows you to take advantage of current rates. If current interest rates are lower than your existing mortgage rate, you will likely have to pay a pre-payment fee for renewing early.
Make sure to inquire about options that interest you.
- Canadian Bankers Association, www.cba.ca
Types of mortgages include uninsured low ratio or conventional mortgages and high ratio mortgages. Then there are a variety of features and payment options to consider. Mortgages are available on a closed or open basis, at fixed or variable rates and can have various terms generally ranging from six months to five years, but some institutions will offer seven or 10-year terms. Generally, most mortgages are amortized over 25 years.
Other features and options to look for when shopping:
Partial pre-payment: This allows you to make extra payments against your principal.
Compound interest: This refers to the interest that’s charged on the interest owing on your mortgage. The more frequent the compounding, the more interest you’ll pay. Most traditional mortgages have the interest compounded semi-annually. In the case of variable rate mortgages, interest is usually compounded monthly.
Increases in regular payments: Some lenders will let you increase your regular payments. These vary by lender but are generally between 10 per cent and 25 per cent. This can save you thousands of dollars in interest costs over the life of your mortgage.
Frequency of payments: With this option, you are not confined to making your mortgage payments monthly, you can arrange your payments with your pay cheques, making them weekly. This flexibility may help you budget better, and the more frequently you pay your mortgage, the more you’ll save on interest costs over time.
Portability: If you are selling your present home and buying another, this option allows you to take your mortgage – with the same term, rate and balance – and apply it to your new house. If your mortgage isn’t portable, don’t sign for a longer term than you’re likely to stay in the house or you could wind up paying a pre-payment fee to break the mortgage agreement.
Assumability: This feature allows the buyer of your house to take over or “assume” your mortgage. If your mortgage has a fixed interest rate lower than current rates, it could be an attractive selling feature.
Early Renewal: This allows you to renew your mortgage before it matures. It is a useful option if you expect mortgage rates to increase because it allows you to take advantage of current rates. If current interest rates are lower than your existing mortgage rate, you will likely have to pay a pre-payment fee for renewing early.
Make sure to inquire about options that interest you.
- Canadian Bankers Association, www.cba.ca
Thursday, March 29, 2007
Get Pre-Approved!
This is a very important step before you even starting to look for a home. Many people get excited about buying a home and want to start looking around as soon as possible. You may even hook up with a real estate agent and start considering different properties, but you need to know what you can afford before you get started. There is nothing worse than finding a home you want and not being able to afford it. Of course now you will have to look at lower priced homes and your enthusiasm fall like a rock because you are still thinking about all of those nicer homes.
Getting pre-approved not only helps you know what you can afford, but it also can save you a significant amount of interest. Most pre-approvals are good for 90-120 day rate hold. This means that you can hold the rate you have been pre-approved for this long. If the rates happen to go up and you end up buying a home in this time frame, then you are guaranteed the rate you were originally pre-approved for, not the higher rate at the time. Also, if rates happen to fall in this period, you will get the lower rate.
Getting pre-approved is a fast and easy process with no cost and no obligation. Although having a written pre-approval holds the rate for you, it is not guaranteeing you the mortgage. Once you have found a property and make an offer, the deal becomes live and will be sent in for approval. Final approval is based on satisfying special requirements like employment verification, down payment (if you have one) etc., so always make sure to put subject to financing in the mortgage contract just in case.
Make sure you deal with a professional who specializes in residential mortgages. The mortgage industry is extremely complicated with hundreds of options and choices. Using an expert can make the difference between getting into a home or your choice or having to rent forever and paying off someone else’s mortgage!
Getting pre-approved not only helps you know what you can afford, but it also can save you a significant amount of interest. Most pre-approvals are good for 90-120 day rate hold. This means that you can hold the rate you have been pre-approved for this long. If the rates happen to go up and you end up buying a home in this time frame, then you are guaranteed the rate you were originally pre-approved for, not the higher rate at the time. Also, if rates happen to fall in this period, you will get the lower rate.
Getting pre-approved is a fast and easy process with no cost and no obligation. Although having a written pre-approval holds the rate for you, it is not guaranteeing you the mortgage. Once you have found a property and make an offer, the deal becomes live and will be sent in for approval. Final approval is based on satisfying special requirements like employment verification, down payment (if you have one) etc., so always make sure to put subject to financing in the mortgage contract just in case.
Make sure you deal with a professional who specializes in residential mortgages. The mortgage industry is extremely complicated with hundreds of options and choices. Using an expert can make the difference between getting into a home or your choice or having to rent forever and paying off someone else’s mortgage!
Wednesday, March 7, 2007
Avoid The Most Common Mortgage Obstacles
How To Avoid The Most Common Mortgage Obstacles
Buying a home should be a rewarding and enjoyable process, but only if you're prepared and know how to avoid the most common home financing mistakes.
● Get pre-approved
Pre-approvals are one of the easiest ways for home buyers to start off on the right foot. A pre-approval takes very little time and helps buyers establish a maximum spending limit. With that information, they can shop with confidence knowing what they can offer on a property. It isn’t necessary to use the whole pre-approved amount.
● Know how long things take
Some steps in the home-buying process can’t be rushed and others need to be researched in advance. For example, you should have a real estate agent, lawyer and mortgage lender well in advance of making an offer. And some documentation may take time to gather and prepare.
● Know your options
There are lots of mortgages, each with unique features. Investigate alternatives ahead of time so you don’t have to make a rush decision later. The pre-approval meeting is usually a good time to gather information and start exploring options.
● Come prepared
Ask your mortgage representative for a list of all the documentation you’ll need and plan to get it well in advance. For example, you’ll need confirmation of your income and down payment, the MLS® listing and more. You will also need a copy of the Agreement of Purchase and Sale.
● Ask for a list of closing costs
Closing costs are all the legal and administrative charges that accompany any real estate transaction. The most common are lawyer’s fees and land transfer taxes. And in some cases, home buyers are asked to reimburse the seller for prepaid property taxes or other household expenses.
- Courtesy of TD Canada Trust www.tdcanadatrust.com.
Buying a home should be a rewarding and enjoyable process, but only if you're prepared and know how to avoid the most common home financing mistakes.
● Get pre-approved
Pre-approvals are one of the easiest ways for home buyers to start off on the right foot. A pre-approval takes very little time and helps buyers establish a maximum spending limit. With that information, they can shop with confidence knowing what they can offer on a property. It isn’t necessary to use the whole pre-approved amount.
● Know how long things take
Some steps in the home-buying process can’t be rushed and others need to be researched in advance. For example, you should have a real estate agent, lawyer and mortgage lender well in advance of making an offer. And some documentation may take time to gather and prepare.
● Know your options
There are lots of mortgages, each with unique features. Investigate alternatives ahead of time so you don’t have to make a rush decision later. The pre-approval meeting is usually a good time to gather information and start exploring options.
● Come prepared
Ask your mortgage representative for a list of all the documentation you’ll need and plan to get it well in advance. For example, you’ll need confirmation of your income and down payment, the MLS® listing and more. You will also need a copy of the Agreement of Purchase and Sale.
● Ask for a list of closing costs
Closing costs are all the legal and administrative charges that accompany any real estate transaction. The most common are lawyer’s fees and land transfer taxes. And in some cases, home buyers are asked to reimburse the seller for prepaid property taxes or other household expenses.
- Courtesy of TD Canada Trust www.tdcanadatrust.com.
Sunday, March 4, 2007
Mortgage "SMARTS" Can Save You Money
If you are shopping for a house, you may have heard of some new mortgage products on the market, with amortization periods of up to 30, 35 and 40 years. While they can mean an attractive smaller monthly payment, you should be aware of the potential consequences - such as the amount of interest you would have to pay, over the years.
Do the math and know your options before signing a mortgage contract
The Financial Consumer Agency of Canada (FCAC) recently released an update to its suite of on-line mortgage tools. FCAC's mortgage qualifier calculator and mortgage payment calculator are designed to help consumers determine, first, if they qualify for a mortgage - given their current income level and debt load
- and then how to calculate their optimum schedule of payments. FCAC's mortgage calculator can show you how many years and how much money you can save by making pre-payments on your mortgage.
These tools, together with the Agency's FCAC's on-line mortgage quiz and its publication The ABC's of Mortgages, can help you better understand your rights and responsibilities as a consumer, as well as the terms and conditions associated with the different mortgage products that are available.
Despite knowing the extra costs involved, you may still have a good reason to opt for a 30- or 40-year mortgage product. A longer amortization period may be the only way you can afford a house in today's expensive housing market. However, if you are thinking about a long-term mortgage, you should consider making accelerated bi-weekly payments. By doing so, you can save tens or even hundreds of thousands of dollars in interest over the years.
You can find more information on mortgages by consulting FCAC's Frequently Asked Questions (FAQ) database, which contains answers to a number of mortgage-related questions - from penalty calculations, to insurance products, to interest rates. To view the Frequently Asked Questions, visit the Agency's Web site at: www.fcac.gc.ca and go to the "For Consumers" section.
To obtain a free copy of The ABC's of Mortgages, call FCAC, toll-free, at:
1-866-461-3222 or visit their website at www.fcac.gc.ca.
FCAC is a federal government agency that protects consumers' rights and provides them with information about the financial products and services. - News Canada
Do the math and know your options before signing a mortgage contract
The Financial Consumer Agency of Canada (FCAC) recently released an update to its suite of on-line mortgage tools. FCAC's mortgage qualifier calculator and mortgage payment calculator are designed to help consumers determine, first, if they qualify for a mortgage - given their current income level and debt load
- and then how to calculate their optimum schedule of payments. FCAC's mortgage calculator can show you how many years and how much money you can save by making pre-payments on your mortgage.
These tools, together with the Agency's FCAC's on-line mortgage quiz and its publication The ABC's of Mortgages, can help you better understand your rights and responsibilities as a consumer, as well as the terms and conditions associated with the different mortgage products that are available.
Despite knowing the extra costs involved, you may still have a good reason to opt for a 30- or 40-year mortgage product. A longer amortization period may be the only way you can afford a house in today's expensive housing market. However, if you are thinking about a long-term mortgage, you should consider making accelerated bi-weekly payments. By doing so, you can save tens or even hundreds of thousands of dollars in interest over the years.
You can find more information on mortgages by consulting FCAC's Frequently Asked Questions (FAQ) database, which contains answers to a number of mortgage-related questions - from penalty calculations, to insurance products, to interest rates. To view the Frequently Asked Questions, visit the Agency's Web site at: www.fcac.gc.ca and go to the "For Consumers" section.
To obtain a free copy of The ABC's of Mortgages, call FCAC, toll-free, at:
1-866-461-3222 or visit their website at www.fcac.gc.ca.
FCAC is a federal government agency that protects consumers' rights and provides them with information about the financial products and services. - News Canada
Friday, December 15, 2006
Bank decline funds in 8 days
Tonight I was able to take a tour of a home that a young couple purchased. They have three young children and their new home is much larger then what they previously had. The financing fell through with the local bank and I was able to get financing approved and the deal funded in 8 days through a lender that deals only through the mortgage broker channel. It is so rewarding seeing families move into their own homes and being able to take a part in helping them realize this. - "Money can buy a house - but it can't buy a home"
Wednesday, December 13, 2006
Recently Genworth Financial Canada announced it's Cash-Out Refinance Program. Borrowers can take equity out of their homes for a variety of purposes, including debt consolidation, renovations, or combining a first and second mortgage. One of the advantages of this program is that it allows loan-to-value (LTV) up to 95% LTV on 1-2 unit properties.
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