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!
Showing posts with label first time homebuyer. Show all posts
Showing posts with label first time homebuyer. Show all posts
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
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"
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