Saturday, 30 March 2013
Sunday, 17 March 2013
"What's your best rate?"
"What's your best mortgage rate?" This is the million dollar question... or is it? I am asked this everyday, my response is "What is your mortgage strategy?" Most people are thrown off by this response as they do not have a mortgage strategy. The truth of the matter is that there are so many different mortgage rates and products that without developing an in depth personal mortgage strategy we really don't know what the best rate is for you and your mortgage plan.
Are you purchasing your first home?
Tailoring a mortgage to a client's needs is something many mortgage professionals do not do enough of. As a Mortgage Advisor it is my commitment to discuss all your mortgage options, and answer all your questions and concerns.
The lowest rate says nothing about the quality of the mortgages and the service provided, your ability to qualify or the support you can expect with a given rate. Keep in mind, most deeply discounted rates come with little service or mortgage planning. If you want someone who takes time to carefully review your best alternatives and warn you of lender restrictions, and be available for your mortgage needs before, during and after the mortgage process it is rational to pay 5-10 basis points extra for that service (2.99% instead of 2.89% for example). That difference is minimal when you need the right advice, because bad mortgage selection will balloon your cost of borrowing after closing.
Are you purchasing your first home?
Are you refinancing an existing home? Are you going to sell this home within the next 3-5 years?
Are you renovating your home?
Are you consolidating debt?
Do you own an investment property?
Do you need cash back?
Tailoring a mortgage to a client's needs is something many mortgage professionals do not do enough of. As a Mortgage Advisor it is my commitment to discuss all your mortgage options, and answer all your questions and concerns.
The lowest rate says nothing about the quality of the mortgages and the service provided, your ability to qualify or the support you can expect with a given rate. Keep in mind, most deeply discounted rates come with little service or mortgage planning. If you want someone who takes time to carefully review your best alternatives and warn you of lender restrictions, and be available for your mortgage needs before, during and after the mortgage process it is rational to pay 5-10 basis points extra for that service (2.99% instead of 2.89% for example). That difference is minimal when you need the right advice, because bad mortgage selection will balloon your cost of borrowing after closing.
Get Pre-Approved Today
Considering buying a house? Perhaps you want to upgrade to a new larger home. Ever think about a second home, cottage or investment property? Your first step is getting pre-approved to find out what you can afford.
If you’re thinking about buying your first house, one of the first questions you may ask yourself is, “How much can I afford?” Read the following mortgage affordability tips before you set out to find the home of your dreams:
Consider your annual household income. This is a key factor when determining how much of a mortgage you can afford. In addition to calculating your annual household income, consider any income changes that may impact your ability to make your payments. For example, if there are currently two major income sources within your household, would you still be able to afford your mortgage if one was removed? What if a child comes into the picture and your partner decides to become a stay-at-home parent? Consider all factors before deciding.
Consider your down payment. Currently, you are required to have at least a 5% down payment when buying a house. The size of your down payment is one factor in determining the size of mortgage you can afford.
Consider your debt. When determining “How much can I afford?” one of the other important factors to take into account is the amount of debt you currently have. The lower your debt-to-income ratio, the more money you’ll likely have to put towards your mortgage. In addition, your debt level will also help to determine how large of a mortgage you will qualify for.
Consider your amortization period. If you are simply trying to keep your regular mortgage payments low in order to comfortably fit the payment into your budget, you will probably want to apply for a mortgage with a longer amortization period. However, if you don’t mind a somewhat larger regular mortgage payment in order to save money on interest in the long run, you may want to consider a shorter amortization period.
Consider your closing costs. Closing costs are an often overlooked expense that will definitely help determine how much money you can afford as a down payment.
Consider your property taxes, various types of homeowner’s insurance such as damage, title etc and additional expenses. Lastly, there are a few additional expenses that may impact how much money you have to put towards your mortgage each month. Expenses like property taxes, homeowner’s insurance and even things like home maintenance should be factored in before making your final decision. These costs are often overlooked but should be considered before settling on the home of your dreams.
An experienced mortgage professional helps you answer the question “How much can I afford?”
Buying a home is a big financial decision. When you start out by knowing what mortgage you can comfortably afford and what houses fit into your price range, you will be prepared to find the ideal house for
your situation.
Get pre-approved today 1-866-890-9066
If you’re thinking about buying your first house, one of the first questions you may ask yourself is, “How much can I afford?” Read the following mortgage affordability tips before you set out to find the home of your dreams:
Consider your annual household income. This is a key factor when determining how much of a mortgage you can afford. In addition to calculating your annual household income, consider any income changes that may impact your ability to make your payments. For example, if there are currently two major income sources within your household, would you still be able to afford your mortgage if one was removed? What if a child comes into the picture and your partner decides to become a stay-at-home parent? Consider all factors before deciding.
Consider your down payment. Currently, you are required to have at least a 5% down payment when buying a house. The size of your down payment is one factor in determining the size of mortgage you can afford.
Consider your debt. When determining “How much can I afford?” one of the other important factors to take into account is the amount of debt you currently have. The lower your debt-to-income ratio, the more money you’ll likely have to put towards your mortgage. In addition, your debt level will also help to determine how large of a mortgage you will qualify for.
Consider your amortization period. If you are simply trying to keep your regular mortgage payments low in order to comfortably fit the payment into your budget, you will probably want to apply for a mortgage with a longer amortization period. However, if you don’t mind a somewhat larger regular mortgage payment in order to save money on interest in the long run, you may want to consider a shorter amortization period.
Consider your closing costs. Closing costs are an often overlooked expense that will definitely help determine how much money you can afford as a down payment.
Consider your property taxes, various types of homeowner’s insurance such as damage, title etc and additional expenses. Lastly, there are a few additional expenses that may impact how much money you have to put towards your mortgage each month. Expenses like property taxes, homeowner’s insurance and even things like home maintenance should be factored in before making your final decision. These costs are often overlooked but should be considered before settling on the home of your dreams.
An experienced mortgage professional helps you answer the question “How much can I afford?”
Buying a home is a big financial decision. When you start out by knowing what mortgage you can comfortably afford and what houses fit into your price range, you will be prepared to find the ideal house for
your situation.
Get pre-approved today 1-866-890-9066
Sunday, 10 March 2013
Service vs. Rate
Canadians today are savvy and educated when it comes to shopping for mortgage financing. Healthy competition is good for any industry and great for Canadians as a whole because it gives us multiple options to choose from. But how do you decide which financial institution to finance your mortgage with?
Most banks, brokers and mortgage lenders offer similar rates and products that range from 10+ basis points (0.10%.) For example as of the writing of this post, a 5 year fixed rate mortgage ranges from 3.29%-2.99%. You may may shop around to different lenders until you find the lowest rate, but a word of caution, make sure you are getting the right advice and service from your mortgage professional.
Ask your mortgage professional the following questions;
What are my pre-payment options?
Ensure that you are being informed on your pre-payment costs. A lower rate or discount mortgage may be great but you also may have very limited pre-payment options, or the mortgage can be locked for the full term meaning it cannot be paid out.
How are penalties calculated and applied?
Make sure that your aware of any penalties by paying the mortgage off early. Is the penalty 3 months of interest. Interest rate differential? Can the mortgage be paid out mid term or only from a bona fide sale?
Can I port or transfer my mortgage?
Ensure that you know if you can port your mortgage to another property without being charged a penalty during the term of the mortgage.
Is my mortgage standard charge or collateral?
Get clarification if the mortgage charge is standard or collateral. See my post on collateral vs. standard charge mortgages.
http://drmortgages.blogspot.ca/2013/02/collateral-vsstandard-charge-mortgages.html
Does my mortgage lender have a local branch?
This in my professional opinion is one of the most important factors when deciding where to place your mortgage. A lot of mortgage brokers will place your mortgage with a lender that may be located in another province altogether. This means the only way you can get assistance and proper service is via phone or email. It can be very frustrating if you have an issue, problem or concern with your mortgage and the only means of contact to get resolution is by phone or email. However if your lender has a physical branch located in your community, it's much easier to walk into the branch and get direct personal service, and you are more likely to get your concern addressed and resolved immediately.
To put this into perspective take for example a $200,000 mortgage amortized over 25 years at a 5 year rate of 3.09% and 2.99%. The difference in the monthly payment is $10.28 or thirty four cents a day. Would you pay thirty four cents a day for the peace of mind, knowing that if you have a concern you can have it addressed right away by your local branch personally and not have the headache of problem resolution over the phone?
I have new clients come to me constantly who want to switch their mortgage for this reason and this reason only. They have stated that they would gladly pay a slightly higher rate to get the better service of a local branch presence.
Most banks, brokers and mortgage lenders offer similar rates and products that range from 10+ basis points (0.10%.) For example as of the writing of this post, a 5 year fixed rate mortgage ranges from 3.29%-2.99%. You may may shop around to different lenders until you find the lowest rate, but a word of caution, make sure you are getting the right advice and service from your mortgage professional.
Ask your mortgage professional the following questions;
What are my pre-payment options?
Ensure that you are being informed on your pre-payment costs. A lower rate or discount mortgage may be great but you also may have very limited pre-payment options, or the mortgage can be locked for the full term meaning it cannot be paid out.
How are penalties calculated and applied?
Make sure that your aware of any penalties by paying the mortgage off early. Is the penalty 3 months of interest. Interest rate differential? Can the mortgage be paid out mid term or only from a bona fide sale?
Can I port or transfer my mortgage?
Ensure that you know if you can port your mortgage to another property without being charged a penalty during the term of the mortgage.
Is my mortgage standard charge or collateral?
Get clarification if the mortgage charge is standard or collateral. See my post on collateral vs. standard charge mortgages.
http://drmortgages.blogspot.ca/2013/02/collateral-vsstandard-charge-mortgages.html
Does my mortgage lender have a local branch?
This in my professional opinion is one of the most important factors when deciding where to place your mortgage. A lot of mortgage brokers will place your mortgage with a lender that may be located in another province altogether. This means the only way you can get assistance and proper service is via phone or email. It can be very frustrating if you have an issue, problem or concern with your mortgage and the only means of contact to get resolution is by phone or email. However if your lender has a physical branch located in your community, it's much easier to walk into the branch and get direct personal service, and you are more likely to get your concern addressed and resolved immediately.
To put this into perspective take for example a $200,000 mortgage amortized over 25 years at a 5 year rate of 3.09% and 2.99%. The difference in the monthly payment is $10.28 or thirty four cents a day. Would you pay thirty four cents a day for the peace of mind, knowing that if you have a concern you can have it addressed right away by your local branch personally and not have the headache of problem resolution over the phone?
I have new clients come to me constantly who want to switch their mortgage for this reason and this reason only. They have stated that they would gladly pay a slightly higher rate to get the better service of a local branch presence.
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