tag:blogger.com,1999:blog-30439725937265451642024-02-18T20:22:49.382-08:00Dial M for MortgageMortgage options for British Columbia. Better Advice, More Choice, and Peace of MindAnonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-3043972593726545164.post-42421390438540212062017-05-18T11:34:00.001-07:002017-05-18T11:34:34.628-07:00Deposit on a Home PurchaseMany people don't have thousands of dollars in the bank to make a deposit for the purchase of a home. The deposit forms part of the down payment. The problem for many people is that they need to sell their current home first to get the down payment.<br />
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The deposit is made upfront upon subject removal even though they might not own their new home for a couple of months! In the meantime, they have not received money for the sale of their current home; and they were planning on using the equity in their home to make the down payment including the deposit. Don't ran away screaming....there is a way out!<br />
<br /><b>Solution: a deposit loan.</b><br /><br />*One of the deposit loans that I offer is very simple.<br /><br />Flat fees only, no extra interest.<br /><br />Loan size:<br />Up to $25 000 cost $500<br />$25 000 - $50 000 cost $750<br />$50 000 + cost $1000<br />
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If you own your own home and want to move, don't let the deposit be a barrier. Give me a call with no obligation.<br />
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There are so many things to think about when you want to sell your home and purchase a new one! In working with a good mortgage broker and a good realtor, you don't have to think of everything yourself. A strong team will makes things possible!<br />
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*Fees are subject to change without notice and subject to conditions.<br /><br />Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-72859563866984900372017-04-26T13:58:00.000-07:002017-04-26T13:58:17.961-07:00What Every Home Buyer NeedsThe best mortgage service that a new buyer can get is a full mortgage pre-qualification, and preparation process. The term "pre-approval" is often used to describe this process but the term "pre-approval" is misleading, and the pre-approval process needs to be sharpened for a competitive real estate market.<br />
<br />1. A pre-approval can give a buyer a false sense of security. Some online pre-approval applications don't require full disclosure from the applicant. The borrower might be able to get a rate hold, but the rest of the application is not really of value.<br /><br />2. Many pre-approvals don't require supporting documents from the borrower. Documents are only required after the buyer has made an accepted offer. This does not set up the buyer for highest possible chance of success in the purchasing process. An example of the importance of upfront document collection was a client who had to request a job letter three times from her employer to get the correct letter for her mortgage. In a competitive real estate market, delays in getting documents can really hold a buyer back.<br />
<br />3. Some pre-approvals don't qualify for the maximum mortgage allowed. Sometimes there are more options available when the deal goes "live" - meaning you have made an accepted offer. A simple pre-approval does not necessarily give you all of the information that you need. A comprehensive pre-qualification process will give you the information you need.<br />
<br />4. Many buyers don't qualify for a pre-approval because their mortgage will be in the Alt-A mortgage category where there are no pre-approvals. Since the new mortgage rules came into affect, over the last few months, more people are in the Alt-A category. There are slightly higher rates in Alt-A and slightly easier rules. A pre-qualification process is designed to explore many options.<br />
<br />A better system:<br />
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A home buyer gets a final pre-qualification based on supporting documents. The documents (job letter, pay stub etc.) ensure accurate numbers. All mortgage types are explored because different types of mortgage can alter decisions.<br />
<br />When the pre-qualification process is done, a rate hold can be obtained. A rate hold is what is often called a pre-approval. And it does what it sounds like it does. It holds an interest rate for you even if interest rates are rising. Most often a better mortgage can be obtained when the deal is live. The rate hold is just a back up plan in my opinion.<br /><br />There is no doubt that "pre-approval" is the language that buyers are used to. It is an effective word used in advertising and is a hook! However, a home buyer is better off with a full pre-qualification and preparation process.<br /><br /><span style="font-family: arial,helvetica neue,helvetica,sans-serif;">Better Advice, More Choice, and Peace of Mind!<br />Remember M for Mortgage! </span><br /><br />
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Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-721276658996975772017-04-21T08:08:00.000-07:002017-04-21T08:08:00.136-07:00Financing a Home Renovation<span style="font-family: inherit;">The cost of renovations of a home are often better bundled into a mortgage rather than paying the high interest rates of a consumer loan. It sounds straight forward?</span><br />
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<span style="font-family: inherit;">Yes, but you need a to know your full mortgage options.</span><br />
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Real life example:<br />
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<span style="font-family: inherit;">I am currently arranging a renovation mortgage for clients whom I assisted two years ago when they bought their first house. They recently approached me asking for a refinance. A refinance would involve breaking the old mortgage and paying the penalty and then getting a new mortgage with a higher balance. Before proceeding with their request, we explored all options first. </span><br />
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<span style="font-family: inherit;">1. The refinance they originally requested would involve over $6000 in penalty costs; and the new mortgage would be at a slightly higher rate than the original mortgage. This option is doable and while there are costs, it is still reasonable.</span><br />
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<span style="font-family: inherit;">2. A second mortgage at 3.8% fixed rate would be a better option. They would not have the penalty to pay because they would leave the first mortgage intact. The rate is excellent for a second mortgage and because the amount they need for the renovation is about $50 000, the slightly high rate would not cost them a lot in dollars.</span><br />
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<span style="font-family: inherit;">3. A second mortgage as a home line of credit was my recommendation. The rate worked out to be 3.2% (P=0.5%) and the great thing is that they only borrow money as they need it. For example, if stage one of the renovation costs $10 000, then they will only withdraw $10 000 from the line of credit until they need more. The line of credit is also larger than their anticipated costs. This gives them the opportunity to access the line of credit if they decide to do other renovations in years ahead.</span><br />
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<span style="font-family: inherit;">Not surprising, the clients agreed that option three was their choice. They were not aware that they had this choice before doing our consultation.</span><br />
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<span style="font-family: inherit;">The beauty of the process is that at no point were these home renovators pressured into doing anything. Making an inquiry to have your mortgage options explored, can only be beneficial. </span><br />
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<span style="font-family: inherit;">Better Advice, More Choices and Peace of Mind!</span>Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-44993122270780042452017-03-06T10:04:00.000-08:002017-03-06T10:04:31.148-08:00Seismic Shifts in Mortgage MarketThe last 6 months have seen seismic shifts in how Canadian mortgages are done. This follows a period of about 8 years of almost continuous tightening of mortgage guidelines. The public has generally only known the tip of the iceberg of these changes.<br />
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<b>3 Big-Picture Shifts</b><br />
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1. <span style="color: blue;">Your proof of income is more important than ever.</span> Long gone is the option to qualify without proof of income if the applicant had 35% down payment. Added to that is the recent introduction of the stress test. The stress test ensures that applicants have <u>more</u> than enough income to qualify for their mortgage.<br />
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2. <span style="color: blue;"> The rate of interest now depends heavily upon the down payment size.</span> Surprisingly, a person with 5% down payment will often get a smaller rate than a person with 20% down payment! And the person with 25% down payment will get a smaller rate than the person with 20% down payment, but probably not as small as the person paying 5% down payment. Determining interest rate will be even more complicated than that, but the examples give you an idea.<br />
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3. <span style="background-color: white; color: blue;">Credit Score is emphasized more in determining interest rate.</span><br />
High Score = Lower Interest Rates<br />
Low Score = Higher Interest Rates<br />
Rates have always been influenced by credit scores, but moving forward, the credit scores will play an even bigger influence upon interest rate at the individual level.<br />
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Complicated? Absolutely! <br />
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The whole process can be made easier with a trusted guide. It is the job of the mortgage broker to guide you through this maze to get you the best mortgage possible with your unique circumstances.<br />
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Please feel at ease to give me a call to have a confidential discussion about your mortgage options.<br />
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<br />Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-68936608580471953992017-02-16T21:29:00.000-08:002017-02-16T21:29:16.974-08:00Credit Check Primer
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<span style="font-size: 14pt; line-height: 107%; margin: 0px;">An important
part of a successful mortgage application is the credit check.</span></div>
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<span style="font-size: 14pt; line-height: 107%; margin: 0px;">A credit
check is a report from one of the credit bureaus in Canada – either Equifax or
Transunion.<span style="margin: 0px;"> </span>The report lists a person’s <u>debts</u>
and <u>monthly payments</u>.<span style="margin: 0px;"> </span>The report
includes</span></div>
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<span style="font-family: Symbol; font-size: 14pt; line-height: 107%; margin: 0px;"><span style="margin: 0px;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;"> </span></span></span><span style="font-size: 14pt; line-height: 107%; margin: 0px;">credit cards, </span></div>
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<span style="font-family: Symbol; font-size: 14pt; line-height: 107%; margin: 0px;"><span style="margin: 0px;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;"> </span></span></span><span style="font-size: 14pt; line-height: 107%; margin: 0px;">lines of credit, </span></div>
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<span style="font-family: Symbol; font-size: 14pt; line-height: 107%; margin: 0px;"><span style="margin: 0px;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;"> </span></span></span><span style="font-size: 14pt; line-height: 107%; margin: 0px;">student loans</span></div>
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<span style="font-family: Symbol; font-size: 14pt; line-height: 107%; margin: 0px;"><span style="margin: 0px;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;"> </span></span></span><span style="font-size: 14pt; line-height: 107%; margin: 0px;">personal loans</span></div>
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<span style="font-family: Symbol; font-size: 14pt; line-height: 107%; margin: 0px;"><span style="margin: 0px;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;"> </span></span></span><span style="font-size: 14pt; line-height: 107%; margin: 0px;">car loans</span></div>
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<span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">A credit report will also have a
score based on how well a person has managed their debts.</span></div>
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<span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">Please be prepared to discuss
your credit history with your mortgage broker in the first
meeting. You don't need a credit check in advance, but be prepared
to discuss your overall credit situation. The discussion is confidential
and it is critical to helping you be successful in buying your home. </span></div>
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<span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">The mortgage broker will tell you
the impact of your credit history. If everything is good, you will be
confident in making an offer for a home. If you had some difficulties
with your credit history, the mortgage broker can strategize with you to
overcome the issue. Credit reports are complicated, and you will benefit
from professional analysis.</span><span style="color: #333333; font-family: "Arial",sans-serif; font-size: 9pt; margin: 0px;"><br />
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</span><span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">The two credit bureaus in Canada are Equifax and TransUnion.
For your reference you can go online to </span><a href="http://www.equifax.ca/"><span style="color: #0563c1; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">www.equifax.ca</span></a><span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;"> and </span><a href="http://www.transunion.ca/"><span style="color: #0563c1; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">www.transunion.ca</span></a><span style="color: black; font-family: "Calibri",sans-serif; font-size: 14pt; margin: 0px;">.</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-19266968106494460472016-12-12T10:17:00.000-08:002016-12-12T10:17:37.512-08:00Buying a Home in WinterMost people don't want to buy real estate in the dead of winter. There are many people who are going to buy "in the spring". This attitude makes May the busiest month in real estate. As a buyer you really want to avoid the time when everybody else wants to buy!<br />
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<b>Consider buying in the winter!</b> <br />
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Winter in the Vancouver area is dark and wet! If you like a home in the middle of dreary January, then it is almost guaranteed you will like that home even more in the pretty month of May.<br />
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Here are some advantages:<br />
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1. Home sellers in January are likely serious sellers. Many realtors advise their clients to sell in the brisk spring market to attract top dollar. Therefore, the sellers that insist on selling in winter are very serious sellers. Not only might they be more flexible on price but they might also be more flexible on other terms of the sale such as possession date or subject removal date.<br />
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2. There is a reduced chance of a buyer competing in a multiple offer situation during the slow months on the year.<br />
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3. Often prices rise in the spring.<br />
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4. The process of getting a full approval from a mortgage lender will be quicker in January when business is slower. This reduces a buyer's stress.<br />
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5. Your realtor might be less busy and be able spend more time with you.<br />
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One bit of advice about looking for a home in the wet and cold winter months: wear shoes or boots that easily slip on and off. It will make the process of viewing homes all the more enjoyable.<br />
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Your first step in the real estate process is to get pre-qualified for a mortgage. Even if you don't end up buying until the spring, a pre-qualification will have you good and ready for the competitive spring market. Give me a call and we can discuss the best rates for you.Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-35568718915582174712016-11-25T09:45:00.004-08:002016-11-25T10:55:21.291-08:00Bah Humbug to Black Friday!<span style="font-family: "trebuchet ms" , sans-serif;">Over the holiday season, many Canadians feel pressure to
spend money. </span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;">
However, i</span></span><span style="font-family: "trebuchet ms" , sans-serif;">t is not uncommon for people these days to be under financial
stress.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">Instead of waiting until January
to face reality, I would love to see people take charge now.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><br />
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<span style="margin: 0px;"></span><span style="font-family: "trebuchet ms" , sans-serif;">On this Black Friday when our consumer
society encourages us to spend more money, I say “Bah Humbug!!"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"></span><br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Give yourself a different kind of Christmas gift – the gift
of some peace of mind.</span><br />
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<span style="font-family: "trebuchet ms" , sans-serif;">Problems to address include:</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<span style="font-family: "calibri";"><span style="font-family: "trebuchet ms" , sans-serif;">Paying off Canada Revenue Agency! It would be good to get them off your back!</span></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;">High balances on credit cards</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;">Collectors after you</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;">Bruised credit.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;">A feeling of being overwhelmed with financial stress</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<span style="font-family: "trebuchet ms" , sans-serif;">The first steps in debt payment plans will be different for everybody.</span></div>
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<li><div style="margin: 0px 0px 13px;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;">If you have some bad spending habits but are not too far into debt, you are in a good position. Take charge now. If you need a money coach, that might be money well spent. </span></span></span></div>
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<li><div style="margin: 0px 0px 13px;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;">If your situation is more serious and </span></span></span><span style="font-family: "trebuchet ms" , sans-serif;">you
own your home, you might be able to refinance,
or get a second mortgage.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">There are
different ways to structure a refinance.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">It is not
something that you should navigate on your own.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;">
</span></span><span style="font-family: "trebuchet ms" , sans-serif;">An independent mortgage broker can strategize with you and look at options from
different lenders.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">Your objectives of
saving money, increasing your cash flow and minimizing your stress will be part
of the plan. A broker can often overcome bruised credit as well.</span></div>
</li>
<li><div style="margin: 0px 0px 13px;">
<span style="font-family: "trebuchet ms" , sans-serif;">Another option is to see a debt consultant.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;">
</span></span><span style="font-family: "trebuchet ms" , sans-serif;">I interviewed a friend of mine who is a debt consultant.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">He explained that as </span><span style="font-family: "trebuchet ms" , sans-serif;">an
independent debt consultant he works entirely on his client’s behalf.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">He does not work on behalf of a financial institution.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">As a mortgage broker I completely agree that
clients are best served by independent advisors who are not affiliated with one company
or another.</span></div>
</li>
</ol>
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<span style="font-family: "trebuchet ms" , sans-serif;">Knowing your options and addressing the problems of debt is a great way to spend the holiday season. Sounds like Scrooge, but what the heck!</span></div>
<span style="font-family: "trebuchet ms" , sans-serif;">Now is the time to seek professional advice.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">And remember to say "Bah Humbug to Black
Friday!".</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"></span><br />
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<span style="font-family: "trebuchet ms" , sans-serif;">Call now to find out your options.</span><span style="margin: 0px;"><span style="font-family: "trebuchet ms" , sans-serif;"> </span></span><span style="font-family: "trebuchet ms" , sans-serif;">And then decide.</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-60403224731954906382016-11-15T20:35:00.005-08:002016-11-16T09:04:58.276-08:00What's Your Best Mortgage Rate?Please do ask me "What is your best rate?". Of course you want to know the best rate that a mortgage broker can offer. You want to save money!<br />
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It is an interesting question these days, partly because a mortgage broker can refer to different lenders who have slightly different rates. But there are many more things that affect the best rate <u>you</u> can get. Think of a mortgage rate as an individualized rate tailored to you.<br />
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List of things that may affect <u>your </u>mortgage interest rate:<br />
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The size of your down payment<br />
How well you can prove your income (for example are you self employed or do you get bonuses?)<br />
Whether your mortgage is for an investment property or for a property that you will live in<br />
Whether you are purchasing a home or refinancing a home<br />
Your credit score<br />
Whether you want to have a line of credit attached to your mortgage<br />
The terms for paying down your mortgage early<br />
The size of your mortgage<br />
The length of your amortization<br />
The condition of your property (is it a former grow-op?....before you bought it of course)<br />
The weather (well not that one....yet)<br />
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You are best served by having a thorough discussion with a qualified mortgage broker to find out what is <u>your</u> best rate.<br />
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Moral of the story: Pick up the phone and ask "What is the best rate for my circumstances?". Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-17241468172884773422016-10-27T21:18:00.002-07:002016-11-16T09:26:42.945-08:006 Reasons to Get a Pre-ApprovalThere are a few good reasons why a pre-approval is an excellent first step when looking for a home.<br />
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1. Know your financial limits. Buying a home requires both your head and your heart. You might qualify for more money than you should be spending. For example, if you have high daycare costs, then it is prudent not to buy the maximum loan amount that you qualify for. By getting your per-approval done BEFORE falling in love with a home, you will more likely stay within your budget. <br />
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2. Going through the process of a pre-approval begins your education process. You don't want to be overwhelmed by buying a home. If you approach the financial side of things first, you are breaking the process into manageable pieces. Mortgage options can be complex and you want to consider your options without the emotions that happen after looking at homes.<br />
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3. A pre-approval might help you get your financial house in order. For example, the process might reveal a mistake on your credit report. You are better off dealing with that upfront. You might also be trying to decide between paying off a car loan versus putting the money towards the down payment. By going through the pre-approval process the better choice will become clear.<br />
<br />
4. Nobody likes paper work - well except Revenue Canada! In the pre-approval process you will be required to get your papers in order. Often the most onerous set of papers includes proof of the source of down payment. It is best to get this sorted beforehand and avoid stress later on.<br />
<br />
5. The pre-approval sets up the relationship with the mortgage broker, realtor and possibly the lawyer/notary. To ensure a smooth home buying process you want to have your team assembled and working together on your behalf. The truth is that most realtors won't go to the next step until you have a pre-approval anyway.<br />
<br />
6. A pre-approval holds an interest rate for you. If rates go up, you are still safe with the lower rate. If rates go down, then you can get the lower rate. You can only win with a pre-approval.Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-88765115480439746332016-10-21T22:05:00.001-07:002016-10-22T20:16:46.973-07:005 Rules to a Successful Refinance for Debt ConsolidationLife happens and sometimes debt is unavoidable. And at other times we make mistakes and place ourselves in debt - with regret. Regardless of how you got into debt, the important thing is to not ignore the problem. Managing your situation is very important.<br />
<br />
A few rules to follow:<br />
<br />
1. When you can't cover all of your expenses, prioritize your mortgage payments if possible. It will matter when you try to refinance later on.<br />
<br />
2. Pay the minimum payments on your credit card if you can, even if you can't pay the full balance.<br />
<br />
2. If your debts are piling up due to a marital break down, protect yourself by creating separate accounts if possible. For example, sharing a line of credit could lead to trouble. Contact your lender to change the terms of a line of credit.<br />
<br />
4. If you have equity in your home, speak with a mortgage broker about a refinance sooner rather than later. You can choose to not refinance, but know your options first. If you wait until things get really bad before asking for help, you may find yourself facing a mortgage rate well about competitive interest rates. Sadly I see this too often.<br />
<br />
5. Knowledge is power. Be aware that there are a variety of options in a debt consolidation plan if you have equity in your home. I have seen people who have fallen into the trap of believing that there is only one mortgage product available to them. This can result in them getting into an unnecessarily expensive or restrictive product. And a mortgage broker is the person with access to the different options from different types of lenders. 2nd mortgage? Total refinance? CHIP Mortgage? Private Mortgage? You might be surprised on which option is best for you.<br />
<br />
Real client story:<br />
<br />
For a few reasons, the best way to consolidate debt for a recent client was to get a second mortgage. I consulted with a variety of lenders. Second mortgage are more expensive than first mortgages. Rates ranged from 8.5% to 14%. My client was relieved to have me shop around for him to ensure the lowest rate possible.Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-48082832076709561302016-05-12T14:38:00.002-07:002016-05-12T14:38:47.550-07:00Don't Renew! Renegotiate!
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">Everybody wants to save money on their mortgage! </span></div>
<br />
<div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">A new home
buyer is especially diligent when shopping for the best mortgage. </span></div>
<br />
<div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">They make
the effort to:</span></div>
<ul>
<li><div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">find out the options</span></div>
</li>
<li><div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">compare rates and costs</span></div>
</li>
<li><div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">compare flexibility</span></div>
</li>
</ul>
<div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">This home buyer then moves into their new home and their
mortgage becomes something they don’t think about very often. They might have a growing family and an
ambitious career. In the meantime, the
mortgage payments are happening on automatic pilot.</span></div>
<div style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">Eventually their lender sends them a letter to let them know
that their mortgage is coming up for term renewal. That borrower is faced with some decisions to
sort out.</span></div>
<br />
<div style="margin: 0cm 0cm 0pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;"> Should
they do things the “easy” way and sign the offer from their current lender?</span></div>
<br />
<div style="margin: 0cm 0cm 0pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Should they ask their lender for a better rate?</span></div>
<br />
<div style="margin: 0cm 0cm 8pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Should they move their mortgage to another
lender?</span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">The answer? You guessed
it! </span><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Don’t Renew! Renegotiate!</span></b></div>
<br />
<div style="margin: 0cm 0cm 0pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Call your lender and ask them for their best
offer and ask them to send it to you in writing.</span></div>
<br />
<div style="margin: 0cm 0cm 0pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Work with a broker who has access to many different lenders so you can better assess
your options. Even if that broker has
not worked with you before, they can still help you sort out your renewal.</span></div>
<br />
<div style="margin: 0cm 0cm 0pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Have the broker compare options for you including
the option from your current lender.
This analysis will include any possible costs for moving the mortgage
and list possible advantages to moving to another lender.</span></div>
<br />
<div style="margin: 0cm 0cm 8pt 36pt; text-indent: -18pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">4.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Then decide.
It will cost you nothing to ask and it could save you thousands of dollars.</span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">Remember the effort when you first bought
your home? Well you only need a small
fraction of that effort to ensure you get the best mortgage when
renewing your mortgage term. </span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">It is not unheard of to have a mortgage renewal offer of a whopping 1% higher than competitive rates. On a mortgage of $400 000 that would cost
approximately $4000 extra per year! I
have also seen decent renewal offers where it was clear that the client was
fine to stay where they were. </span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<span style="font-family: Calibri;">No matter what your final decision, it pays to consult with
a mortgage broker before you sign the "easy "offer from your current lender. Go ahead and make that call.</span></div>
<br />
<div style="margin: 0cm 0cm 8pt;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-15268498870648770922016-04-20T14:42:00.000-07:002016-04-20T16:10:35.758-07:00Borrowed Down PaymentScenario of a Buyer who did not have enough down payment:<br />
<br />
A client recently got a job promotion and is earning considerably more than she was last year. Her increased income prompted her interest in buying her first apartment. Living in the Vancouver Lower Mainland, she did not want to wait another year to save up for more down payment because she was concerned about rising real estate prices. Plus she wanted to start building equity as soon as possible!<br />
<br />
This client had saved up $8000 but she needed at least $18 750 down payment (5% of $375 000) plus some money for closing costs.<br />
<br />
Solution: She got a line of credit for $15 000 from her bank. With that line of credit, she had enough down payment to purchase her first home plus some money left over.<br />
<br />
She is paying 6% on her line of credit, and therefore she wants to pay it off quickly. Her mortgage interest rate is only 2.49%. With discipline she will pay off her line of credit by the beginning of June 2017. In the meantime she will have already built up over $12 000 of equity in her apartment by paying mortgage rather than rent!<br />
<br />
Borrowing a down payment worked well for this first time buyer. This will work well for many others, but it is not the best strategy for everyone. Some borrowers are better off to save up their down payment in cash. They will qualify for more mortgage money in that situation. It is also important to have a solid repayment plan in place if you borrow your down payment.<br />
<br />
It always important to have a thorough discussion about your options with a qualified mortgage broker. Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-22848447447792566462016-04-05T17:08:00.001-07:002016-04-05T17:08:06.072-07:00The Best Mortgage in a Multiple Offer Situation<!--[if gte mso 9]><xml>
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We have all heard Vancouver real estate stories where there
are 10 offers on one property.<span style="mso-spacerun: yes;"> </span>This
intense real estate market makes it difficult for the average working family to
compete when buying a home.<span style="mso-spacerun: yes;"> </span>There are
ways you can make yourself more competitive.<span style="mso-spacerun: yes;"> </span>If you are one of those people – keep heart
and read on!</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I encourage home buyers to think about the speed of a
particular mortgage lender.<span style="mso-spacerun: yes;"> </span>It is easy
to focus entirely on the best interest rate, but a good strategy takes all
factors into consideration.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
All mortgage lenders have different strengths and go through cycles.<span style="mso-spacerun: yes;"> </span>As a mortgage broker I know which lenders are
particularly speedy at a given time.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Imagine a seller who is considering offers after
a weekend open house.<span style="mso-spacerun: yes;"> </span>All offers are being
viewed on the immediate Tuesday. <span style="mso-spacerun: yes;"></span>That seller has 2 offers in hand:</div>
<br />
<ol>
<li>Subject to finance, subject to be removed in 10 days</li>
<li>Subject to finance, subject to be removed on the immediate Friday (the mortgage application is processed in 3 days). The key is that the subject is to be removed before the upcoming weekend.</li>
</ol>
<br />
<div class="MsoNormal">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span style="mso-spacerun: yes;"> </span>It is obvious that a short turn-around time is more attractive to
the seller!</div>
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<br /></div>
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This strategy will strengthen your application.<span style="mso-spacerun: yes;"> </span>No one can guarantee the speed of 3 days.<span style="mso-spacerun: yes;"> </span>It will depend upon your application. <span style="mso-spacerun: yes;"></span>Thorough preparation in
advance will maximize the possibility of success.</div>
<div class="MsoNormal">
Take heart, and apply this strategy.<span style="mso-spacerun: yes;"> </span>Give me a call and we can set you up for
success!</div>
Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-88568802604573597102015-09-26T08:46:00.000-07:002015-09-26T08:46:27.240-07:00Economic Profile and Interest RatesLast week I was in Whistler attending the Dominion Lending Centres' biannual conference. I had a wonderful time, learned a lot, and got inspired.<br /><br />Dr. Sherry Cooper and David Chilton were 2 of the key note speakers at the conference and I will share with you a few highlights of their speeches.<br /><br />The slow-down in the Canadian economy has been uneven. BC showed the healthiest growth, while Alberta, NewFoundland and Saskatchewan performed the poorest. The Canadian economy has rebounded somewhat.<br /><br />The falling oil prices from about $100 per barrel are largely due to fracking in the US which has resulted in more oil available on the market. Coupled with this is the slow-down in the Chinese economy. Dr. Cooper said it will be a long time before oil prices rise again to the $100 level. She emphasized that the Canadian economy is strongly tied to the price of oil.<br /><br />The US economy is chugging along faster than the Canadian economy. Despite the strengthening economy, the Federal Reserve did not raise interest rates last week due to uncertainty in the global economy. However, at some point soon the Federal Reserve will raise rates. This will mean a further weakened Canadian dollar. Let’s hope that the dollar won’t fall too much lower!<br /><br />Dr. Cooper went on to say that while Canadians have high levels of debt, they also have high levels of net worth. She believes that the net effect is healthy. I am not so sure that I agree with her but I am willing to accept good news.<br /><br />She mentioned that amongst the G7, Canada has the highest rate of home ownership. We are truly a nation that believes in owning the roof over our heads. The rate of home ownership is at about 70%.<br /><br />In discussions with the current government, Dr. Cooper has word that while the government wants to study the issue of foreign investors, they are not prepared to limit foreign ownership as has been stated in the news. Of course, we are in an election time, so predictions for policy are not certain.<br /><br />The best news is that Dr. Cooper predicts a strong real estate market in 2016. And she predicts continued long term low interest rates.<br /><br />You may recognize David Chilton from the Dragon's Den and as the author or the popular books "The Wealthy Barber" and "The Wealthy Barber Returns". One very interesting prediction that he made is that interest rates will remain depressed because of 3D printing. The reason is that it will cost many jobs in manufacturing. He cited the example of our ability to down load a new toilet bowl. The ability to down load a toilet bowl eliminates the manufacturers of toilet bowls. If you multiply the effect of cutting out manufacturing many times, you can see where he is going with the idea. He said we should expect a seismic shift in our economy over the next 5 years. Believe it or not!<br /><br />.Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-59163876294413572692015-08-21T12:44:00.001-07:002015-08-21T13:11:17.980-07:00Value and Cost of 5% Down PaymentIt is common to buy a home with the minimum 5% down payment.*<br />
<br />
The next question is whether you <u>should</u> purchase with just 5% down payment. In many cases it is a good idea, and in others, a higher down payment is better. A common concern with 5% down payment is that you must pay an insurance premium because you have less than 20% down payment. It is best to look at real numbers to judge the value of moving ahead with the insurance costs built-in.<br />
<br />
The one-time insurance fee is added to the mortgage balance so that you don't pay the insurance premium up front. There is a sliding scale to determine how much insurance you must pay. <br />
<br />
Example:<br />
<br />
A buyer purchases an apartment for $400 000. <br />
5% down payment is $20 000.<br />
The mortgage insurance premium is 3.6% of the amount borrowed or $13 680 added to the total mortgage.<br />
The insurance adds $61.90 to the monthly mortgage payment. <br />
The total monthly mortgage payment is $1781.25/month at a rate of 2.59% amortized over 25 years.<br />
<br />
It will take approximately 15 months of paying $1781.25/month to pay off the equivalent of the $13 680 insurance premium. That is a great deal if you consider the amount you are paying in rent during that time - it is likely more than $13 680 over 15 months!<br />
<br />
Also, most people cannot save from 5% down payment to 20% down payment or $60 000 in 15 months to eliminate the insurance premium. Again, during that saving time, you are likely paying hefty rent rather than building equity in your home.<br />
<br />
Based on the numbers I have shown in this blog, 5% is a good option. And indeed it is for many people. However, the decision to buy real estate involves many factors, not just one comparison. This blog gives you some insight, but it is important that you meet with a professional mortgage broker who will strategize with you on <u>your </u>best plan. You can also consider my comments from the <a href="http://dialmformortgage.blogspot.ca/2015/08/20-down-payment-offers-advantages.html">August 15 Blog</a>.<br />
<br />
*Please note that there are many cases where you will be required to pay more than 5% down payment.<br />
<br />Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com0tag:blogger.com,1999:blog-3043972593726545164.post-77721733271989296222015-08-15T19:41:00.002-07:002015-08-15T19:41:42.149-07:0020% Down Payment Offers AdvantagesImportant question made by hone buyers: How much down payment do I need?<br />
<br />
The answer depends on a number of things and each person's situation is unique. This blog entry explains why some buyers save up for 20% down payment.<br />
<br />
You need a minimum of 5% down payment in most cases to buy real estate, but some people save 20% because the mortgage rules change when you increase your down payment from less than 20% to greater than 20% down payment. Let me illustrate by example why 20% down payment offers advantages.<br />
<br />
<o:p><span style="font-family: Calibri;">Purchase Price: $400 000</span></o:p><br />
<o:p><span style="font-family: Calibri;">Interest Rate: 2.69%</span></o:p><br />
<o:p><span style="font-family: Calibri;">Approximately $60 000/yr income to qualify</span></o:p><br />
<br />
<span style="background-color: yellow;">
</span><span style="background-color: yellow;">
</span><span style="background-color: yellow;">
</span><span style="background-color: yellow;">
</span><span style="background-color: yellow;">
</span><br />
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: currentColor; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;">
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<span style="font-family: Calibri;">Down Payment of 19.5% or $78 000<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border-color: windowtext windowtext windowtext rgb(0, 0, 0); border-style: solid solid solid none; border-width: 1pt 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
</td>
<td style="background-color: transparent; border-color: windowtext windowtext windowtext rgb(0, 0, 0); border-style: solid solid solid none; border-width: 1pt 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">Down Payment of 20.5% or $82 000<o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 1;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext; border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">Amortized for 25 years<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">Amortized for 30 years<o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 2;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext; border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">One time default insurance paid <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">and added to mortgage:<span style="mso-spacerun: yes;"> </span>$5700<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">No default insurance payment<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>required<o:p></o:p></span></div>
<span style="background-color: yellow;">
</span></td></tr>
<tr style="mso-yfti-irow: 3; mso-yfti-lastrow: yes;"><td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext; border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><span style="background-color: yellow;">
</span><br />
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;"><span style="background-color: yellow;">Payments of $1500/month<o:p></o:p></span></span></div>
<span style="background-color: yellow;">
</span></td><td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><span style="background-color: yellow;">
</span><br />
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<o:p><span style="background-color: yellow; font-family: Calibri;"> </span></o:p></div>
<span style="background-color: yellow;">
</span></td><td style="background-color: transparent; border-color: rgb(0, 0, 0) windowtext windowtext rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt;" valign="top"><span style="background-color: yellow;">
</span><br />
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;"><span style="background-color: yellow;">Payments of $1285/month</span></span></div>
</td>
</tr>
</tbody></table>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 8pt;">
<o:p><span style="font-family: Calibri;">The difference in monthly mortgage payments works out to $215/month </span></o:p></div>
Government rules allow those with greater than 20% down payment to amortize over 30 years. In contrast, those with less than 20% down payment can only amortize for a maximum of 25 years. This can make quite a difference in monthly payments as shown.<br />
<br />
In addition, you can avoid mortgage default insurance by saving for 20% down payment.<br />
<br />
In some cases, it will make better sense to make a 5% down payment and in some cases, it will be better or essential to have 20%. The important things is that a buyer analyze their situation with a professional mortgage broker whom them trust to make their decision on the size of their down payment.<br />
<br />
Note: This blog applies to the case of owner occupied properties.Anonymoushttp://www.blogger.com/profile/14577385676709045587noreply@blogger.com2tag:blogger.com,1999:blog-3043972593726545164.post-13819378415536193502011-07-09T22:41:00.000-07:002016-11-07T21:06:21.041-08:00An Open Mortgage Looks Good!<div class="MsoNormal" style="margin: 0cm 0cm 10pt;">
<span style="font-family: Calibri;">Many clients have asked me about an "open mortgage".</span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt;">
<span style="font-family: Calibri;">An O<b>pen Mortgage </b>is a mortgage that can paid off completely without a penalty. Sounds good right! It might be! But it is good to consider other options.</span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">Flexibility comes at a price. Open mortgages are more expensive than closed mortgages. An open mortgage could have a higher interest rate by 1%. That 1% will cost a borrower thousands of dollars over 1 year only! </span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">A closed mortgage usually is at a lower interest rate. You can often get out of these mortgages early, but it is at a price. That mortgage penalty can be reasonable or it can be sky high. </span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">The question of an open mortgage versus a closed mortgage is about the borrowing costs (the interest rate) versus the penalty to get out of a mortgage.</span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">An example of a good reason to have an open mortgage:</span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">You have your home up for sale and need to renew your mortgage while you are waiting to sell your home. In the short term, the open mortgage might be the less expensive option. </span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">In other scenarios, an open mortgage is not necessarily the best choice.</span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">For example: A borrower is expecting an inheritance of $200 000 that is taking a long time for probate. Once that borrower receives the $200 000, then he/she will pay down their $300 000 mortgage by $150 000. The borrower might be well advised to renew their mortgage on a 1 year fixed term while waiting. 1 year term interest rates are quite low. In the meantime, when the inheritance comes in, the borrower might be able to pay off $60 000 without penalty. And then when renewal time comes, the borrower can pay off the other $90 000! </span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">Remember that there are no penalties to pay if you pay down your mortgage at renewal time.</span><br />
<span style="font-family: Calibri;"><br /></span>
<span style="font-family: Calibri;">People’s situations are constantly changing these days, and sometimes they need flexibility. An open mortgage could offer that flexibility, but be sure to explore other options that could save you money. A quick call and I can provide you with the cost of your mortgage depending upon your unique circumstances.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt;">
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