Find an article which addresses the age old question, "Should I take a fixed rate or variable rate mortgage?"
Rates are historically low so either option is attractive in the short term. Lenders have stopped aggressive discounting of the variable rate option so borrowers might expect to pay prime today (3%) while qualified quick closing 5 year money is available at 3.29%.
I prefer the fixed rate option because the rate difference is negligible and one gets 5 years of peace of mind. In years past it was normal to see a 1.50% spread between short term and 5 year funds.
A recent Bank of Montreal study says that variable-rate mortgages have worked out to be better than fixed-rate mortgages 83 per cent of the time since 1975.
I believe we are now in the 17-per-cent zone.
Here are three key reasons:
Protect yourself from interest rates you can’t afford
Today, Canada’s debt-to-income ratio has reached 150 per cent – an all-time high. To me, this is rational. If you can borrow money at 2 per cent or 3 per cent, it can make financial sense to borrow a lot.
Mortgages: Variable or fixed rate?
The big issue is whether these same borrowers would have borrowed as much if interest rates were 5 per cent or 6 per cent. Based on the history of five-year mortgage rates since 1950, it is rare to get a 5-year fixed mortgage for under 6 per cent.
We don’t know where interest rates will be over the next five to 10 years, but what percentage of borrowers today will have financial difficulty paying their debt at 6 per cent? For those that will be in rough shape in that scenario, a variable-rate mortgage today is a real risk.
The only way someone can eliminate that risk is to lock in their mortgage rate. Today, you can get a five-year fixed mortgage for as low as 3.2 per cent. While you still need to worry about where interest rates will be in five years, you will be protected from any interest rate increases until late 2016.
For those who are truly risk averse, you can get a 10-year mortgage today for 4.69 per cent. While a 10-year mortgage is not the right solution for many people, for some stable and risk-averse people, this could be an ideal solution to avoid any interest rate risks for a decade. Keep in mind that for most of the last half century, a mortgage rate of 4.69 per cent would have been a blessing.
The premium on fixed mortgage is very small
For most of the past year, Canadians have leaned very heavily to variable-rate mortgages. Earlier this year, five-year variable mortgages were being offered at rates as low as prime minus 0.95 per cent (2.05 per cent at current prime rates). With the latest financial worries, lenders have raised variable rates. It is now difficult to find better than prime minus 0.5 per cent on a five-year variable mortgage. At today’s prime rate, this translates into 2.50 per cent.
Traditionally, a five-year fixed-rate mortgage would be 1 per cent to 2 per cent higher than the five-year variable rate, depending on the prevailing yield curve. The yield curve shows the difference between short-term rates and longer term rates.
Today, if you can get a variable rate mortgage for 2.50 per cent, and a five-year fixed at 3.2 per cent that is just a 0.7-per-cent premium. That is a steal on a historical basis.
Now factor in the fact that today’s prime rate is among the lowest in history and there are very few people who believe that interest rates will be the same or lower three years from now. If ever there was a time to take a hit of 0.7 per cent (on the front end) for the benefit of having a locked in rate for five years, today might be the day.
Peace of mind
There are a lot of things to worry about in life. For those with a large variable-rate mortgage, I know from our clients, that every Bank of Canada interest-rate announcement brings some anxiety. Having a fixed-rate mortgage simply eliminates that extra worry for at least a few years.
On its own, peace of mind is not a strong enough reason for most people to go fixed versus variable, but in combination with interest-rate history and the exceptionally low premium for a five-year fixed-rate mortgage, I believe now is the right time to lock into a fixed-rate mortgage.
Even if you are currently in a variable rate mortgage that doesn’t come due for a while, now might be a good time to consider moving to a fixed-rate mortgage and locking in the lowest rates in history.
We may just look back at today’s fixed rates and wonder how we could have ever considered not locking in.
Ted Rechtshaffen is president and CEO of TriDelta Financial Partners, a firm that provides independent financial planning advice. He has an MBA from the Schulich School of Business and is a certified financial planner. He was vice-president of business strategy at a major Canadian brokerage firm.
Friday, November 18, 2011
Appearantly we get it!
RBC’s Nixon cites lack of loan demand for economic malaise
From Thursday's Globe and Mail
Gordon Nixon, the head of Canada’s biggest bank, says he’s desperate to lend and do his part to kick-start the economy. There’s only one problem: wary businesses and indebted consumers don’t want his money.
“Our biggest challenge right now is to put credit out,” the Royal Bank of Canada chief executive officer said Wednesday at a conference in Washington. “Loan demand is very low.”
Mr. Nixon’s remarks come amid a contentious debate over the role of banks in the economic recovery – or lack thereof.
In some quarters, there is a feeling that financial institutions are restraining economic growth by applying unnecessarily strict lending standards after getting burned by the financial crisis. The RBC chief insists that is not the case with him, nor is it the case with his rivals, with whom he is engaged in “fierce” competition.
“We have never been more aggressive,” Mr. Nixon said during a panel discussion on the financial crisis hosted by Thomson Reuters, the University of Toronto’s Rotman School of Management, the Atlantic Council and the Government of Canada. “We have balance sheet to go at all levels,” Mr. Nixon added, using bankers’ jargon to say that he’s sitting on plenty of cash that he would like to lend to households, businesses and investors.
Business loans to Canadian residents by chartered banks was little changed between June and September, oscillating between a monthly average of roughly $177-billion and $178-billion, according to the Bank of Canada’s most recent data.
Companies are uninterested in taking on debt because the global economic outlook is uncertain, clouded by the likelihood that the European economy will tip into recession. Businesses also are sitting on record profits built up during the initial burst of growth that followed the 2008-2009 recession, allowing executives to finance operations with cash on hand.
Households in Canada appear to be thinking twice about record debt levels. For example, the monthly average of personal loans by chartered banks surged to $68-billion in August from $56-billion in January, 2010, a 21-per-cent increase. But the growth of personal loans suddenly stalled in September, according to the Bank of Canada data. The monthly average of outstanding credit-card loans was $63-billion in September compared with $64-billion in April.
Mr. Nixon was participating in a day-long event hosted by the Canadian embassy meant to highlight Canada’s relative economic success during the financial crisis. Financial regulation figured prominently in the discussion, and Mr. Nixon’s remark about the weakness of demand for loans had the effect of undermining the international bank lobby’s case against tighter scrutiny.
The Institute of International Finance, the Washington-based lobby for more than 450 financial institutions, has sought to push back against the Group of 20’s move for tougher banking rules by arguing the effort is hindering the banking industry’s ability to lend.
Bank of Canada Governor Mark Carney, who was appointed to lead the Financial Stability Board of international regulators this month, has countered that argument by saying the reason banks aren’t lending is because demand is weak – precisely Mr. Nixon’s observation on Wednesday.
It was unclear whether Mr. Nixon realized he was stomping on one of the key messages of the bank lobby. Regardless, the RBC chief was on message for most of the rest of his presentation, saying the G20’s regulatory push addresses “some of the wrong problems” and that rules have become needlessly complex.
Mr. Nixon contends the financial crisis was primarily caused by poor U.S. housing policy that encouraged households to take on too much debt and banks that were allowed to let their lending grow out of proportion to the amount of assets they had in reserve. But authorities, he said, have created rules that go well beyond these core issues.
“It’s very important that we have regulation that isn’t overly complex,” Mr. Nixon said. “Unfortunately, that’s not the way the regulatory environment has evolved.”
From Thursday's Globe and Mail
Gordon Nixon, the head of Canada’s biggest bank, says he’s desperate to lend and do his part to kick-start the economy. There’s only one problem: wary businesses and indebted consumers don’t want his money.
“Our biggest challenge right now is to put credit out,” the Royal Bank of Canada chief executive officer said Wednesday at a conference in Washington. “Loan demand is very low.”
Mr. Nixon’s remarks come amid a contentious debate over the role of banks in the economic recovery – or lack thereof.
In some quarters, there is a feeling that financial institutions are restraining economic growth by applying unnecessarily strict lending standards after getting burned by the financial crisis. The RBC chief insists that is not the case with him, nor is it the case with his rivals, with whom he is engaged in “fierce” competition.
“We have never been more aggressive,” Mr. Nixon said during a panel discussion on the financial crisis hosted by Thomson Reuters, the University of Toronto’s Rotman School of Management, the Atlantic Council and the Government of Canada. “We have balance sheet to go at all levels,” Mr. Nixon added, using bankers’ jargon to say that he’s sitting on plenty of cash that he would like to lend to households, businesses and investors.
Business loans to Canadian residents by chartered banks was little changed between June and September, oscillating between a monthly average of roughly $177-billion and $178-billion, according to the Bank of Canada’s most recent data.
Companies are uninterested in taking on debt because the global economic outlook is uncertain, clouded by the likelihood that the European economy will tip into recession. Businesses also are sitting on record profits built up during the initial burst of growth that followed the 2008-2009 recession, allowing executives to finance operations with cash on hand.
Households in Canada appear to be thinking twice about record debt levels. For example, the monthly average of personal loans by chartered banks surged to $68-billion in August from $56-billion in January, 2010, a 21-per-cent increase. But the growth of personal loans suddenly stalled in September, according to the Bank of Canada data. The monthly average of outstanding credit-card loans was $63-billion in September compared with $64-billion in April.
Mr. Nixon was participating in a day-long event hosted by the Canadian embassy meant to highlight Canada’s relative economic success during the financial crisis. Financial regulation figured prominently in the discussion, and Mr. Nixon’s remark about the weakness of demand for loans had the effect of undermining the international bank lobby’s case against tighter scrutiny.
The Institute of International Finance, the Washington-based lobby for more than 450 financial institutions, has sought to push back against the Group of 20’s move for tougher banking rules by arguing the effort is hindering the banking industry’s ability to lend.
Bank of Canada Governor Mark Carney, who was appointed to lead the Financial Stability Board of international regulators this month, has countered that argument by saying the reason banks aren’t lending is because demand is weak – precisely Mr. Nixon’s observation on Wednesday.
It was unclear whether Mr. Nixon realized he was stomping on one of the key messages of the bank lobby. Regardless, the RBC chief was on message for most of the rest of his presentation, saying the G20’s regulatory push addresses “some of the wrong problems” and that rules have become needlessly complex.
Mr. Nixon contends the financial crisis was primarily caused by poor U.S. housing policy that encouraged households to take on too much debt and banks that were allowed to let their lending grow out of proportion to the amount of assets they had in reserve. But authorities, he said, have created rules that go well beyond these core issues.
“It’s very important that we have regulation that isn’t overly complex,” Mr. Nixon said. “Unfortunately, that’s not the way the regulatory environment has evolved.”
Thursday, November 10, 2011
Be careful when buying U.S. property, experts say
The Canadian dollar is virtually at par. And there’s that gloomy weather outside. That can only mean that Canadians are thinking Florida.
Experts say consumers should be even more careful than normal when purchasing down south. Buying a home in the United States just got a little riskier, after all 50 states launched an investigation into the mortgage industry this fall.
The U.S. government is looking at whether banks used possibly fraudulent paperwork to get homeowners out of foreclosed homes.
This has caused deals on foreclosed homes to stall in areas such as Arizona and Florida, where nearly half the deals done there are foreclosures.
Investigators are looking at whether banks used robotic signers to sign hundreds of affidavits a day without reviewing them properly.
“This will help foreclosed households stay in their homes rent-free for longer, but watch sales activity dry up in coming months since it was foreclosed sales that were really impacting the turnover in recent months” said economist David Rosenberg of Gluskin + Sheff & Associates.
The freeze isn’t expected to last for long. While there was a drop in foreclosure filings in October, a new wave of foreclosures is expected to hit the market once the regulators play catch up.
However, Brian Ellis, vice-president of Brampton based Florida Home Finders, says Canadians should always be wary of buying foreclosed properties.
“There is a lot of due diligence that you have to do, and this will spook the market even more,” said Ellis.
Philip McKernan, the Vancouver-based author of Fire Sale: How To Buy U.S. Foreclosures Now!, Says Canadian buyers have to do their due diligence before purchasing.
“In the U.S., you always have to be prepared to do a little more digging especially with a foreclosed property,” said McKernan.
Many of the best foreclosed properties are already purchased by large private equity corporations or hedge funds, said Ellis.
“Unless you have boots on the ground and you have time to sniff around, it’s tough to find that diamond in the rough,” said Ellis.
However, there are lots of other properties on the market that are “distressed priced” but not in foreclosure, he says.
Ellis’ company, for example, has an inventory of developers who are trying to sell empty units that were built during the boom.
You could get a one bedroom condo in Sarasota Florida that would have cost more than $200,000 during the peak for $59,000, he says. A one bedroom in Orlando is going for $66,000 compared with $150,000 at the peak.
Still, analysts say the market could fall even further over the next year, as more foreclosures come on the market. In the short run, inventory will be low as in States such as Nevada and Florida, foreclosures are as much as half the market.
Canadians are the largest foreign buyers of property in the U.S., representing 23 per cent of all sales according to the National Association of Realtors.
Henry Wolfond, CEO of Bayshore Capital, says unlike smaller investors, corporate and larger investors have not really been affected by the foreclosure documentation crunch.
“With the very large transactions there is normally a greater oversight and due diligence,” said Wolfond, who says his recent transactions have not been affected.
“But it has certainly affected people at the consumer level.”
Wolfond says some transactions are now taking longer than normal as the market has stalled.
“You see this in cases where the mortgage broker may not have got all the proper paperwork because they were rushing things through,” said Wolfond.
Wolfond says it doesn’t matter the size of the deal, but Canadians should be careful when they sign the dotted line.
“I think Canadians were all excited about the deals a year ago, and now they’re wondering if the bottom will ever come, things have spiralled downhill so badly, it’s just overwhelmingly bad down there,” said author McKernan.
And just because the house may go into a foreclosure auction, doesn’t mean the price is right, he said.
“There are lots of homes that don’t sell, and the bank takes them back and resells them later for a cheaper price. This is also the better route because unlike the foreclosure, you’re not getting something ‘as is’,” said McKernan.
McKernan recommends that buyers get a lawyer to review their transaction in the U.S.
Unlike Canada, many transactions are done with title insurance companies doing the paperwork without the benefit of a lawyer.
“I think Canadians are obsessed over taxes, so they hire an accountant first, but they forget that they could also use legal advice, especially to make sure you have a clean title, and to make sure that your deal will close,” McKernan said.
Experts say consumers should be even more careful than normal when purchasing down south. Buying a home in the United States just got a little riskier, after all 50 states launched an investigation into the mortgage industry this fall.
The U.S. government is looking at whether banks used possibly fraudulent paperwork to get homeowners out of foreclosed homes.
This has caused deals on foreclosed homes to stall in areas such as Arizona and Florida, where nearly half the deals done there are foreclosures.
Investigators are looking at whether banks used robotic signers to sign hundreds of affidavits a day without reviewing them properly.
“This will help foreclosed households stay in their homes rent-free for longer, but watch sales activity dry up in coming months since it was foreclosed sales that were really impacting the turnover in recent months” said economist David Rosenberg of Gluskin + Sheff & Associates.
The freeze isn’t expected to last for long. While there was a drop in foreclosure filings in October, a new wave of foreclosures is expected to hit the market once the regulators play catch up.
However, Brian Ellis, vice-president of Brampton based Florida Home Finders, says Canadians should always be wary of buying foreclosed properties.
“There is a lot of due diligence that you have to do, and this will spook the market even more,” said Ellis.
Philip McKernan, the Vancouver-based author of Fire Sale: How To Buy U.S. Foreclosures Now!, Says Canadian buyers have to do their due diligence before purchasing.
“In the U.S., you always have to be prepared to do a little more digging especially with a foreclosed property,” said McKernan.
Many of the best foreclosed properties are already purchased by large private equity corporations or hedge funds, said Ellis.
“Unless you have boots on the ground and you have time to sniff around, it’s tough to find that diamond in the rough,” said Ellis.
However, there are lots of other properties on the market that are “distressed priced” but not in foreclosure, he says.
Ellis’ company, for example, has an inventory of developers who are trying to sell empty units that were built during the boom.
You could get a one bedroom condo in Sarasota Florida that would have cost more than $200,000 during the peak for $59,000, he says. A one bedroom in Orlando is going for $66,000 compared with $150,000 at the peak.
Still, analysts say the market could fall even further over the next year, as more foreclosures come on the market. In the short run, inventory will be low as in States such as Nevada and Florida, foreclosures are as much as half the market.
Canadians are the largest foreign buyers of property in the U.S., representing 23 per cent of all sales according to the National Association of Realtors.
Henry Wolfond, CEO of Bayshore Capital, says unlike smaller investors, corporate and larger investors have not really been affected by the foreclosure documentation crunch.
“With the very large transactions there is normally a greater oversight and due diligence,” said Wolfond, who says his recent transactions have not been affected.
“But it has certainly affected people at the consumer level.”
Wolfond says some transactions are now taking longer than normal as the market has stalled.
“You see this in cases where the mortgage broker may not have got all the proper paperwork because they were rushing things through,” said Wolfond.
Wolfond says it doesn’t matter the size of the deal, but Canadians should be careful when they sign the dotted line.
“I think Canadians were all excited about the deals a year ago, and now they’re wondering if the bottom will ever come, things have spiralled downhill so badly, it’s just overwhelmingly bad down there,” said author McKernan.
And just because the house may go into a foreclosure auction, doesn’t mean the price is right, he said.
“There are lots of homes that don’t sell, and the bank takes them back and resells them later for a cheaper price. This is also the better route because unlike the foreclosure, you’re not getting something ‘as is’,” said McKernan.
McKernan recommends that buyers get a lawyer to review their transaction in the U.S.
Unlike Canada, many transactions are done with title insurance companies doing the paperwork without the benefit of a lawyer.
“I think Canadians are obsessed over taxes, so they hire an accountant first, but they forget that they could also use legal advice, especially to make sure you have a clean title, and to make sure that your deal will close,” McKernan said.
Tuesday, November 8, 2011
Buying a home: 10 things you need to know
Buying a home is the largest purchase you’ll likely make. No wonder you’re stressed. Where should you look? Can you afford it? What will happen if interest rates rise? It may all seem daunting, but you can make it more manageable with a little planning. Here are a few things to figure out before you make the leap.
1. Get your financial house in order
Figure out your net worth, which is your assets less your liabilities. Assets are things like cash, investments, savings, cars, boats and so on, while liabilities are things you owe – car loans, amounts on lines of credit, overdrafts, credit cards. Subtracting one from the other tells you what you’re worth. Hint: If you get a negative number, you should probably re-think the whole thing.
The bigger the down payment the less interest you will pay in the long run. Well before you start looking for a house or condo, build a budget that will allow you to put some money away each month for that down payment.
2. Talk to a broker or your bank
Choosing a mortgage is like going to an ice cream parlour – there are dozens of choices and different flavors.
It may be time for a mortgage broker or adviser at your bank. A mortgage broker will shop around, much like an insurance broker, to find you the best deal. Your banker will sell you a mortgage offered by the bank. That doesn’t mean you can’t negotiate with your bank. The posted rates are a starting point and you can usually get a better deal. If they won’t negotiate go somewhere else.
Don’t be afraid to ask questions. If you go to a broker, ask how long they’ve been in business, what kind of products they offer and if they have references. Often the best way to find a broker is word of mouth. Ask your friends.
3. Terms and rates
The next decisions revolve around how long you want to lock the mortgage in and than will determine the rate of interest you pay. This is called the mortgage term and can be as little as six months or as long as seven years. It locks you in to a set of payments for the length of the term. Shorter terms have lower rates of interest.
Along with this is the amortization period, or the amount of time it will take to pay off your loan. It might run anywhere from say, 15 to 35 years.
The longer your amortization, the more interest you will pay. It may be worth considering a weekly mortgage. The monthly payment is divided by four, but the advantage is that you make four extra payments a year which are applied to principal. It’s a painless way to pay down your mortgage faster.
Once you’ve settled on a rate, term and amortization period, you get a mortgage pre-approved by your lender.
4. Get a real estate lawyer
While your dentist can likely do a fine root canal, an endodonist will likely do a better job. In some cases there won’t be a substantial difference in cost, but it could save you some pain down the road. Similarly, having an experienced real estate lawyer looking over your purchase agreement, checking for outstanding taxes and liens or claims against the property can be a lifesaver down the road.
Line the lawyer up in advance and explain your plan. That way, there’s no surprise when you put in your offer and come back to him with the deal.
5. Have realistic expectations
First time buyers often start with a wish list that may not be realistic given their resources. Starting big is fine, as long as you recognize that along the way you’ll make trade offs between location, size of house and features.
First, assess your lifestyle . If you are single, enjoy walking to Starbucks for a latte and hate cutting grass, then a detached home in the suburbs is likely not for you.
Make a list of the things you want. Do you need a two car garage? Space for a home office? Are you going to have children? Is it a good location? [hotlink to 10 things story] Don’t look at the house in isolation. Make sure the neighborhood, schools and surrounding amenities and services fits your needs.
Now start looking around. Use the internet, newspapers, and real estate magazines to get up to speed. Go to open houses to get a sense of what’s available at what price. Knowledge is power. A good place to start is with your local Multiple Listing Service site.
6. Stick to your plan
Understand what your spending limit is and don’t go over it. A pool might be nice, but it is not a necessity. Buying a home is ultimately a compromise of needs versus wants.
Try not to get emotional. In a hot market, bidding wars can be tough on buyers. But you could end up with a whole pile of buyer’s remorse if you think you overpaid.
Or what may look like a lemon. Homes that are in disrepair or need fixing up can usually be purchased for less. Don’t be hung up on the wallpaper, or the fact that the kitchen isn’t pristine.
Use a little imagination. Yes, it’s going to take work, but the savings could be worth it. Because when life gives you lemons, a slap of paint and a trip to the hardware store will Increase housing value like you wouldn’t believe.
7. Buyer agency agreement
Make sure that your agent represents you. A buyer agency agreement helps to reduce conflict of interest since the brokerage represents you exclusively. The seller’s agent represents the vendor.
A buyer’s agent for example, will tell you why you shouldn’t be buying a particular home. Make sure that the guy or gal on your team is batting only for you.
8. Get a home inspection
You wouldn’t buy a used car without checking under the hood, so why buy a house without a home inspection?
A home inspector will check for structural and electrical defects, roofing and foundation problems. This can come back to haunt you later. It also gives you some negotiation room when you put in your offer.
In hot markets, sellers may press to have the inspection waived. Don’t give in and get swept away in the heat of the moment. Walk away.
At the end of the day, it boils down to your risk profile. I have a friend who sometimes drives without a seatbelt. My cousin meanwhile, loves the fact they have somehow managed to invent car airbags for her knees. My theory is it’s better to have somewhere soft to land.
9. Don’t be afraid of being a landlord
One way to pay your mortgage off faster is to have someone help you. Buying a duplex or triplex is not a bad way to go, particularly in urban areas where prices have been bid up. Renting out the basement in a single detached home or a spare room is also a smart idea if you’re not using the space. And the extra money in your pocket may mean that you can afford a nicer home in a better neighborhood.
10. Maybe you should rent
Just because all your friends have put money down on a new condo doesn’t mean that you have to follow suit. Depending on your circumstances, it might make more sense to rent than buying a home. A rent versus buy calculator can help you figure it out http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01821.html
Taxes, maintenance and utilities can add up. A low interest rate environment can tip the rent verses buy equation into the buy side, while higher interest rates, which make buying less affordable, can make it more favorable to rent.
In many cases, it is much cheaper to rent than it is to buy. Most studies show however, that in the very long term, it is better to buy. However, if you tend to move a lot, don’t like to deal with maintenance issues, and want to free up some money for other things, then renting might be the best lifestyle choice.
1. Get your financial house in order
Figure out your net worth, which is your assets less your liabilities. Assets are things like cash, investments, savings, cars, boats and so on, while liabilities are things you owe – car loans, amounts on lines of credit, overdrafts, credit cards. Subtracting one from the other tells you what you’re worth. Hint: If you get a negative number, you should probably re-think the whole thing.
The bigger the down payment the less interest you will pay in the long run. Well before you start looking for a house or condo, build a budget that will allow you to put some money away each month for that down payment.
2. Talk to a broker or your bank
Choosing a mortgage is like going to an ice cream parlour – there are dozens of choices and different flavors.
It may be time for a mortgage broker or adviser at your bank. A mortgage broker will shop around, much like an insurance broker, to find you the best deal. Your banker will sell you a mortgage offered by the bank. That doesn’t mean you can’t negotiate with your bank. The posted rates are a starting point and you can usually get a better deal. If they won’t negotiate go somewhere else.
Don’t be afraid to ask questions. If you go to a broker, ask how long they’ve been in business, what kind of products they offer and if they have references. Often the best way to find a broker is word of mouth. Ask your friends.
3. Terms and rates
The next decisions revolve around how long you want to lock the mortgage in and than will determine the rate of interest you pay. This is called the mortgage term and can be as little as six months or as long as seven years. It locks you in to a set of payments for the length of the term. Shorter terms have lower rates of interest.
Along with this is the amortization period, or the amount of time it will take to pay off your loan. It might run anywhere from say, 15 to 35 years.
The longer your amortization, the more interest you will pay. It may be worth considering a weekly mortgage. The monthly payment is divided by four, but the advantage is that you make four extra payments a year which are applied to principal. It’s a painless way to pay down your mortgage faster.
Once you’ve settled on a rate, term and amortization period, you get a mortgage pre-approved by your lender.
4. Get a real estate lawyer
While your dentist can likely do a fine root canal, an endodonist will likely do a better job. In some cases there won’t be a substantial difference in cost, but it could save you some pain down the road. Similarly, having an experienced real estate lawyer looking over your purchase agreement, checking for outstanding taxes and liens or claims against the property can be a lifesaver down the road.
Line the lawyer up in advance and explain your plan. That way, there’s no surprise when you put in your offer and come back to him with the deal.
5. Have realistic expectations
First time buyers often start with a wish list that may not be realistic given their resources. Starting big is fine, as long as you recognize that along the way you’ll make trade offs between location, size of house and features.
First, assess your lifestyle . If you are single, enjoy walking to Starbucks for a latte and hate cutting grass, then a detached home in the suburbs is likely not for you.
Make a list of the things you want. Do you need a two car garage? Space for a home office? Are you going to have children? Is it a good location? [hotlink to 10 things story] Don’t look at the house in isolation. Make sure the neighborhood, schools and surrounding amenities and services fits your needs.
Now start looking around. Use the internet, newspapers, and real estate magazines to get up to speed. Go to open houses to get a sense of what’s available at what price. Knowledge is power. A good place to start is with your local Multiple Listing Service site.
6. Stick to your plan
Understand what your spending limit is and don’t go over it. A pool might be nice, but it is not a necessity. Buying a home is ultimately a compromise of needs versus wants.
Try not to get emotional. In a hot market, bidding wars can be tough on buyers. But you could end up with a whole pile of buyer’s remorse if you think you overpaid.
Or what may look like a lemon. Homes that are in disrepair or need fixing up can usually be purchased for less. Don’t be hung up on the wallpaper, or the fact that the kitchen isn’t pristine.
Use a little imagination. Yes, it’s going to take work, but the savings could be worth it. Because when life gives you lemons, a slap of paint and a trip to the hardware store will Increase housing value like you wouldn’t believe.
7. Buyer agency agreement
Make sure that your agent represents you. A buyer agency agreement helps to reduce conflict of interest since the brokerage represents you exclusively. The seller’s agent represents the vendor.
A buyer’s agent for example, will tell you why you shouldn’t be buying a particular home. Make sure that the guy or gal on your team is batting only for you.
8. Get a home inspection
You wouldn’t buy a used car without checking under the hood, so why buy a house without a home inspection?
A home inspector will check for structural and electrical defects, roofing and foundation problems. This can come back to haunt you later. It also gives you some negotiation room when you put in your offer.
In hot markets, sellers may press to have the inspection waived. Don’t give in and get swept away in the heat of the moment. Walk away.
At the end of the day, it boils down to your risk profile. I have a friend who sometimes drives without a seatbelt. My cousin meanwhile, loves the fact they have somehow managed to invent car airbags for her knees. My theory is it’s better to have somewhere soft to land.
9. Don’t be afraid of being a landlord
One way to pay your mortgage off faster is to have someone help you. Buying a duplex or triplex is not a bad way to go, particularly in urban areas where prices have been bid up. Renting out the basement in a single detached home or a spare room is also a smart idea if you’re not using the space. And the extra money in your pocket may mean that you can afford a nicer home in a better neighborhood.
10. Maybe you should rent
Just because all your friends have put money down on a new condo doesn’t mean that you have to follow suit. Depending on your circumstances, it might make more sense to rent than buying a home. A rent versus buy calculator can help you figure it out http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01821.html
Taxes, maintenance and utilities can add up. A low interest rate environment can tip the rent verses buy equation into the buy side, while higher interest rates, which make buying less affordable, can make it more favorable to rent.
In many cases, it is much cheaper to rent than it is to buy. Most studies show however, that in the very long term, it is better to buy. However, if you tend to move a lot, don’t like to deal with maintenance issues, and want to free up some money for other things, then renting might be the best lifestyle choice.
Friday, November 4, 2011
Fall Home Maintenance Guide
With colder weather on the horizon the time is now to do some routine annual maintenance on your home. Here are 4 areas to give some extra attention before winter strikes:
1. The Structure: If necessary fill cracks and holes with epoxy and re-caulk foundation seams to prevent water damage or cold air over the winter. Also replace weather stripping around doors and windows to keep them air tight. Any steps taken to increase the air tightness of your home is going to increase its energy efficiency and ensure you stay warm all winter long.
2. Heating, Ventilation & AC: Have your furnace inspected and cleaned by a licensed technician to ensure that come time to turn it on, it is working properly and efficiently! Also if your AC unit is outside, cover it (don’t wrap it) to keep leaves, snow and debris off until spring.
3. The Chimney: If you have a working fireplace the chimney should be professionally cleaned and inspected for any maintenance needed once a year; ideally before you need to use it!
4. Drainage: Cleaning your eavestroughs and downspouts is an easy way to keep your drainage from backing up over the winter. This should be done one time in the Spring and one time in the Fall.
1. The Structure: If necessary fill cracks and holes with epoxy and re-caulk foundation seams to prevent water damage or cold air over the winter. Also replace weather stripping around doors and windows to keep them air tight. Any steps taken to increase the air tightness of your home is going to increase its energy efficiency and ensure you stay warm all winter long.
2. Heating, Ventilation & AC: Have your furnace inspected and cleaned by a licensed technician to ensure that come time to turn it on, it is working properly and efficiently! Also if your AC unit is outside, cover it (don’t wrap it) to keep leaves, snow and debris off until spring.
3. The Chimney: If you have a working fireplace the chimney should be professionally cleaned and inspected for any maintenance needed once a year; ideally before you need to use it!
4. Drainage: Cleaning your eavestroughs and downspouts is an easy way to keep your drainage from backing up over the winter. This should be done one time in the Spring and one time in the Fall.
Tuesday, October 25, 2011
Bank of Canada Keeps Key Rate Steady
As expected by most economists, the Bank of Canada announced earlier today that it is keeping its key policy rate steady.
In its statement the Bank noted that it expects "growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases." The Bank also projected today that the Canadian economy "will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013."
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will still enjoy relatively low rates. A new variable-rate mortgage can in many cases be obtained by qualified borrowers at Prime minus 0.20%, or 2.80%. Home equity lines of credit and variable-rate credit cards are also typically linked to the prime rate. The pricing for new fixed-rate mortgages is influenced by trends in the bond markets, rather than the central bank's key policy rate.
The Bank's next rate decision is scheduled for December 6.
In its statement the Bank noted that it expects "growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases." The Bank also projected today that the Canadian economy "will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013."
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will still enjoy relatively low rates. A new variable-rate mortgage can in many cases be obtained by qualified borrowers at Prime minus 0.20%, or 2.80%. Home equity lines of credit and variable-rate credit cards are also typically linked to the prime rate. The pricing for new fixed-rate mortgages is influenced by trends in the bond markets, rather than the central bank's key policy rate.
The Bank's next rate decision is scheduled for December 6.
Friday, October 21, 2011
ANALYSIS PARALYSIS
Are you so overwhelmed by the home-buying process that you find yourself unable to move forward? If so, you may suffer from buyer’s paralysis.
Luckily, this condition can be cured. Here’s how.
Make a “needs vs. wants” checklist and use it to measure
how each property stacks up. Sometimes, it’s the sheer
amount of choice, or the thought of ending up in a home
that’s not right for them, that leaves buyers stymied. A
checklist helps narrow your focus and prevent you from
purchasing a home that doesn’t meet your needs.
Talk to a mortgage consultant. A home is a big financial
commitment, and that can leave some buyers feeling
paralyzed, as can wondering if they can afford it. A
mortgage consultant can give you an idea of what you
can afford, tell you what you qualify to borrow, and
discuss borrowing options with you to find the best fit.
Let go of “the one” idea. For some buyers, it’s the idea
that there’s such a thing as the perfect home that
causes them to miss out on a good thing. The reality is
that no home is perfect; there will always be something
about every property you wish you could change. The
question is, can you live with those imperfections?
Work with a real estate sales representative. The
home-buying process can be intimidating; some buyers
are so fearful of making a misstep that they can’t
take the next step at all. Team with a professional
and you’ll have someone on your side whose job it is
to explain each stage of the process and look out for
your best interests.
Ready, Set, Move!
Most buyers, especially first-time homebuyers,
agree that finding a property in “move-in ready”
condition is important to them. So, sellers, it’s
time to roll up your sleeves and get to work.
Making your home move-in ready doesn’t necessarily
mean doing costly kitchen and bath renovations. It does
mean addressing safety issues, as well as performing
maintenance tasks, both minor (such as fixing leaky
faucets and drawers that stick) and major (like fixing
faulty appliances or problems with your heating/
cooling system). To that end, consider having your home
professionally inspected before it goes on market; the
inspection report can serve as your to-do list, ensuring
your property is all fixed up — not a fixer-upper.
Getting your home in move-in condition also means
making sure it’s thoroughly clean and neutral in décor.
Ideally, buyers want to be able to move into a property
where they can apply their personal touch without
having to first remove yours. In other words, your décor
should be a blank canvas — so give your walls a fresh
coat of paint in a neutral tone, and, if not already a
neutral shade, replace your carpeting, too.
Just as buyers want a move-in ready home, you want
top dollar for your property. So, while putting work and
money into your home only to turn around and sell it
might seem counterproductive, doing so will help to justify
a higher asking price than you could set for your home if
it required more work on behalf of its new owners.
Luckily, this condition can be cured. Here’s how.
Make a “needs vs. wants” checklist and use it to measure
how each property stacks up. Sometimes, it’s the sheer
amount of choice, or the thought of ending up in a home
that’s not right for them, that leaves buyers stymied. A
checklist helps narrow your focus and prevent you from
purchasing a home that doesn’t meet your needs.
Talk to a mortgage consultant. A home is a big financial
commitment, and that can leave some buyers feeling
paralyzed, as can wondering if they can afford it. A
mortgage consultant can give you an idea of what you
can afford, tell you what you qualify to borrow, and
discuss borrowing options with you to find the best fit.
Let go of “the one” idea. For some buyers, it’s the idea
that there’s such a thing as the perfect home that
causes them to miss out on a good thing. The reality is
that no home is perfect; there will always be something
about every property you wish you could change. The
question is, can you live with those imperfections?
Work with a real estate sales representative. The
home-buying process can be intimidating; some buyers
are so fearful of making a misstep that they can’t
take the next step at all. Team with a professional
and you’ll have someone on your side whose job it is
to explain each stage of the process and look out for
your best interests.
Ready, Set, Move!
Most buyers, especially first-time homebuyers,
agree that finding a property in “move-in ready”
condition is important to them. So, sellers, it’s
time to roll up your sleeves and get to work.
Making your home move-in ready doesn’t necessarily
mean doing costly kitchen and bath renovations. It does
mean addressing safety issues, as well as performing
maintenance tasks, both minor (such as fixing leaky
faucets and drawers that stick) and major (like fixing
faulty appliances or problems with your heating/
cooling system). To that end, consider having your home
professionally inspected before it goes on market; the
inspection report can serve as your to-do list, ensuring
your property is all fixed up — not a fixer-upper.
Getting your home in move-in condition also means
making sure it’s thoroughly clean and neutral in décor.
Ideally, buyers want to be able to move into a property
where they can apply their personal touch without
having to first remove yours. In other words, your décor
should be a blank canvas — so give your walls a fresh
coat of paint in a neutral tone, and, if not already a
neutral shade, replace your carpeting, too.
Just as buyers want a move-in ready home, you want
top dollar for your property. So, while putting work and
money into your home only to turn around and sell it
might seem counterproductive, doing so will help to justify
a higher asking price than you could set for your home if
it required more work on behalf of its new owners.
CONGRATULATIONS, MORTGAGE-SAVVY CANADIANS!
The Canada Mortgage and Housing Corporation (CMHC) provided
some interesting — and positive! — insight into the way Canadian
mortgage holders view their mortgage obligations, according to
the CMHC 2011 Mortgage Consumer Survey.
Overall, Canadians appear to enter the housing market with
both eyes open, doing extensive research before they purchase,
and then are diligent in their mortgage management following
their purchase. After all, as Pierre Serré, Vice President, Insurance
Product and Business Development at CMHC noted, “Buying a home
is one of the biggest financial decisions most Canadians will make
in their lifetimes.”
The survey showed that Canadians take, on average, 11 months to plan
their purchase, and 88 percent of homebuyers indicated they had a
good sense of how much mortgage they could afford before purchasing a
home. Many of these homebuyers no doubt took advantage of the research
provided to them through their mortgage brokers, whose job it
is to provide homebuyers with a comprehensive insight into
all their borrowing options.
Following their home purchases, 75 percent of recent homebuyers
surveyed felt it was very important to pay off their
mortgage as soon as possible. To achieve this, 39 percent of
recent buyers indicated they had arranged for higher mortgage
payments than the minimum required, while 20 percent had
made a lump-sum payment since taking out their mortgage.
Whether you have questions about your current mortgage,
or are thinking about taking out a new loan, please remember
that you can call at any time for a discussion and advice, with
absolutely no obligation.
some interesting — and positive! — insight into the way Canadian
mortgage holders view their mortgage obligations, according to
the CMHC 2011 Mortgage Consumer Survey.
Overall, Canadians appear to enter the housing market with
both eyes open, doing extensive research before they purchase,
and then are diligent in their mortgage management following
their purchase. After all, as Pierre Serré, Vice President, Insurance
Product and Business Development at CMHC noted, “Buying a home
is one of the biggest financial decisions most Canadians will make
in their lifetimes.”
The survey showed that Canadians take, on average, 11 months to plan
their purchase, and 88 percent of homebuyers indicated they had a
good sense of how much mortgage they could afford before purchasing a
home. Many of these homebuyers no doubt took advantage of the research
provided to them through their mortgage brokers, whose job it
is to provide homebuyers with a comprehensive insight into
all their borrowing options.
Following their home purchases, 75 percent of recent homebuyers
surveyed felt it was very important to pay off their
mortgage as soon as possible. To achieve this, 39 percent of
recent buyers indicated they had arranged for higher mortgage
payments than the minimum required, while 20 percent had
made a lump-sum payment since taking out their mortgage.
Whether you have questions about your current mortgage,
or are thinking about taking out a new loan, please remember
that you can call at any time for a discussion and advice, with
absolutely no obligation.
Friday, October 14, 2011
Why living downtown has become more attractive
When Jeff Walker purchased his home a decade ago in downtown Ottawa, environmental sustainability and transportation costs were a big reason.
“I had to sacrifice 20 per cent more space and yet pay 20 per cent more for the home, but I figured it was worth it,” said Walker, who is a vice-president and chief strategy officer at the Canadian Automobile Association. “I think it’s a calculus that many home owners do, especially since transportation in terms of time and money becomes a significant monthly overhead.”
The Toronto Board of Trade says the most pressing issue for the Toronto area is gridlock, costing the region $6 billion annually. A poll conducted for the board released last week says 61 per cent believe traffic congestion is at “crisis proportions.”
According to a Statistics Canada survey released in August, the Greater Toronto Area was once again the worst place to commute in Canada at 33 minutes.
Commute times and gas prices are two very big reasons that some buyers like Walker are avoiding the suburbs, even if they can get a bigger bang for their buck.
According to a recent U.S. based survey of agents by realty firm Coldwell Banker, the high cost of gasoline and long travel times is a major factor in influencing some home purchasing decisions.
Three quarters of agents said the a spike in gas prices influenced their clients’ decisions on where to live. Another 93 per cent said if gas prices continued to rise, more home buyers would choose to live somewhere closer to work.
“There is an implicit price that has to be paid for the length of a commute, whether it is in gas or in time,” said Phil Soper, CEO and president of Royal Lepage Real Estate Services. “The invisible hand of commerce is in the decision making process of urban verses suburban. People get a discount if they live in the suburbs and a premium when they live downtown.”
The 2004 documentary The End Of Suburbia argued that suburban sprawl is unsustainable. And that was when domestic crude was in the $37 range - where it has more than doubled today.
“America took all its post war wealth and invested it into something that has no future,” say the filmmakers.
That same year a study by University of Toronto civil engineering professor Eric Miller concluded that commuting costs and the extra expense of running a larger suburban home often eat into any mortgage savings.
What surprised Miller was that a similarly valued home in the suburbs also ended up costing more to run. That’s because you get more space for the dollar in the 905 compared with the 416.
But more space means higher utilities and maintenance.
The study didn’t include the value of time spent in the car traveling or the environmental impact of more pollution.
“I think the finding was that there is no such thing as cheap land, the further out you go, the more it will cost you,” said Miller. “And that comparison would be even more dramatic today since the cost of gas, cars and parking has gone up since then.”
The study didn’t factor in the fact that downtown areas, which are becoming increasingly more attractive to buyers, tend to increase more in value than suburban areas.
(A 2008 study by Royal LePage found that a standard detached bungalow in Toronto would have appreciated by 104 per cent over a ten year period compared to a similar bungalow in the 905 at 78 per cent.)
“As gas prices rise I think there is an implicit discount on suburban prices, because there is a greater cost to the consumer,” said Soper. “You see that in so many areas of Toronto. There are neighbourhoods that are a ten minute commute from downtown, but you are paying a lot more for a tiny plot of land because of that.”
Gina Gokaldas, 24, says she moved downtown after a year and a half living in a new Markham condominium because of the long commute.
“It just took too long to get to work,” said Gokaldas, who moved to Markham from Montreal in 2009. “I just spent way too much out of my day traveling.”
Gokaldas says she chose Markham initially because of the value.
“Everything in my price range was like a shoebox downtown, so when I saw the property in Markham I was sold,” says Gokaldas.
Gokaldas paid about $300,000 at the time for her 900 square foot apartment. Similar apartments she said were almost half the size in the downtown area.
But the commute finally got to Gokaldas. Earlier this year she sold her home. She is now renting an apartment a block away from the Eaton Centre and it takes her 20 minutes on the subway to get to work.
“It’s night and day, although I miss the space I had,” says Gokaldas, who now lives in about 500 square feet until she decides to buy again.
Still, despite the dire predictions, sales in the suburbs have been doing well, even with high gas prices. While many potential home buyers are looking for places closer to the central core because of high transportation costs, affordability in the 416 has become a serious issue.
“Gas savings are certainly an incentive, but we have a lot of clients looking at the 905, not because they don’t like the 416, it’s because they can’t afford to find a house in their price point down there,” said Dave Elfassy, an agent with Right At Home Realty. “You might save some money in transportation costs, but you’re really giving up on space. They’re figuring it will tack on another 45 minutes to go to work, but they can live in a monster home in Richmond Hill, as opposed to a semi or a condo downtown.”
So, bigger space, or a stress free commute. While the dilemma for home buyers isn’t new, the reality is that the divide has never been more dramatic in an era of rising energy costs and home prices.
“Maybe the answer is to find that job in the burbs or work from home,” laughs Elfassy.
“I had to sacrifice 20 per cent more space and yet pay 20 per cent more for the home, but I figured it was worth it,” said Walker, who is a vice-president and chief strategy officer at the Canadian Automobile Association. “I think it’s a calculus that many home owners do, especially since transportation in terms of time and money becomes a significant monthly overhead.”
The Toronto Board of Trade says the most pressing issue for the Toronto area is gridlock, costing the region $6 billion annually. A poll conducted for the board released last week says 61 per cent believe traffic congestion is at “crisis proportions.”
According to a Statistics Canada survey released in August, the Greater Toronto Area was once again the worst place to commute in Canada at 33 minutes.
Commute times and gas prices are two very big reasons that some buyers like Walker are avoiding the suburbs, even if they can get a bigger bang for their buck.
According to a recent U.S. based survey of agents by realty firm Coldwell Banker, the high cost of gasoline and long travel times is a major factor in influencing some home purchasing decisions.
Three quarters of agents said the a spike in gas prices influenced their clients’ decisions on where to live. Another 93 per cent said if gas prices continued to rise, more home buyers would choose to live somewhere closer to work.
“There is an implicit price that has to be paid for the length of a commute, whether it is in gas or in time,” said Phil Soper, CEO and president of Royal Lepage Real Estate Services. “The invisible hand of commerce is in the decision making process of urban verses suburban. People get a discount if they live in the suburbs and a premium when they live downtown.”
The 2004 documentary The End Of Suburbia argued that suburban sprawl is unsustainable. And that was when domestic crude was in the $37 range - where it has more than doubled today.
“America took all its post war wealth and invested it into something that has no future,” say the filmmakers.
That same year a study by University of Toronto civil engineering professor Eric Miller concluded that commuting costs and the extra expense of running a larger suburban home often eat into any mortgage savings.
What surprised Miller was that a similarly valued home in the suburbs also ended up costing more to run. That’s because you get more space for the dollar in the 905 compared with the 416.
But more space means higher utilities and maintenance.
The study didn’t include the value of time spent in the car traveling or the environmental impact of more pollution.
“I think the finding was that there is no such thing as cheap land, the further out you go, the more it will cost you,” said Miller. “And that comparison would be even more dramatic today since the cost of gas, cars and parking has gone up since then.”
The study didn’t factor in the fact that downtown areas, which are becoming increasingly more attractive to buyers, tend to increase more in value than suburban areas.
(A 2008 study by Royal LePage found that a standard detached bungalow in Toronto would have appreciated by 104 per cent over a ten year period compared to a similar bungalow in the 905 at 78 per cent.)
“As gas prices rise I think there is an implicit discount on suburban prices, because there is a greater cost to the consumer,” said Soper. “You see that in so many areas of Toronto. There are neighbourhoods that are a ten minute commute from downtown, but you are paying a lot more for a tiny plot of land because of that.”
Gina Gokaldas, 24, says she moved downtown after a year and a half living in a new Markham condominium because of the long commute.
“It just took too long to get to work,” said Gokaldas, who moved to Markham from Montreal in 2009. “I just spent way too much out of my day traveling.”
Gokaldas says she chose Markham initially because of the value.
“Everything in my price range was like a shoebox downtown, so when I saw the property in Markham I was sold,” says Gokaldas.
Gokaldas paid about $300,000 at the time for her 900 square foot apartment. Similar apartments she said were almost half the size in the downtown area.
But the commute finally got to Gokaldas. Earlier this year she sold her home. She is now renting an apartment a block away from the Eaton Centre and it takes her 20 minutes on the subway to get to work.
“It’s night and day, although I miss the space I had,” says Gokaldas, who now lives in about 500 square feet until she decides to buy again.
Still, despite the dire predictions, sales in the suburbs have been doing well, even with high gas prices. While many potential home buyers are looking for places closer to the central core because of high transportation costs, affordability in the 416 has become a serious issue.
“Gas savings are certainly an incentive, but we have a lot of clients looking at the 905, not because they don’t like the 416, it’s because they can’t afford to find a house in their price point down there,” said Dave Elfassy, an agent with Right At Home Realty. “You might save some money in transportation costs, but you’re really giving up on space. They’re figuring it will tack on another 45 minutes to go to work, but they can live in a monster home in Richmond Hill, as opposed to a semi or a condo downtown.”
So, bigger space, or a stress free commute. While the dilemma for home buyers isn’t new, the reality is that the divide has never been more dramatic in an era of rising energy costs and home prices.
“Maybe the answer is to find that job in the burbs or work from home,” laughs Elfassy.
Monday, October 3, 2011
Renewing Your Mortgage – A Valuable Opportunity
Think of your mortgage renewal as a valuable opportunity. A chance not only to take advantage of today's great rates, but also get a mortgage product that better fits your current needs.
When you receive a renewal form from your current lender, don't simply sign it without knowing all your options. If you do so, you could be paying a higher rate, and end up with a mortgage that might not be best suited to your needs.
Instead, talk to us – we will discuss your interest rate options, and can arrange a rate hold for you.
We will also help you with a customized mortgage strategy. By the time your mortgage comes up for renewal, you are most likely in a different financial position than when you first obtained the loan. As our financial and life circumstances change, so does the mortgage product that is best for our needs and goals. For example, you may wish to access your home's equity to consolidate other debts, or perhaps help pay for post-secondary education.
At renewal time, make sure you get the most from your financing. We can speak to any concerns you may have about interest rate trends and advise you on what to do as your mortgage renewal approaches.
When you receive a renewal form from your current lender, don't simply sign it without knowing all your options. If you do so, you could be paying a higher rate, and end up with a mortgage that might not be best suited to your needs.
Instead, talk to us – we will discuss your interest rate options, and can arrange a rate hold for you.
We will also help you with a customized mortgage strategy. By the time your mortgage comes up for renewal, you are most likely in a different financial position than when you first obtained the loan. As our financial and life circumstances change, so does the mortgage product that is best for our needs and goals. For example, you may wish to access your home's equity to consolidate other debts, or perhaps help pay for post-secondary education.
At renewal time, make sure you get the most from your financing. We can speak to any concerns you may have about interest rate trends and advise you on what to do as your mortgage renewal approaches.
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