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Another example of BIG SIX BANK inflated penalty calculation.. $13,634.00! Wow!

big-six-banks1 If you still think your local BANK is your best friend, think again.  Last week, one of my client’s discovered it would cost them $13,634 to exit their mortgage early.  Compared with only $2736 if they had chosen a BETTER mortgage Lender.

Here’s the details..  The clients had a $395,000 mortgage balance remaining.  Renewal date was October 2018.  Original term was 5 yrs and their rate was 2.77%.  The rate is competitive, but not any better than what I could have offered at that time.  There had to pay the mortgage out.

Penalty quote is $13,634.  That’s equal to over 14 months interest!!  Wow!  Incredible.   $13,634 compared to $2736.

I’ve shared many examples similar to this in the past.  It’s really simple.  DON’T FOCUS ON THE RATE!.   There is so much more to choosing a mortgage than just rate.  The average Canadian changes their mortgage ever 3 years.  And there are many reason this happens.. change of job, marital status, family issues, health issues, etc.

And if you are expecting your Banker to show you other products to compare, well, that’s just not gonna happen.  It’s like expecting Ford to send you to Toyota for a new car.  Not gonna happen. Do yourself a favour and speak with an unbiased, neutral professional. Speak with an experienced Mortgage Broker that deals with dozens of Lenders.  You’ll be glad you did.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Debt diversification vs Debt consolidation…who wins?

debt

ONLY IN CANADA

Attention:  Bankers, close your ears.. we don’t want you to hear this.  Credit card balances, lines of credit, car loan, student loan, home reno loan, personal loan..   If you have one or more of these and you own a home, you’re probably losing money by paying a higher interest rate.  In many cases, $thousands are lost and overpaid each year.   And your Banker is laughing and recording Record profits!!

It’s surprising how many of us have some, or all of these debts… and ALSO a house with lots of equity.  Yet, as Canadians, we somehow think it’s better to separate our mortgage from other debts.  We somehow think it’s good to pay down our mortgage but then rack up other debts.  This attitude has puzzled me for years.

check out this chart for one client.. tell me if this looks familiar: Continue reading “Debt diversification vs Debt consolidation…who wins?”

I have 2.39% for 5 yrs fixed available…but I wont sell it.

percentageIt’s true.  I have access to this great rate.  It’s around 0.20% lower than the best rate today.   And you won’t see me recommending it to my clients.

That’s right, I’m recommending they don’t take it.

Why?  It’s simple.  No, I don’t want my clients paying more on their mortgage. I want to see them PAY LESS to own their homes.  This is one of those products that carries an inflated prepayment penalty. Should the homeowner need to get out of their mortgage early, they will be hammered with a ridiculous exit cost.   We’re talking 10, 12, even 16 months worth of interest penalty.

Statistics clearly show we are paying or changing our mortgages every 3 years.   So, chances are, you will have to pay this penalty.   On a $300,000 mortgage, your penalty could be $9,000 or more.  Compared with $1,943.  That’s a $7,000 difference.

That 0.20% savings on the rate equals $600 per year..   You still think that 2.39% rate is great??

The next time you hear or see something that sounds too good to be true, it probably is.  If you aren’t sure, call me or an experienced Mortgage Broker for unbiased advice.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Credit Card hangover? Make 2016 a painless year….

debt animationWe’re well into January… and right about now, some of us are avoiding the mail for fear of seeing those holiday bills!  Ok, so besides avoiding the mail, what’s the best way to tackle those debts?

Here’s some helpful ‘did you know’ questions…  Enjoy! Continue reading “Credit Card hangover? Make 2016 a painless year….”

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