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Posted 1 Comment on Long term is almost always more expensive. Mortgage News

Long term is almost always more expensive.

long term contractsEver wanted to change cell phone providers?  How about internet providers?  Move your investments or rrsps?  Cancel that hydro or gas contract because you moved?

And how about mortgages?  When interest rates started heading down about 4 years ago, thousand of borrowers in fixed rate mortgages wanted to get out of their higher rates and start benefiting from the record low interest rates.

But borrowers were shocked to hear of unbelievably high early prepayment penalties…   Penalties of $15,000, $20,000, $30,000.    One recent situation had CIBC charging a $33,000 penalty on a $500,000 mortgage.  I’ve seen dozens and dozens of situations like this.   Almost all of these high penalties were from one of the BIG SIX BANKS…    Continue reading “Long term is almost always more expensive.”

Posted Mortgage News

You heard it here first!… Rule of thumb for choosing Variable over Fixed.

First For the past few years, the Bank of Canada has warned us about the imminent interest rate hikes.   Reminds me of the boy that cried wolf.    “Interest rates are going up…  soon!…  real soon…. really, really soon!!”   But last week, the new Bank of Canada Governor, Stephen Poloz, surprised many experts when he said rates would remain low for quite a while.

This announcement prompted many advisors to jump on the Variable Rate bandwagon and start recommending Variable rate over Fixed rate.   I agree…  Variable rate is the obvious choice for most of us today.   But I also noticed a familiar rule of thumb being quoted in the media.   So I wanted to set the record straight. Continue reading “You heard it here first!… Rule of thumb for choosing Variable over Fixed.”

Posted Money saving tips

Is there a better mortgage rate out there?

where to invest You’re 2 years into your mortgage term.  You got a great rate… or so you thought…? But now you aren’t sure.   So much talk about record low interest rates…  You begin to question..  Maybe there’s a better deal out there?   Did you choose the right product and Lender?  Has your mortgage advisor or broker contacted you during those two years?  Does this sound familiar?

We’ve all heard of buyer’s remorse….    That’s when you make a purchase, only to regret spending the money days or weeks later.    I’m seeing a lot of people second guessing their mortgage decision recently.   And I have news for you… RELAX! There is a way to check to and see if you made the right choice, and better still, there is a way to see if you can do better today. Continue reading “Is there a better mortgage rate out there?”

Posted 2 Comments on Another US Govt shutdown… could mean lower mortgage rates for Canada. Interest rates

Another US Govt shutdown… could mean lower mortgage rates for Canada.

debt ceilingRemember the U.S. Debt ceiling crisis in the summer of 2011?   Panic was an understatement.   That story dominated headlines for close to 2 months.   Stock markets dropped, but mortgage rates dropped, too.  In fact, fixed wholesale mortgage rates dropped 0.50% in the months leading up to the Debt Ceiling deadline, from June to August….  And continued to drop another 0.70% into 2012.

Mortgage rates hit all-time lows in the fall of 2011 and just kept right on dropping.  We hit our the all-time low in May 2013 before rates jumped almost 1.00% to our present 3.69%.  (This is for 5 year fixed mortgages.  Variable rates did not budge… Bank Prime rate has changed since Sept 2010…that’s important to remember as I will explain later) Continue reading “Another US Govt shutdown… could mean lower mortgage rates for Canada.”

Posted 1 Comment on Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options. Case study

Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options.

debt aminationA couple, in their 30’s, contacts me for a mortgage.  They want to buy a new home.  She is a teacher, he is a Manager at a computer firm.  Incomes are good.  I check their credit.  Let’s stop here for a minute..   If they had good credit, an approval is simple and we would provide the clients with several mortgage options.

But let’s assume that this couple ran into some debt and credit issues 3 years ago… and they made 3 different choices about how to resolve those credit problems.  Credit counselling, Consumer Proposal and Bankruptcy.  And I’ll bet the results will surprise you…I want to take you through each scenario and show you how long each of these 3 options affect your ability to finance a home.. Continue reading “Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options.”