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Taginflated mortgage penalties

Considering a Second Mortgage? It can save you money!

Home Finances

Quick, what’s the first thing that comes to mind when you think of “second mortgages”?   For some it could be that shady-looking character in a smoke-filled pool hall… guys with gold chains and a baseball bat nearby. Maybe you’re thinking of someone in financial trouble? Or, perhaps it’s just someone who doesn’t want to pay outrageous costs and penalties to refinance their existing mortgage.

The mere mention of second mortgages conjures up all sort of images. Most of them, negative. For many, a second mortgage can be a last-resort solution during a financial crisis. For several others, it can be an opportunity to save money. That’s right, to save money.

Sure, second mortgages carry a higher interest rate than first mortgages, but they can also serve a purpose. One of those purposes can be to save you money. Yup, I said it again. There are some new trends emerging with today’s new mortgage products that are forcing consumers to seek other options. Two of these trends are INFLATED PREPAYMENT PENALTIES and NO FRILLS MORTGAGES! Continue reading “Considering a Second Mortgage? It can save you money!”

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

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

Mortgage penalty calculations.. More important than the interest rate.

greedy banker

WHY ISN’T ANYONE TALKING ABOUT THIS?

You bought a home…  you need a mortgage.. what’s the first question you ask your Banker?  “what’s your best interest rate?”.  And the second question is usually, “what product should I choose?”.

Almost no one asks about Mortgage Penalties or how they are calculated.  After all, how often does anyone have to pay a penalty, right?   WRONG!   $10,000, $20,000, $30,000 and higher.  This is how much penalties can add up to… these are real numbers.   And guess what?  This isn’t some unknown bank or small lender.. These are coming from the BIG SIX BANKS.!!

Here’s a little known stat…. “Canadians change their mortgage every 3 years, on average”.  Ask anyone that’s owned a home before.  Chances are, they’ve had to deal with a mortgage penalty at some point..  and for most of them, it’s an embarrassing subject.   After all, who wants to admit to being the victim?  Check out the stats… Continue reading “Mortgage penalty calculations.. More important than the interest rate.”

RBC announces ’employee pricing for mortgages’.. and it’s April Fools day.

RBC-BankRBC is coming out with their employee pricing program for mortgages… yet again.   And like last year’s promotion, it deserves a closer look.. or at least some exposure.

Last year, the program promised to “break through the clutter of price wars within the mortgage marketplace”, to quote Sean Amato-Gauci, Senior VP at RBC.    It was a twist on the auto industry.

And like last year, they aren’t putting their actual interest rate isn’t going to be advertised in any print.  They are hoping Consumers will be intrigued enough to call or walk into a branch to get the actual rate.   Well, I’ll save you the suspense.  Rumors say it could be as low as 2.69% for a 5 yr fixed rate product.  Hey, that’s a good rate.  It’s a competitive rate.  But it’s not the best mortgage out there!   Check out these facts… Continue reading “RBC announces ’employee pricing for mortgages’.. and it’s April Fools day.”

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