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!”
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.”
Fixed mortgage rates are at an all-time low. If you have a mortgage that is over 3.09%, then you should consider breaking it, paying the penalty and getting into today’s lower rates.
That’s short answer… the full answer is a little more complex but, it’s really just simple math. If the savings is greater than the cost to break, then the answer is obvious. You should do it! I’ll give you some real life examples of clients that could be savings huge $$s today if they paid their mortgage and the penalty and went into a new lower rate mortgage…. check out these success stories….
Continue reading “These 3 clients broke their mortgages, paid a penalty, and still saved between $9,000 and $26,000!”
A few weeks ago, I posted an article about one of my readers that had the potential to save $15,000 by breaking the mortgage and getting into a new 5 year fixed rate. This was a net savings. The actual savings was just over $20,000 less the penalty of $5,000.
This week, we had an even bigger savings. My clients are in a 10 yr term at 3.59%, with a $710,000 balance and 8 yrs to go. The penalty to break is $6500. The savings is $29,000. Result is a net savings of $22,500. Wow! $22,500 savings over the next 5 years! That’s $4500/ year in savings!
This type of savings opportunity is extremely rare. I’ve only seen this level of savings a few times before. We can thank the record low interest rates for that.
If you are in a mortgage with a rate that’s above 3.20%, then you could be missing an opportunity to save $$thousands. You should at least consult with a Mortgage Broker to do the math. Remember, I haven’t even listed the lower rate product options available, such as Variable rate, or a 3 year fixed rate. It’s worth looking into.
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 firstname.lastname@example.org
Look, I don’t advocate paying penalties, however, if there is an obvious savings to be had, then you have to do it. We’ve reached a point where interest rates are so low, it’s worth a review. Here are some recent experiences with real people…. Enjoy.
I had one of my readers contact me about breaking his mortgage… His current mortgage with a good lender.. a Non-bank lender.. his rate is 3.59%. He took a 10 yr term last year. Balance was over $500k. So with 9 yrs remaining, we reviewed his options.
This was a no brainer. Penalty to get out was under $5,000 (lucky he was with a non-BIG SIX BANK). But the savings over the next 5 yrs would be $20,500. His net savings is $15,000. Would you I recommend he break the mortgage? Absolutely! Continue reading “$15,000 savings by breaking his mortgage early and getting into today’s low rates.”