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Mortgage Research

Mortgage Research

8 Tips You Won't Get From Your Bank

8 Tips You Won't Get From Your Bank

If you’ve got a mortgage – or plan to get one this year – you probably know that it’s more complicated than it used to be just a few short years ago. That said, I have many tips and strategies that can help you get the mortgage you need, tweak the one you have, or help you plan for renewal. Here are my top eight:

ONE: To get the best deal, you need options. When you go to your bank, you’re talking to one lender. Their best deal might not be THE best deal. It’s also difficult to qualify at a bank if you are self-employed, have past credit issues or finding the stress test a challenge. Credit unions, alternative and private lenders are increasingly helping people get into new homes or refinance their mortgage.

TWO: Best-rate quotes are often meaningless. Mortgage rule changes have thrown mortgage pricing up in the air. Your actual rate depends on a whole slate of factors, which is why you can only get an accurate rate quote after an in-depth assessment of your personal situation.

THREE: The devil is in the details. People tend to focus on rate, but you can save thousands by making sure you get a mortgage that has fair penalties, allows you to prepay, and ensures you will also be treated fairly at renewal. Don’t end up paying exorbitant fees, or be forced to take a high rate at renewal.

FOUR: An insured mortgage might be a smart move. If your mortgage is “uninsured” and you want to switch to a new lender for a better rate at renewal, that lender will qualify you using a “stress test”, which may affect your ability to move your mortgage, and giving your lender no incentive to offer you the best rates. It’s possible that you can switch your mortgage to a lower-rate insurable mortgage that has more flexibility.

FIVE: A 30-year amortization can give you wiggle room on cash flow. A longer amortization (20% or more in equity required) allows you to minimize your mortgage payments and free up cash flow for uses like investing, business needs, postsecondary education, maternity leave, home maintenance, or other life situations. You can keep your payments at a shorter amortization and only use this flexibility if the need arises.

SIX: Monitor your credit score. The best rates go to borrowers with the best credit scores. Lenders are also paying closer attention to any warning signals that clients may have trouble paying their mortgage. If your credit slips and your lender feels your risk has increased, you may be offered a higher rate at renewal.

SEVEN: A rental suite can be a sweet mortgage helper. A home with a rental suite could help you buy a single-family home instead of a condo, get you into that neighbourhood you love, or help you offset mortgage payments in the house you’re in so you can become mortgage free sooner or have the freedom to channel money into other areas.

EIGHT: Plug your biggest money leak. If debt is choking your cash flow and you have enough equity in your home, you may be able to move that debt to your lower-rate mortgage and save thousands. Using home equity to pay down debt is one of my specialties!

Make sure your mortgage strategy is working for you and helping you build wealth. Get in touch for a review of your situation. 

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Bank of Canada Increases Key Rate October 2018



As many economists expected, the Bank of Canada announced today that it is increasing the overnight rate .25 per cent, noting that the “policy interest rate will need to rise to a neutral stance to achieve the inflation target.”

As for the pace of future rate increases, the Bank will take into account how the economy is adjusting to higher rates, household debt levels, and global trade policy developments. The next rate-setting day is Wednesday, December 5th.

Homeowners with variable-rate mortgages will see their rate increase along with a possible modest payment increase. Lines of credit will be similarly affected. Get in touch if you have a variable-rate mortgage and have questions about your mortgage strategy and whether you should lock in or not.

Make sure you have confidence in your mortgage plan. It’s very important to work with an experienced professional who knows the right questions to ask to assess your situation and provide the direction you need to save money over the long term. You’ll also save yourself a lot of time and stress!

We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.

View current Ontario mortgage rates here: Mortgage Rates

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2018: Fixed or variable-rate mortgage?



If you are rate shopping, you’ll notice that the lowest available rate will be for a variable mortgage, which is why we are  often asked: “what does variable mean and how is it different from a fixed-rate mortgage?”

With a variable mortgage, your mortgage rate will move in conjunction with your lender’s Prime lending rate, which in turn tracks the Bank of Canada’s rate, and will typically be quoted as Prime minus a specified percentage. Unless you have an economic ouija board, you won’t be able to predict what kind of rate ups and downs might be ahead of you.

With a fixed-rate mortgage, your payments are fixed for the term of the mortgage, which offers stability. Fixed-rates are usually better suited to first-time buyers or those who haven’t owned a home for a very long period. Ask yourself these questions: Do you like or need to know exactly what your payment is going to be over a longer period of time? Do you want to avoid the need to consistently watch rates? Do you have less than 20% down? If you answered “yes” to all or most, a fixed-rate mortgage could be the better choice for you.

A variable-rate mortgage is best suited to people who have a flexible budget and can tolerate slightly more risk. Ask yourself these questions: Do you watch market conditions? Can you handle any rate increases that could increase your payment? Do you have more than 20% equity in your home? If you answered “yes” to all or most, a variable-rate mortgage might best suit your needs. Most variables allow you to exercise an option to “lock in” a fixed rate at any time for the remaining portion of your mortgage term or longer. You can also set up your payments at what they would be if you took the higher rate, which helps you pay down your mortgage faster, and creates a financial buffer for you if rates rise later.

If the uncertainty of a variable rate is going to give you sleepless nights, you’re in good company. Many Canadians prefer the certainty of a fixed-rate mortgage. They know exactly how much they will pay over the term of their mortgage, and they can plan accordingly… with no financial surprises. However, lower-rate variable mortgages with a strong Prime minus offer give you the potential to save a lot of interest. And, if your circumstances change and you need to get of out of your mortgage, you will appreciate the lower penalty to get out of a variable versus a fixed-rate mortgage.

Your best option is to get professional and personalized advice. We would be happy to help you determine which option is best suited to your needs.

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Bank of Canada Maintains Benchmark Rate August 2018



The Bank of Canada announced today that it is keeping the overnight rate unchanged as they monitor the evolution of NAFTA negotiations and the outlook for inflation.

Household debt levels are improving, the housing market is stabilizing, and business investment and exports are “growing solidly”. The Bank noted that higher rates will be warranted but they “will continue to take a gradual approach.” The next rate-setting day is October 24th.

Get in touch if you have questions about your mortgage plan, or if you need a new mortgage, are renewing, or are looking to refinance for debt consolidation, renovations or other large expenditures. It’s very important to work with an experienced professional who knows the right questions to ask to assess your situation and provide the direction you need to achieve your homeownership goals and save money over the long term. Good advice early saves time and stress!

We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.

View current Ontario mortgage rates here: Mortgage Rates

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Prepare Early for your Mortgage Renewal

Simply put, it’s become a lot more complicated to renew a mortgage in Canada.

 

 

Some clients are surprised to discover they don’t qualify for the best rates with their current lender, or that they can’t switch their mortgage to a new lender for a better rate. Our advice? Start preparing early. Here’s why:

New accounting rules called IFRS 9 (IFRS stands for International Financial Reporting Standard) will cause lenders to pay closer attention to any warning signals that clients may have trouble paying their mortgage. As a result, if your lender feels your risk has increased i.e. perhaps your credit score has slipped, they may then offer you a higher rate at renewal, even if you have never missed a payment. Good news – download my MOPOLO app to monitor your credit score monthly!

Do you have an “uninsured mortgage”? If you want to switch to a new lender for a better rate, that new lender will need to qualify you using the new .”stress test”, which may affect your ability to move your mortgage, and giving your lender no incentive to offer you the best rates at renewal. I can help you understand your options. One of the things we’ll look at is whether we can switch your mortgage to a lower-rate insurable mortgage: a move that could offer huge savings over the long term. Not sure if your mortgage is insured or not? I can find that out for you.

Mortgage rate trends. While fixed rates are higher today than they were a year ago, many lenders are offering exceptionally low rates on their variable rate mortgages. In addition to offering the ability to save on interest, a variable mortgage can be significantly less expensive to get out of should you need to.

It’s critical that you work with a mortgage expert who has access to more than 50 different lending options, including credit unions that aren’t subject many of the same rules. So as soon as you hear from your lender about your mortgage renewal, get in touch! Or let’s have a conversation about credit improvement tips or discuss the potential impact of changes in your personal situation like reduced household income.

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No Bank of Canada Rate Change (May 2018)

The Bank of Canada announced today that it is holding the overnight rate steady, noting that the Canadian economy was stronger than expected in the first quarter, although housing has remained soft as it adjusts to new mortgage rules and higher rates.

However, labour income growth is solid, which supports “the expectation that housing activity will pick up and consumption will continue to contribute importantly to growth in 2018.” The Bank did hint that we could see potential future increases in order to keep inflation in check. The next rate-setting day is Wednesday, July 11.

This Spring lenders have been very aggressive with their pricing for variable rate mortgages, creating some of the best rates we’ve seen in many months. Clearly lenders are fighting for market share, making it a great time to be shopping for a mortgage!

Get in touch if you have questions about your mortgage strategy, or if you need a new mortgage, are renewing, or are looking to refinance for debt consolidation, renovations or other large expenditures. It’s very important to work with an experienced professional who knows the right questions to ask to assess your situation and provide the direction you need to achieve your homeownership goals and save money over the long term. Good advice early saves time and stress!

We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.

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