Archive for the ‘Mortage Tips’ Category

Different Types of Mortgages and Rates

Wednesday, July 10th, 2013

There are many different types of mortgages and rates available in today’s marketplace. The fixed rate mortgage loan offers the most stability and terms that do not change over the life of the loan. Adjustable rate mortgages allow borrowers to take advantage of hoped-for decreasing mortgage rates in the future. Low-Interest/High ratio loans are ideal for home buyers who don’t have a large sum of money for a down payment.

 

Qualifying for a Mortgage

A conventional mortgage is a mortgage for less than 80%-in other words the borrower provides at least 20%-25% as a down payment, and is either fixed or variable rate loans.

With fixed-rate loans, the payments remain the same throughout the term of the loan.  This is ideal for someone whose income is expected to remain stable throughout the year and who has a low tolerance for risk.

An adjustable rate mortgage loan is a good idea if the borrow believes rates will decline in the near future. This loan rate is tied to the prevailing market prime rate and rises and falls as the prime rate goes up or down. Variable rates are typically lower than adjustable rates and the initial rates are usually very low to make them attractive to borrowers.

If rates do decline, the payment remains the same, but more of the payment is applied to the principal, allowing the loan to paid off earlier. If rates do begin to rise, the loan can be refinanced to a fixed rate.

Low-Interest/High Ratio Loans

A low-interest/high ratio mortgage is a mortgage where the borrower provides a down payment of less than 20%. Mortgages for 75% or more require mortgage insurance, usually provided by Canada Mortgage and Housing Corporation (CMHC) or Genworth. The insurance premium (of up to 7.3% of the mortgage amount) offers the lender the assurance that they will be repaid should your default on your mortgage.

This is merely an overview of mortgage products available to borrowers. Check back often for information on the vast array of products and variations offered to today’s Canadian home purchaser.

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.

 

Five Tips On Qualifying For The Best Mortgage Rates

Wednesday, May 1st, 2013

Your credit report will be one of the primary documents a mortgage lender will reference when determining whether or not you qualify for their best mortgage rates. That means the process of qualifying for a mortgage begins long before you decide to buy a home!

Here are Five Tips that will help you qualify more easily:

The number one tip on qualifying for the best mortgage rates is pay your bills on time – every time. If you can, set up on-line automatic payments from your checking account so you don’t miss a payment deadline.

The number two tip is to not accumulate too much credit card debt. Having too many credit cards or just two or three cards charged to their maximum negatively impact your credit rating, even if you pay the balance due on time each month.

The number three tip is to have enough cash on hand to make a substantial down payment. The more you put down on your mortgage, the less risk the lender perceives in giving you a loan, because of the dollar amount you invest up front.

The number four tip is to be prepared. Gather together all your paperwork including pay check stubs, proof of self-employment income, listing of debts and assets and a current bank statement and any other information needed.

The number five tip is to talk to us about your financial situation. Find out if you can pre-qualify. We’ll give you information  about what lenders require in order for you to qualify for a more favorable interest rate (more income, less debt, higher down payment, etc.).

Be sure to contact us when you are ready to take that next step.  Call Justin at  604-736-1855

When Rates Are No Longer The Major Deciding Factor

Thursday, April 18th, 2013

Mortgage rates are normally based on the Bank of Canada rate which is presently 1%. The rates vary slightly between financial institutions, and are presently ranging from 2.74 to 4% depending on the length of the term and whether you choose a fixed or variable rate.

Check out our current rates here.

 

The rates that YOU will be offered are based on the amount of your down payment and your credit rating.

In this market place we look for the BEST combination of rates and features. Depending on your needs and circumstances we look for a package that has great flexibility and good terms.

 

rates plus benefits

 

Here are some of the features that are available:

Prepayment – With a pre-payment privilege, you can make payments toward the principal portion of your mortgage over and above your monthly payments.

Closed mortgages have different types of pre-payment options. The amount you can pre-pay becomes important if you get bonus payments, a windfall or an inheritance.

An open mortgage means you can pay the entire principal sum without notice. This is a good option if you are self-employed or if you get regular bonus payments.

 

Portability -  This option allows you to transfer the balance of your current mortgage at the existing rates and with the existing terms and conditions, to your new home.

 

Expandability – If you need additional funds down the road, will your mortgage terms allow you to increase the principal amount? Normally the new rate will be a blended amount of the initial mortgage rate and the current rates. If you know you have a large renovation project planned, or if the kids are off to university this is a good option.

Do  YOU Prefer Security or Flexibility?

Mortgages are available with closed, open and convertible options, with fixed or variable rates. The options you choose should be based on the market (going up or down), on your financial goals and on your risk tolerance (desire for long-term security).

 

There are Two Rate Structures to Choose From:

A fixed-rate mortgage will remain the same for the length of the negotiated term. Your payment schedule is established in advance. You can choose either an open or closed mortgage, depending on the term.

A variable-rate mortgage fluctuates with the current market rates. Your monthly payment will remain constant (usually for a year or two), but the amount allocated to your principal will vary. If rates are going down, this may be a good option. If rates are start rising, you may want to convert to a fixed-rate mortgage.
If you are on a tight budget, you may be willing to pay more for peace of mind.

 

There are Three Payment Types to Choose From:

Open Mortgage
– This type of mortgage offers a great deal of flexibility, as it can be repaid in part or full at any time without penalty. This is a great mortgage if you believe interest rates are moving down or if you plan to move in the near future.

Closed Mortgage – Interest rates are fixed for the full term of the mortgage, and you will have to pay a penalty to change the agreement conditions. This type of mortgage is ideal for buyers who think that interest rates will rise and who are not planning to make any moves over the term of the mortgage.

Convertible Mortgage – With this mortgage you have the flexibility to convert to a longer closed mortgage at any time without penalty. If  rates rise, you can lock in.

 

Need a Mortgage?

If you are planning on buying for the first time, moving to a new home or renewing your mortgage, you should know where you stand. Please give us a call at 604-736-1855

More Canadians Are Now Debt Free

Friday, October 12th, 2012

Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have been constantly warning Canadians about borrowing too much.  They have been repeating their warning during virtually every news conference for the past few years.

Vancouver Mortgage Rates

Pay down your debts? or save?

It  appears that Flaherty’s and Carney’s messages are finally getting through to Canadians

A new poll suggests more Canadians are living debt free this year compared to 2011.

The annual RBC survey found that 26 per cent of respondents had no personal debt — excluding mortgage debt — in 2012, up from 22 per cent last year.

In the scheme of things,  a 4% jump is pretty significant.  But the big caution is that the information is coming from a poll and polls can include “wishful thinking.”

The poll also found a majority of respondents — 51 per cent — said it’s more important right now to pay down debt rather than save and invest for the future.

Most financial advisers would encourage you to do both!  Pay your debt down AND save for the future.

More information on the Poll.

Please give me a call if you are planning on buying a new home, or have to renew your existing mortgage.  I will work with you to get the best mortgage possible, with the least amount of hassle.  Justin:  604-736-1855

 

New Mortgage Rules May Make Refinancing or Switching Mortgages Harder

Tuesday, July 17th, 2012

Ottawa keeps on harping on the fact that Canadians are burdened by record breaking debt levels.  The major concern is that the inevitable increase in interest rates could cripple hundreds of thousands of individuals and families who are currently living on the edge.  The rate of debt to disposable income in Canada is at 152 per cent, which means many Canadians would have to declare bankruptcy when interest rates increase.

The new mortgage rules which went into effect at the beginning of July have reduced the maximum amortization for a government-insured mortgage from 30 years to 25 years.

In this CTV video,   Brad Lamb of Lamb Development Corp. explains how changes to mortgage rules might affect buyers and existing home owners.