Carolyn Thomas | Invis Inc.

A peek behind deeply discounted 5-year rates.

thomas-carolyn — Wed, 08 Feb 2012 21:25:27 +0000

When considering a deeply discounted 5-year rate, keep in mind that cheapest isn’t always best. Strangely, we know that’s true when we’re shopping for anything else – but we still tend to believe that lowest rate is the one and only factor in choosing a mortgage. But, that low-rate mortgage could actually cost you more in the long run.
An amazing cut-rate mortgage could have you locked in to a very rigid contract filled with financial “trip lines” that could work against you down the road. That’s why it’s important to check the fine print. For instance, is the mortgage fully closed? That means you’re not leaving the lender unless you sell your house, so your options are limited and you have no negotiating power if your needs change in the next 5 years. Low or no prepayments: means you have no or limited ability to chip away at your principal to reduce your overall cost. Maximum 25-year amortization can take away flexibility you may need later. Many prudent homeowners take a 30-year amortization but set their payments higher using a 25-year or lower amortization. This gives them the option to reduce their payments should an emergency arise or a special need like maternity leave. For first-time buyers too, a 25-year amortization means higher payments than a 30-year amortization and could limit their entry into the market.
Spot a deeply discounted 5-year rate? Talk to us first. We’ll always help you find the right combination of low rate with the options you need to achieve your goals for homeownership and the financial future you want.

Don’t renew your mortgage with your eyes closed

thomas-carolyn — Wed, 08 Feb 2012 21:24:09 +0000

When your mortgage comes up for renewal, your lender will send you a letter suggesting you renew at their current offer. If you do, you’ll be renewing your mortgage with your eyes closed! This is your moment of opportunity to negotiate the best possible deal, either with your current lender or with a new one. Do you know if the same lender remains your best choice? If you don’t, you aren’t alone.

At the end of 2011, Manulife Bank of Canada released the results of their latest consumer debt survey. They found that two-thirds of homeowners (65 per cent) did not compare products from several different lenders to make sure they were getting the best deal the last time their mortgage came up for renewal. Twenty per cent stayed with their current lender and did not negotiate, while 45 per cent stayed and negotiated but did not shop the market. Interestingly, the youngest age group surveyed (30-39) were the most likely to shop around (41 per cent) but also the most likely to stay with their current lender and not negotiate (24 per cent). This age group is in the most hectic period of balancing work and children, which often causes things to be left to the last minute and it’s easier to follow the path of least resistance.

You could save a considerable amount of money if you renew at a lower rate. A half percent difference on a $225,000 mortgage with a 20 year amortization can mean over $5,200 in interest savings over five years. Wouldn’t it be better to put that amount towards reducing your mortgage principal?

You also need to consider that your mortgage needs may have changed. This may be a good time to roll your high-interest credit cards and other debt into your mortgage to get one lower payment, boost your cash flow and save on interest costs. Or you may want to take some equity out for renovations, a second property or for investing.

Keep in mind that there are some administrative details and costs when switching your mortgage to another lender, but don’t let this discourage you from finding out more. It doesn’t cost you anything to investigate your options or get a second opinion. When you switch your mortgage to a new lender, you will go through an approval process similar to when you took out the original mortgage. You can either assign your existing mortgage or you can apply for a new one should you want to borrow a larger amount to consolidate your high interest debt or complete some renovations.

Your lender may charge a discharge fee, and you may need to pay legal and appraisal fees if you are getting a completely new mortgage instead of switching your existing one. At that point, you should assess if the money you will save by switching to a better interest rate offsets those costs. The cost for you mortgage life insurance may also change. You won’t have to pay for your mortgage broker’s service (oac) because the lender selected pays compensation for the services and mortgage solution provided to you.

If a renewal is in your financial future, bring us your renewal notice four months prior to your renewal date. There are some great options out there; we’ll help you look around.

Get pre-approved and don’t miss the Great Canadian Mortgage Sale!

thomas-carolyn — Tue, 31 Jan 2012 02:42:26 +0000

The days are getting longer and mortgage rates are wonderfully low as the spring housing market approaches. In fact, homeowners are locking in some of the lowest rates in history, although those low rates could reverse at any time so make sure you are pre-approved.

With a pre-approval, you’ll know the amount you qualify for and how much it will cost you to carry the mortgage, and your interest rate will be held for a specified period of time, typically 120 days. This way you don’t have to worry about rates rising while you are house hunting, and both realtors and sellers will know you’re serious, which means you’ll be in a good position to get the home you want. You also won’t waste any of your valuable time looking at houses that are out of your price range. And by not underestimating what you can afford now, you can save over the long term if you don’t need to purchase a trade-up home later.

Your pre-approval is a conditional mortgage approval that gives you mortgage amount, term, interest rate, and expiry date. Keep in mind that you’ll need to substantiate the information you provided for the pre-approval when you go back to the lender for the actual mortgage.

Contact me to get pre-approved today. You don’t want to miss out on the Great Canadian Mortgage Sale!

Growth of mortgage debt slows: CMHC

thomas-carolyn — Wed, 30 Nov 2011 18:30:13 +0000

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/growth-of-mortgage-debt-slows-cmhc/article2253438/

Growth of mortgage debt slows: CMHC
The rate at which Canadians have been racking up new mortgage debt has slowed in recent months, lending credence to the theory that the country’s housing market will hold up, Canada Mortgage and Housing Corp. suggests. The…

Why a Mortgage Pre-Approval?

thomas-carolyn — Wed, 09 Mar 2011 19:39:18 +0000

A Mortgage Pre-Approval – A Smart First Step When Looking for a Home

Getting a pre-approval for mortgage financing before you start to look for a home is a smart move.

A pre-approval assures you of a locked-in mortgage rate for a set period – so there is no risk of any interest rate increases while you are house hunting. The great news for those who turn to a mortgage broker is that a broker may be able to obtain a longer pre-approval rate hold. Also, with a pre-approval, you’ll get a clear-cut sense of how much you are eligible to borrow.

Keep in mind that the property you intend to purchase – along with your supporting information (such as income, down payment and employment history) – has to meet the financial institution’s criteria to be approved for lending. Also, a pre-approval is not a guarantee of financing, and does not eliminate the need to make a conditional offer.

If you are planning on looking for a home this spring, call an Invis mortgage professional today to get pre-approved. He or she can get you an extremely competitive interest rate and length of rate hold – you’ll soon be on track to finding the home that’s ideal for you and your family.