| What's First ... finding the Mortgage or the Property?
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Your priority is finding the right property. The right property is the one that
meets your objectives AND the one that can be yours at a price you can afford.
We can help start the process by finding out what's important to you.
- Has your family size grown or do you expected to grow?
- Is it time to reduce your space or get your living area all on one floor?
- Is this a relatively short term situation until you can move up to your dream home?
- Is your employment or income likely to change in the next few years?
- How quickly can you become debt free?
Once your priorities are clear, we can help you choose a mortgage product that is
best suited to meeting those objectives at a payment you can afford.
That will help avoid disappointment by shopping outside your comfort range.
We can also shop for a rate guarantee that will protect you against rising
rates while you're searching for just the right home or investment.
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| First Time Buyers... what to do?
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As a first-time homebuyer, there is a lot you need to know.
First, you need to decide what payment load fits with your lifestyle.
We can tell you what a lender will approve, but that might be significantly
more than you want to pay. Everyone is unique and people have vastly
different spending patterns.
Once you decide on the payment, we can help by answering these questions and many more!
- How much down payment is required?
- Is there a way to raise the down payment without actually saving all the money?
- What first time buyer programs are available?
- What's the best rate?
- What taxes are payable?
- Will it help if there is a suite in the house?
- Are additional funds available for home improvements?
- What costs are involved besides down payment?
- Can I make extra payments?
- Should I pay off other debts or save a bigger down payment?
Our goal is to give you the answers to all these questions as early as possible
in the shopping process. That way you can focus your energy on selecting the
right home. You'll know what to expect if you decide to proceed, and will be
able to avoid mistakes that sometimes happen when you're not an experienced buyer.
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| Borrowing More Money... is this a good move?
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Sometimes it makes sense to borrow money by increasing the mortgage
on your home. This is called refinancing.
It is always smart to get rid of your debts as quickly as possible,
so how can it make sense to increase your mortgage?
Well, sometimes we all find it necessary to take on debt for things
that just can't wait. When you first bought a home, it would have been
better to save all the money instead of taking out a mortgage. The
problem was that you needed a home for you or your family now, not 25
years from now. Time has passed since that original purchase and
perhaps your home needs to be enlarged or repaired. It might be more
economical to complete substantial improvements rather than to sell
and repurchase. Some repairs can't wait and further damage to the
property might cost much more than the increased mortgage.
Perhaps you have other debts that are at high interest rates. Refinancing
your mortgage to absorb the debt might be the way to dramatically reduce
the interest cost and let you get rid of the debt much faster. You can
pay off $10,000 of consumer debt at $300 per month in less than 3 years
at a total interest cost of approximately $500 by absorbing it into your
3% mortgage. The same debt will take nearly 4 years and $4,100 of interest
if you leave it on your 18% credit card.
We can help you analyze your situation and give you the information you
need to decide on the course that best fits with your lifestyle and objectives.
If you decide to explore this option, we can also help you compare staying
with with your existing lender versus moving your business elsewhere.
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| Renewing an Existing Mortgage - What to consider?
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All mortgages are written for a specific term ranging from 6 months to 10 years.
This applies to both fixed and variable rate mortgages. At the end of that time,
your lender generally offers to renew the mortgage for a new term at a specific
rate. You can choose the same term as you selected originally or something
completely different. You can also move from variable to fixed or fixed to
variable. Most importantly, on the date the mortgage is due for renewal
(known as the Maturity Date), the mortgage becomes completely open.
That means you are free to shop anywhere for a new deal since you are not subject
to any penalty for leaving one lender and moving to a new one.
Providing you have been making payments as agreed, your existing lender will
contact you shortly before the renewal date and make the offer to renew. They
will supply their current rates for various terms, request that you select
the rate and term you want, and then have you sign and return the offer.
You do not need to qualify and you are done until that term expires.
BUT ... accepting your existing lender's offer can also be a very expensive
mistake. Lenders often set the renewal rate much higher than the rate they
are offering to new customers. On a $300,000 mortgage a difference of only
.25% in the rate would cost you more than $3,600 over a 5 year term. You
owe it to yourself to find out if there is a better option.
Your existing lender will also wait until just before the renewal date to
make an offer. As a new customer, we have lenders that will guarantee your
rate as much as 6 months in advance. This can be very valuable in times of
rising rates. It's not fun sitting on the sidelines watching rates go up
and knowing that it's still 6 months before you are due for renewal.
Beware of a lender's offer to renew your mortgage early. They know you can
shop elsewhere at maturity and offer the early renewal to prevent you from
checking around. Early renewal offers often come with a warning that rates
are about to rise. This is an old scare tactic that is routinely used whether
rates are increasing or not. We strongly recommend you get some independent
advice before renewing or early renewing your mortgage. A broker's access
to a large number of lenders gives you many more options and can help save
some serious money.
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