News & Ideas
Broker Debate: Reverse Mortgages
April 1, 2014
I was recently quoted in online mortgage magazine on the topic of reverse mortgages.
Click here to read the article.
If you are 55 or older, you can take out upto 50% of the equity in your home as tax-free cash. But, unlike a traditional loan, you never have to make a payment until you choose to move or sell – although you can make payments if you so choose.
This may be an option for some but not for all. Contact me to help you make that decision.
Top 7 List to Protect Yourself from Payment Shock
October 7, 2013
Click here to download the Top 7 list to protect yourself from payment shock
You work hard to invest in your home. Did you think about protecting your investment?
July 5, 2013
When you are in the midst of purchasing your home and dotting the i's and crossing the t's on your mortgage documents, you probably hear a lot about mortgage insurance.
What is mortgage insurance?
Mortgage insurance is simply a term life insurance policy that is designed to cover your mortgage if you die during the term. However, in the event of death it only covers the remaining balance of the mortgage.
Do you need it?
Obtaining insurance to cover your debts is important and ensures that the debt is taken care of in the event of a death.
Are there alternatives to mortgage insurance?
There definitely is! Life insurance is not only better but more cost effective. In the chart below, I'e outlined the major differences between mortgage and life insurance.
Based on the above analysis, mortgage insurance is not necessarily what you need, but you should consider a good term life policy to protect the investment in your home and your family’s ability to stay there. Whatever name you give it, life insurance that covers the value of your mortgage is a good idea. Having life insurance that can do double duty is usually the most effective way to provide for your dependants.
If you have any questions, don't hesitate to contact me.
Reduce Your Mortgage Penalty!
June 15, 2013
If you are selling or refinancing your home, be aware that your lender will charge you a mortgage penalty if your term isn't due yet. (Click HERE to calculate your mortgage penalty)
Why? Well, Banks primary business is making money and by breaking your mortgage contract early, they are at risk of loosing interest on the monies you borrowed.
Mortgage penalties can be significant and often times makes selling or refinancing a home impossible.
However, there are significant strategies in reducing your mortgage penalty. For example, by taking advantage of your mortgage prepayment privileges, you can reduce your mortgage balance and hence your mortgage penalty.
Let me use my expertise to help save you time, money and frustration.
If you have a mortgage penalty, call me today to save money!
Yield Spikes! Fixed Rates May Follow...
May 29, 2013
If you’re house hunting or thinking of refinancing, and you don’t have a mortgage rate hold, consider getting one. Canada’s 5-year bond yield just pierced a 3-month high. That means that here’s a good likelihood that fixed rates will creep up higher. (Bond yields steer fixed mortgage pricing, most of the time.)
A few lenders have already announced higher rates earlier today—with increases of 5-10 basis points on longer fixed terms.
For the little that it’s worth, major economists have again moved back their forecasts for the next Bank of Canada rate change. Now they're calling for a hike in late 2014 (Source: Reuters). But that says nothing about fixed rates today.
And it's always worth repeating: Fixed rates routinely increase well before the Bank of Canada tightens monetary policy.
Looking to buy or refinance - don't hesitate to contact me through email or my direct line at 416-456-3062.
Have a successful day!
Toronto Star says "Use a Mortgage Broker"
April 30, 2013
The Toronto Star posted an article in support of using a mortgage broker.
"Mortgage shopping can be daunting for those who have never done it before. It’s tough to know you’re getting the best rate, or, if the terms and conditions of the mortgage are best suited to your specific circumstances. And haggling may not be one of your strong suits. All of these are reasons to consider enlisting the services of a mortgage broker. A broker has access to a variety of lenders and has the educational background and training to provide a consumer with choices that fit their needs"
Read more HERE
Get into your home quicker with a Gifted Mortgage Down Payment
April 29, 2013
The minimum down payment required to purchase a home is 5% and for many first time buyers, coming up with this amount can be quite challenging without a little bit of help. If financial assistance is available to you from a relative or immediate family member then a gifted down payment may solve your woes.
Today, the minimum down payment on a home is 5% and if you don't want to pay the CMHC mortgage insurance, you'll need to come up with 20%. Financial assistance in the form of a gift can help you in either scenario.
How do gifted mortgage down payments work?
Gifted down payments must come from a relative or immediate family member (gifts from spouse are not acceptable).
Lenders will require a letter of confirmation verifying the money is a "genuine gift", requires no repayment and states relationship of the giftor to giftee.
You will also need to confirm the gifted down payment has been received in your account prior to closing on your purchase.
If you would like more information about gifted down payments or how to get pre-approved for a mortgage, don't hesitate to contact me.
Bank of Canada Announcement - No change to the Prime Rate
April 17, 2013
Let's keep this report simple. The Bank of Canada has decided to maintain the target for the overnight rate at 1 per cent. It has been like that for over 2.5 years. Economists say that a rate increase won't be happening this year.
What this means to you? For those on a fixed rate - nothing. For those on a variable rate, the prime rate (which is currently at 3%) is not changing and therefore, neither will your mortgage rate :).
The next scheduled date for announcing the overnight rate target is May 29, 2013
Keep your mind at ease with a 10 year rate
April 15, 2013
When mortgage rates are at ultra-low levels, ten-year fixed rates become more appealing because they make trying to time your mortgage term selection with future rate increases much less of an issue. That said, ten-year terms are not normally well priced. However, over the past year that has changed dramatically.
I know – many of you would argue that the odds still favour shorter terms and let’s admit it, we all enjoy the instant financial savings brought forth with shorter terms (ie: 5 year fixed).
However with record-low 10 year fixed rates, it’s getting very difficult to reject decade-long rates. If you think about it for a moment, rates will move back into the more normal range at some point in the not too distant future. And for those taking shorter terms may well look back on this as a missed opportunity.
At the moment, 10-year rates are far below average, at less than 3.70%. Just 2 years ago, rates were hovering at approximately 5.60%.
Now, Let’s take a look at the 5 vs. 10
At the moment, you can get a full-featured 5-year fixed for 2.99% or less. In order for the 10-year fixed to be cheaper than a 5-year fixed, 5-year rates must rise over 1.70% in the next 60 months.
For example, using a break-even analysis if you got a 2.99% five-year fixed today and renewed into a 4.70%+ five-year fixed in 2018, you would have been better off taking a 10-year fixed. Note, however, that statement is based solely on a comparison of regular mortgage interest. There are numerous other considerations with term selection, not the least of which are early breakage penalties.
Something to consider.....