Tag Archives: shopping for mortgage rates

3 things that do or don’t change with a Bank of Canada rate cut

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Your Home & Mortgage
 
When you’ve got “rate envy”, does it make sense to refinance?Who would have believed that mortgage rates would have such a continued downward trend? Mortgage shoppers are looking at some of the lowest rates in history, and many homeowners with existing fixed-term mortgages are experiencing some “rate envy” about today’s rock bottom rates.It might be worth a conversation about your options.
 
Typically, we think of a fixed term mortgage as a non-negotiable contract. And it’s true that there are financial penalties to re-negotiate. But, many clients have been asking for a mortgage analysis – a detailed look at the penalties versus the payoffs – to determine whether it’s worth refinancing.
 
What does it cost to get out of your existing mortgage? Generally, you can expect to pay the greater of either a) three months’ interest, or b) the interest-rate differential. The interest rate differential can be high in some cases; your mortgage lender will expect you to pay them the equivalent of what they will lose by releasing you from your mortgage and lending the money at current rates.
 
So is it worth it? For some homeowners it can be an important moment of opportunity, while for others, it may not be worth the costs involved. Most lenders will include the cost of the payout penalty and other costs into the new mortgage so you don’t have to be out of pocket to complete the transaction.
 
I would be happy to help you make a realistic assessment of your situation and help you determine if your benefit outweighs the cost. With rates where they are today, there’s never been a better time to talk.
 

3 things that do or don’t change with a Bank of Canada rate cut

  1. The prime rate in most cases will change, but lenders decide how much of that cut they will pass on to consumers, if any. If you have a variable mortgage, you are now paying less; sixty per cent of the two recent cuts are now reflected in lower variable rates. Take advantage and keep your payments the same so you pay off your principal faster.
  2. Fixed rates don’t, they are influenced by the bond market.
  3. Variable mortgage approvals don’t, they are based on a qualifying rate, which means your borrowing power likely won’t increase.

 
Thinking of falling into home ownership?
 
Let me help determine how much home you can afford and pre-approve you before you start shopping. We’ll also discuss downpayment options and all of the costs associated with buying a home. Don’t be tempted to rush into anything just because the holiday season approaches so quickly. It’s best to make sure you find the right house and stick with your budget. If you are thinking of jumping into homeownership this fall, let’s have a conversation!
 
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Peter Paley Canadian Mortgage Award 2015

Thinking of Buying a Home ? Contact Niverville Credit Union

Thinking of Buying a Home ?

 

 
Looking for a New Mortgage , Renewing your Mortgage
 
Contact Niverville Credit Union Logo
 
Darryl Rempel — Commercial Account Manager
 
62 Main Street, Box 430
Niverville, Manitoba, R0A 1E0
Phone : 204 388 4747
Fax: 204 388 9970
Winnipeg Direct: 895 2000
 
Website: http://www.nivervillecu.mb.ca/index.php
Email: info@nivervillecu.mb.ca
 
Niverville Credit Union

5 things to know before renewing your mortgage

By on February 5, 2014
 
mortgage_due
 
The Bank of Canada has kept the key interest rate steady and banks have been quietly cutting their rates for fixed and variable mortgage rates. They are also fighting for a shrinking pool of borrowers so it sounds like a great time to renew your mortgage.
 
Yet many Canadians simply sign their mortgage renewal papers. A 2011 Manulife survey found that almost two out of three Canadians surveyed stayed with their current mortgage provider and didn’t negotiate.
 
“I don’t know why,” says independent mortgage broker Christopher Molder. “I guess money grows on trees. People are busy, their lives are busy, mortgages aren’t on their mind, the maturity dates comes and goes and they just sign back whatever is offered.”
 
If you are renewing your mortgage, here are five things to keep in mind before you sign that document.
 
The posted rate isn’t the best rate
 
Think of the posted rate as the opening offer in a negotiation or as certified financial planner Shannon Lee Simmons says, “Banks use the posted rate to provide a value proposition to their clients. They often start with the posted rate and then offer discounts to preferred clients. Consumers need to educate themselves and shop around. Even if you get the secret or discounted rate, if you only get rates from one financial institution, you may still be paying a premium compared to other lenders.”
 
“Canadians really trust Canadian institutions, especially banking institutions,” says Molder. “The banks play on that a little bit. They’ll play dumb, offering the posted rate and leave it up to the borrower to negotiate and play the game.”
 
Shop around before you negotiate
 
Do your research before you begin negotiations and always ask for a better rate. “Of course, if a borrower asks, they’ll get a better rate,” says Molder. When it comes to researching mortgage rates, Molder says it’s very easy – just go online and check the rates offered by various lending institutions.
 
Once you know the rates offered for your preferred mortgage term (fixed or variable) , then talk to your current provider and ask them to provide a competitive offer. “In all cases,” says Molder, “Unless it’s a crazy low interest rate that has been requested, they will come down. They always come down. There’s always room for renegotiation.”
 
Bank or broker?
 
The general belief is that brokers can offer a better rate than banks due to their access to multiple lenders. The Bank of Canada survey found that using a broker can result in getting a lower rate. Part of that is due to them getting multiple quotes from various institutions.
 
Being good and loyal to your bank makes no difference to your rate
 
Are you paying down your mortgage and cutting years off your amortization? That’s great but it won’t make a difference when renewing your mortgage.
 
Are you a loyal customer? Have you been with your bank for years and do everything with them? That also doesn’t count when it’s time to renew your mortgage. A 2011 Bank of Canada paper found that loyal customers may not get as good a deal with their bank as they would if they went to a different bank as a new customer. So if you’re looking for a better deal, considering going to a different lending institution.
 
Check the terms before you sign
 
The cheapest rate may not be the best rate so always read the small print before you sign. Make sure the rate you choose offers other options such as the ability to pay extra on your mortgage and clearly defines any penalties should you decide to break your mortgage early.
 
Simmons says, “Start shopping around about four months before renewal – don’t leave until the last moment.”
 
Source: Global News
 
MORTGAGE ADVICE FROM DARYL:
 
Maximizing your renewal can take on many forms, I strongly urge those with renewals to explore their options and get the mortgage advice they need. Too many times I see borrowers staying with their existing lender just because it is “easier”.  Like a good fitness plan, a little bit of pain goes a long way to your financial well being.
 
Daryl Harris, AMP
 
Source:Daryl Harris Mortgage Broker