Friday, April 20, 2018
Thursday, April 19, 2018
With the plethora of every changing mortgage rules and the access to banks, online lenders, investors, alternative lenders etc. and multiple types of mortgages, where does a home buyer start?
What is a broker? I have always used my bank, is that bad? I am overwhelmed and I don't know how to go about this? My friend was offered something else, why is it different for me?
I never try because I don't think I can get a mortgage?
The questions and or statements in regards to mortgages can go on forever! I have been a licensed mortgage associate with Brokers For Life DLC for 8 years now and I continue to get new questions every day. No ones situation is the same or equal when it comes to qualifying for your mortgage.
As your mortgage professional I try to make things simple by taking every potential client through the same process every time so I can truly understand your unique buying situation and make sure I tailor a mortgage to fit your needs.
I am a trained professional who is continually training and learning so I can take the confusion out of your mortgage experience!
I offer a free 5 star service, so call me and ask any questions you have in regards to mortgages and see if getting pre approved for a mortgage will be your next step!
Don't have any questions, but want to get started! Go to my website and apply online today!
Tuesday, April 17, 2018
Monday, April 16, 2018
Friday, March 23, 2018
Monday, March 19, 2018
Wednesday, March 14, 2018
Tuesday, March 6, 2018
Thursday, March 1, 2018
4 Signs You’re Ready For Homeownership
While most people know the main things they need to buy a home, such as stable employment and enough money for a down payment, there are a few other factors that may help you realize you’re ready, perhaps even earlier than you thought!
As a mortgage broker, it is my job to ensure that each one of my clients is getting the best service I can provide. Part of this means educating as much as possible when it comes to buying a home, which is why I’ve put together a list of 4 signs that may tell you that you are ready to become a homeowner.
You should have more funds available than the minimum of a down payment
This one may seem obvious, but it’s something that people may not realize until they actually think about it. It’s very difficult to afford a home if you only have enough money for a down payment and then find yourself scrambling for day-to-day living after that.
If you have enough money saved up (more than the minimum needed for a down payment), you may be ready to start house-hunting.
Your credit score is good
This might seem obvious at first glance, however, if you don’t have a good credit score, chances increase that you could be declined altogether or stuck with a higher interest rate and thus end up paying higher mortgage payments. If you have a less-than-optimal credit score, working with a mortgage professional can help you get on the right track in the shortest time possible. Sometimes a few subtle changes can bump a credit score from “meh” to “yahoo” in a few short months.
Breaking the bank isn’t in your future plans
Do you plan on buying two new vehicles in the next two years? Are you thinking of starting a family? Are you considering going back to school?
Although you may think you can afford to purchase a home right now, it’s extremely important to think about one, two, and five years down the road. If you know that you aren’t planning on incurring big expenses that you need to factor into your budget anytime soon, then that’s something that may help you decide to buy a home.
You are disciplined
It’s easy to say, “it’s a home, I’m going to have it for a long time so I may as well go all-in!”. While that would be nice, that’s rarely the case!
You must have a limit that you’re willing to spend. Sitting down with a mortgage broker or real estate agent and analyzing your finances is crucial. It’s important that you know costs associated with buying a home and what the maximum amount is that you can afford without experiencing financial struggles. IMPORTANT: This is not the amount that you are told is your max!
This is the amount that you calculate as your max based on your current monthly budget and savings plan. It’s quite frequent where I have clients tell me that their max budget is, say, $1200 and then when I run the numbers they could actually be approved for much more. Low and behold suddenly these guys are looking at homes that are hundreds of dollars a month higher than their initial perceived budget. It is up to you (with my help or pleading, when necessary) to reel things back in and make sure that you aren’t getting into something that affects the long-term livelihood of a well thought out budget or savings plan.
These are just four signs that you may be ready to purchase a home. If you’re seriously considering buying or selling, contact Amy Wilson at 780-919-0475 or email@example.com.
Go to my website to do an online application.
Thank-you Shaun Sarafini for this DLC blog post
Wednesday, February 28, 2018
Fixed versus variable interest rates
This is usually the more popular choice for clients when it comes to deciding on which type of interest rate they want. There are many reasons why, but the most unsurprising answer is always safety. With a fixed interest rate, you know exactly what you are paying every month and you know that the amount of interest being charged for the term of your mortgage will not increase and it will not decrease. Fixed interest rates can be taken on 1-year, 2-year, 3-year, 5-year, as well as 7 and 10-year terms. Please note, term is not meant to be confused with amortization. When you have a 5-year term but a 25-year amortization- the term is when your mortgage is up for renewal, but it will still take you the 25 years to pay off the entire debt. The biggest knock on fixed interest rates when it comes to mortgages, especially 5-year terms, is the potential penalty. If you want to break your mortgage and pay it out, switch lenders, take advantage of a lower rate, or anything like this and your term is not over, there will be a penalty. With a 5-year term, a fixed rate penalty can be anywhere from $1,000- $20,000 or more. It all depends on the lender’s current rates, what yours currently is, the length of time remaining on your term, and the balance outstanding. The formula used is called an IRD (interest rate differential) and the penalty owed will either be the amount this formula produces or three month’s interest- which ever is greater. Fixed interest rates, especially 5-year terms can be the most favorable. They are safe, competitive interest rates that you will not need to worry about changing for the term of your mortgage. However, if you do not have your mortgage for the entire term, it could hurt you.
Variable Rate Interest
The Bank of Canada sets what they call a target overnight rate and that interest rate influences the prime rate a lender offers consumers. A variable rate, is either the lender’s prime lending rate plus or minus another number. For example, let us say someone has a variable interest rate of prime minus 0.70. If their lender’s prime lending rate is 5.00% in this example, they have an effective interest rate of 4.30%. However, if for example the prime rate changed to 6.00%, the same person’s interest rate would now be 5.30%. Written on a mortgage, these interest rates would look like P-0.7. Variable interest rates are usually only available on 5-year terms with some lenders offering the possibility of taking a 3-year variable interest rate. When it comes to penalties, variable interest rates are almost always calculated using 3-months interest, NOT the IRD formula used to calculate the penalty on a fixed term mortgage. This ends up being significantly less expensive as breaking a 5-year term mortgage at a fixed rate of 3.49% with a balance of $500,000 will cost approximately $15,000. That is if you use the current progression of interest rates and broke it at the beginning of year 3. A variable interest rate of Prime Minus 0.5% with prime rate at 3.45% will only cost $3,800. That is a difference of $11,200. You can expect to pay this kind of amount for the safety of a fixed rate mortgage over 5-years if you break it early.
Which one is best?
It completely depends on the person. Your loan’s term (length of time before it either expires or is up for renewal) can be anywhere from a year to 5 years, or longer. A first-time home buyer typically has a mortgage term of 5 years. Within those 5 years, the prime rate could move up or down, but you won’t know by how much or when until it happens. Recently, variable rates have been lower than fixed rates, however, they run the risk of changing. With fixed interest rates, you know exactly what your payments will be and what it will cost you every month regardless of a lender’s prime rate changing. If you go to the site www.tradingeconomics.com/canada/bank-lending-rate you can see the 10-year history of lender’s prime lending rate. Because lenders usually change their prime lending rate together to match one another (except for TD), this graph is a good representation. As you can see, from 2008 to 2018, the interest rate has dropped from 5.75% to 2.25% all the way back up to 3.45%. Canada has had this prime lending rate since 1960, and in that time it has seen an all-time high of 22.75% (1981) and all-time low of 2.25% (2010). Whether you want the risk of variable or the stability of a fixed rate is up to you, but allow this information to be the basis of your decision based on your own personal needs.
If you have any questions, contact a Amy Wilson your Dominion Lending Centres mortgage professional.
Thanks to Ryan Oake for this article