Wednesday, October 14, 2009

Safeguarding your home purchase

This is a really good article that I received from Axiom regarding the decision between renting vs. buying:

There's a lot of speculation out there as to whether the recession is entering "recovery mode", or if we could see another dip. The ambiguity in economist opinions can make it difficult to decide whether now is the right time to buy - especially if your market is seeing a lot of bidding wars.

Here are a few things to consider before taking the plunge (or not)...

1. Is now the right time for you?
Forget about market conditions, interest rates or the fear of "missing the boat" and think about your life situation. Are you at a point in your life where you're ready to grow roots - or do you still have the travel bug, or a potential job transfer, in your future? Do you still have a few more years of city life in you, but can only afford to buy in the suburbs? Would buying greatly strap you down financially? If so, maybe taking the time to save for a larger down payment is the best move for you.

2. The five-year rule.
While it may be hard to look five years down the road, buying a place that will suit you for the next five years is the best way to ride out temporary market fluctuations. What are your goals over the next five years? If you're planning to start a family, a one-bedroom condo might not make the most sense.

3. Location, location, location!
Most of the time, buying in a popular location or on a coveted street will insulate you from market fluctuations. Remember the old adage - purchasing the least expensive home on an expensive, high-demand street is always better than buying the most expensive home on an inexpensive street. If you're looking to buy a home that will get you the most bang for your buck upon resale, look at up-and-coming areas that show promise of development over the next five years - such as new transit lines or housing developments.

4.Do your research.
The market is hot right now - which means you have to go into every real estate purchase, or bidding war, with a level head. Know what your desired property is worth, and head into every transaction with that number in mind - and don't go over it. This is probably easier said than done, but the last thing you want to experience is buyer's remorse.

5. Weigh the pros and cons of renting vs buying
for your particular situation. Putting money towards a mortgage every month is better than paying rent in many cases, because even if housing prices don't increase, you're building equity in a home of your own, rather than someone else's. That being said, if you have a very small down payment, and you can't comfortably qualify on a 25-year amortization for the type of property that you want, maybe you need to save a bit more. Figure out what a monthly mortgage payment would be, and save the difference between that and your monthly rent cost.

Tuesday, October 13, 2009

Fixed rate increases are coming!

The word on the streets is that fixed rate mortgages are on the way up! The bond market jumped on Friday so we expect fixed mortgage rates to follow soon (fixed rate mortgages are based on the bond rate while variable rate mortgages follow the Bank of Canada's prime lending rate).
While the Bank of Canada has publicly stated that they will not increase the prime lending rate for a while, this is very separate from the world of fixed rate mortgages. I'll post tomorrow with the new rates as soon as my lending partners start their increases.
BTW, if you do not have a rate hold at your lending institution, GET ONE ASAP!

Thursday, October 8, 2009

Latest mortgage rates @ Mortgage Success

Rates are down again! Please note, I have added some rates regarding a few cash back options that are available. These are not the only cash back options available so please contact me if you require more information regarding a cash back mortgage. (Borrowers may receive extra cash back funds if the mortgage closes within 30 days of submission to the lending institution).

Prime 2.25 %
Open Variable Rate Mortgage 3.75 %
Home Equity Line of Credit 3.25 %
6 Month 4.60 %
1 Year 2.75 %
3 Year 3.39 %
4 Year 3.69 %
5 Year Variable Rate (Prime) 2.25 %
5 Year 3.94%
5 Year (must close in 30 days) 3.84 %
5 Year 1.4% cash back 4.29 %
5 Year 3.4% cash back 4.79 %
5 Year 4.4% cash back 5.04 %
7 Year 5.25 %
10 Year `5.35 %
* Note: Rates are subject to change without notice. Please contact us for more information. OAC. Certain conditions may apply. Rate subject to borrower and property qualification. Posted rate is the rate posted by the majority of Canadian financial institutions. Rates may vary provincially.

Monday, October 5, 2009

There are a lot of variables in a variable rate

I just came across this article on the Financial Post's website. It is a great article for anyone who is struggling between choosing a variable or a fixed rate mortgage. The article states that most borrowers who chose a variable rate mortgage did better 88% of the time. This sounds great right? The article also goes on to point out that the above statistic does not mean that a variable rate mortgage is always the best choice. In the last year I have seen variable rate mortgages swing between Prime -0.6% to Prime + 0.6%. That is a huge difference! The current variable rate mortgage is sitting at prime, no discount or premium. These wild swings make it hard to know if you are getting a good variable product since the discount or premium can change quickly in just a few months.
When choosing a variable rate mortgage it's really important to evaluate your level of risk tolerance before deciding if the product is right for you. I have had many customers who have chosen a higher, fixed rate mortgage instead of the lower rate variable mortgage because they would rather know what their payment will be for the next 5 years. Variable or fixed is a very personal choice, one that I can certainly help you with but ultimately the choice is yours!

Read the Financial Post article HERE!

Friday, October 2, 2009

Mortgage Success Rates

Here are the latest lending rates! Please note, I have added some rates regarding a few cash back options that are available. These are not the only cash back options available so please contact me if you require more information regarding a cash back mortgage. (Borrowers may receive extra cash back funds if the mortgage closes within 30 days of submission to the lending institution).

Prime 2.25 %
Open Variable Rate Mortgage 3.75 %
Home Equity Line of Credit 3.25 %
6 Month 4.60 %
1 Year 2.75 %
3 Year 3.39 %
4 Year 3.69 %
5 Year 3.99 %
5 Year Variable Rate 2.25 %
5 Year (must close in 30 days) 3.89 %
5 Year 1.4% cash back 4.39 %
5 Year 3.4% cash back 4.89 %
5 Year 4.4% cash back 5.14 %
7 Year 5.25 %
10 Year 5.35 %

* Note: Rates are subject to change without notice. Please contact us for more information. OAC. Certain conditions may apply. Rate subject to borrower and property qualification. Rates may vary provincially.