Friday, July 22, 2011

Buy a house, keep a little money in your jeans

This week I am going to highlight a great product I can offer! One of the lenders I work very closely with offers a fantastic designer mortgage product which allows you to choose various cash back options on your mortgage. The promotion allows qualifying home buyers to purchase a home, choose their own interest rate (currently ranging between 4.19% and 3.74% on a five year closed term) and choose their cash back amount.

We all know that it costs money to move house, most people end up buying some new furniture or completing small renovations such as installing new lighting in their new home. For a lot of first time buyers, these extra purchases are made with a credit card, often with very high interest rates. The cash back program I am offering will give you a little cash to make these purchases and renovations without having to use additional credit sources. The slightly higher mortgage rate (up to 4.19%) is certainly better than the 18+% charged by your credit card companies!

Here’s an example of how this program works.

Mortgage information: $250,000 over 30 years

Choices: borrowers can pick an interest rate ranging between 4.19%* and 3.74%*

Interest Rate Cash Back amount Monthly mortgage payment

4.19%* $4,500 $1,215.82
3.99%* $2,500 $1,187.38
3.79%* $500 $1,159.27
3.74%* $0 $1,152.29

So, as you can see with the examples above, the difference between a mortgage at 4.19% and a mortgage at 3.74% is $63.53/month, when you calculate this over the five year term ($63.53 x 60) it works out to a difference of $3,811.90. You have received $4,500 in cash back and will pay a total of $3,811.90 back over their five year term. I’d call this a win-win solution!

This mortgage truly is a “designer” mortgage, allowing you clients to choose the right mortgage for your needs!

Please contact me for more information!

*Rates subject to change at any time. Calculations are based on a $250,000 mortgage, 30 year amortization and a five year closed interest rate. The cash back amount will increase/decrease depending on the total mortgage amount. Interest rates are subject to purchaser & property qualification and can change without notice. Borrowers may have to qualify and pay a higher rate. Subject to approved credit and income verification. O.A.C. The cash back may be reduced and the interest rate increased if the mortgage does not close within 30 days of submission to the lender.

Tuesday, July 19, 2011

Prime stays the same...

In an announcement earlier today, the Bank of Canada left their key interest rate unchanged. The central bank cited several reasons for its decision including a slowly-recovering export market due to weak U.S. economic growth and the high value of the Canadian dollar.
Despite the above factors, according to an article from CBC, many experts are still predicting an interest rate hike towards the end of 2011.
The next scheduled interest rate announcement is scheduled for September 7th 2011.

Wednesday, July 13, 2011

The good times are almost here

As I lay in bed this morning willing my eyes to open I was half listening to CBC radio’s morning show. They were interviewing a woman working in HR at Ledcor. They are on a hiring spree, trying to hire 9,000 new employees this year. My eyes opened wider...9,000 people? In one year? Folks, this is yet another sign that the good times are back in Alberta! The HR representative stated that Ledcor is aiming to hire employees from within Alberta but is also trying to recruit internationally. This latest news should bring great things for the housing industry in Edmonton; more people working, more people moving here from other places = housing demand.
If you are someone that is sitting on the fence wondering if now is a good time to buy I would say it may be time to hop off that fence, find yourself a good Realtor and start looking at houses. Interest rates are very low and there is a lot of inventory to choose from. This may not be the case for long.
If you would like a referral to a good Realtor, I know several that are trustworthy, kind and patient. Just drop me a line and I will put you in touch with someone.

Thursday, July 7, 2011

The Bestest of Edmonton

Moving to Edmonton and wondering what's great about this place? Maybe you've lived here for a long time but haven't discovered everything e-town has to offer...

Click here for Vue Magazine’s the Bestest of Edmonton! A solid list of great things about the river city.

Monday, July 4, 2011

Don't accept the first price upon renewal

Remember all the work and research that went into finding the best rate for your first mortgage? Whether you spent months making sure your credit was as good as can be, or spent hours on the Internet searching for the best rate, it seems silly to waste that effort by blindly renewing with your existing lender when your first term is up.

The truth is, the best lender is only as good as the term that you sign with them. When it comes time to renew, many offer their clients an inflated rate hoping that you'll be complacent enough to simply sign it back. Other clients particularly the new ones, or those that take the time to negotiate receive the lender preferred rate, which can sometimes be as much as half a percentage point lower.

While that may not seem like much now, it adds up over the life of the mortgage and almost certainly overrides any savings you experienced in that first term. For example, if you had a 25-year, $200,000 mortgage at the posted rate of 4.08% you would be paying approximately $1057 per month, compared to approximately $1,018 per month at the discounted rate of 3.72%. While this isn't a lot if you look at it from a monthly perspective, if you look at the long-term, you're paying $118,220 in interest on the higher rate mortgage, compared to $106,572 on the lower rate mortgage. That's a difference of $11,672.

Obviously you're likely not going to keep the entire rate for the life of a mortgage, but if the interest costs could be even greater if you merely renew at the going rate, term after term. That's why it's important to employ the services of a mortgage broker throughout your entire mortgage lifespan. Not only will this ensure you're getting the best possible rate available, but it will also give you the opportunity to see if there are other mortgage products in the market that are better suited to your changing needs.

-Axiom Mortgage Solutions