Finance – Interest Rates

With a Recession coming and the crises in  the Stock/Credit markets, some buyer’s are finding out that the rates promised but not locked in have suddenly risen.

If this has happened to you you may wish to speak with the competition and see if there is a better rate to be had. It is not known to all but Banks / Finance companies actually compete for your business and offer varying rates as the lending criteria between these companies is of course different. 

You may indeed be able to find a better rate for yourself its a simple as entering basic info see the link below for Canadian and American mortage rate comparisons.

“For assistance with your realty needs Email me today Robert-Paterson@ColdwellBanker.ca“

Source….. Rob Paterson

Finance – What to do with the Condo…..

Recently Married what to do now? keep it or sell it?

My suggestion to you would be keep the condo especially if it is in a prime location e.g. downtown or on a subway line, close to all amenities.  If this describes your condo you should find a Realtor or a professional property manager who can handle all the management/rental duties for you. This will allow you to sit back collect a cheque and let the equity build on your investment.

If your condo pays for itself let someone else enjoy the property while it appreciates in value. Remember to stay informed of the local real estate market and keep informed on the status of your investment. Always keep up to date to ensure your condominium complex investment does not end up being a liability for you.

After 5 years if you have not been actively involved now is the time to involve yourself more and possibly make a decision looking forward to selling the investment based on your findings and future needs of the complex. 

 When looking for a property manager get a break-down on the services they will provide to you and for what charge as the services offered between managers could indeed vary.

Source…. Rob“torontorealty” Paterson  

Finance – Ten Reason’s to talk to a Mortgage Broker, #8, 9, 10 of 10

#8 One Credit Inquiry

Rate-shopping on your own can actually be hazardous to your credit. Every time a lender checks your credit, the credit bureaus take notice. Too many inquiries and your credit rating can weaken, possibly affecting the rate and terms of your mortgage. Your broker does one inquiry only, regardless how may lenders you’re looking at.

#9 No Cost To You (O.A.C)

As a rule, the winning lender pays compensation to your broker for the services and solution provided.

#10 Personal Attention

You need a mortgage plan that is custom fit for you, and a broker who keeps in touch with you during you mortgage years. Keep in mind that their business is built primarily through referrals from satisfied customers,  so your positive mortgage experiences is essential for their ongoing business growth.

Your mortgage is a big decision and a powerful financial tool. For your next mortgage, contact a mortgage broker who is trained and ready to help you achieve your financial and home-ownership goals.

When looking for a home do your homework don’t always settle for the 1st Mortgage available to you….

 for reasons 1-7 view blog under finance contact me today lets see what can be done…..

  Catherine Wong-Bourbeau PFP  

Source Mortgage Architects, Rob “torontorealty” Paterson  

 Looking to sell/relocate/invest email me today Robert-Paterson@ColdwellBanker.ca

 

Finance – Ten Reason’s to talk to a Mortgage Broker, #5, 6 of 10

#5 Expertise

An AMP-designated mortgage broker is a financial specialist. That’s the kind of expertise yo want to guide you through today’s plentiful mortgage market. With interest-only mortgages, 35- to 40-year amortization, 100% financing, no income documentation products for the self employed, credit repair and debt consolidation, today there are mortgages for almost any situation. And your independent mortgage broker knows them all. 

#6 A focused Specialist

A mortgage is a very significant financial event. Mortgage brokers are in only one business, and they do it exceedingly well.

Looking For a Mortgage Contact Catherine

For reason’s 1-4 visit blog look under finance category

Source….. Mortgage Architects, Rob “torontorealty” Paterson

 Looking to sell/relocate/invest email me today Robert-Paterson@ColdwellBanker.ca

 

 

 

Finance – Ten Reason’s to talk to a Mortgage Broker, #2,3,4 of 10

#2 INDEPENDENCE AND OBJECTIVITY

A mortgage broker actually works for you, not for any one lender. that kind of objectivity means that you – the client – are the focus. They fit the mortgage to the client, not the other way around.

#3 NEGOTIATING POWER

Mortgage brokers have negotiating power because the lenders compete for their business. You’ll get the best rate for your situation.

#4 ACCESS TO RATE PROMOTIONS

You may not realize it, but there are sales and promotions in the mortgage world, too. Lenders often offer special rate promotions, for example. Your broker will know about these special offers, and whether they might work in your situation.

Looking for a Mortgage Contact Catherine

Source….. Mortgage Architects, Rob  “torontorealty” Paterson

Looking to sell/relocate/invest email me Robert-Paterson@ColdwellBanker.ca

Finance – Ten Reason’s to talk to a Mortgage Broker, #1 of 10

A home is the biggest purchase most of us will ever make. And a mortgage can be a powerful financial tool. No suprise, then, that a growing number of Canadians have started to ask some smart questions about their mortgage. In fact, more than 30% of all Canadian mortgages are now arranged through mortgage brokers. Why? here is #1 of 10 great reasons:

Choice

A broker has access to mortgages from a huge range of lenders – so their clients have by far the best choice of rates and mortgage options. With partnerships in a vast network of over 50 lending institutions, including banks, credit unions, trusts, national and regional lenders, and non-traditional lenders, your broker can help design the perfect mortgage for you.

When looking for a home do your homework don’t always settle for the 1st Mortgage available to you….

 

 Catherine Wong-Bourbeau PFP  

 

Source… Mortgage Architects, Rob Paterson

Finance – Interest Rates

Interest Rates

The “Fed” has held back again, but how much longer can they postpone the inevitable? Rates must rise to quell inflation. Was the the lesson of the early 70’s not learned when inflation was rampant during the last oil crisis? Well, I remember the last real inflationary cycle, and interest rates rose to heights never seen before just imagine re-negotiating your mortgage for say 18 percent! Well this was not that long ago…

These are not the 70’s and this Oil shock has been compounded by the additional headache of the Sub Prime lending issue that is going to perpetuate throughout the economy for sometime to come. Regardless of what we are told, this cycle could last for 5 years like the term on a mortgage. It all depends on how long the financial companies were lending to not so “credit worthy” clients and then repackaging these same mortgages for sale on the stock market. When did this cycle stop?

Anyways, the real reason the fed did not increase rates is because they are hamstrung by the local economy. Wouldn’t they look great by raising rates and exposing more homeowners to the loss of thier homes.

One must wonder how are the foreign investors who are holding American bonds are feeling about the rate issue. Rates are going to rise as Inflation will have to be tamed. Investors holding these bonds will have to be satisfied or they will go elsewhere and attracting new investors will become increasingly difficult with lower rates.

The real crisis is coming when rates rise as there will be a huge impact and not just on homeowners. When rates rise, the financial companies who started this mess will feel the brunt with lower stock prices and larger write downs, all while holding a large real estate portfolio of properties that presently are not selling.

My personal opinion is: rates will rise, and this will impact the economy. The government will have to involve itself more to avoid a catastrophe as most of our society are now overextended, and the increase in rates will be felt by all. Our cycle or culture of spend has now just about come to an end, with the greying of the population savings is now more important.

A correction is needed just like the early 80’s after a steep rise in interest rates and a taming of inflation our society was positioned for an extended growth period. The growth period this time will be much less than before, as the generations after the baby boom have been smaller and therefore, will have less spending impact on the economy.

Source…….Rob Paterson

Finance – Interest Rates

The bank of Canada did what most analysts expected and that was hold the line on rate reductions. This could well be the end of low rates as we currently know them. The Central rates are certainly poised to rise as inflation is rearing its ugly head as seen in the prices of commodities.

The rate today currently stands at 3% . Will this move by the Bank of Canada be what the finanacial companies in Canada are looking for to raise the rates charged on loans to offset some of the losses due to the subprime fiasco south of the border? Lets hope not as our savings are slim and a slight increase could push those over leveraged into bankruptcy. 

Source…. Bank of Canada, Rob Paterson 

The 40 year mortgage

Mortgages a very boring subject but a necessary piece of business in real estate. The 40 year mortage is new on the scene becoming available in 2007. There is still alot of confusion regarding this loan. I will point out some issues. Are you looking for a  low monthly payment and have a small amount (no amount) to put down then this  may or may not be the way to go as the longer you stretch your mortgage the lower the payments will be.

There are huge drawbacks to this depending on your age as you maybe retired and still not own your home and of course the longer amortization (period) comes with larger interest payments to the bank meaning in the end you will be paying alot more for the right to own a home. The rate of principal (equity) growth increases at a slower pace see examples below.

    Home Price $400,000  Zero Down, 40yr Amortization,  5year term , Monthly payment $1663.27

    

Pmt

Date

Interest

Principal

Remaining Principal

1	6/18/2008	$1,322.36	$341.22	$399,658.78
2	7/18/2008	$1,321.23	$342.35	$399,316.43
3	8/18/2008	$1,320.10	$343.48	$398,972.95
4	9/18/2008	$1,318.96	$344.62	$398,628.33
5	10/18/2008	$1,317.82	$345.76	$398,282.57
6	11/18/2008	$1,316.68	$346.90	$397,935.67
7	12/18/2008	$1,315.53	$348.05	$397,587.62
8	1/18/2009	$1,314.38	$349.20	$397,238.42
9	2/18/2009	$1,313.23	$350.35	$396,888.07
10	3/18/2009	$1,312.07	$351.51	$396,536.56
11	4/18/2009	$1,310.91	$352.67	$396,183.89
12	5/18/2009	$1,309.74	$353.84	$395,830.05

 

Last payment on a 5yr term Amortized at 40yrs

60	5/18/2013	$1,249.00	$414.58	$377,396.09
	Total:	$77,210.89	$22,603.91

 

Last payment on a 5yr term Amortized at 25yrs

 Home Price $400,000  Zero Down, Monthly payment $2104.08

60	5/18/2013	$1,154.30	$949.79	$348,215.06
	Total:	$74,460.46	$51,784.94

Summary

• Equity (principal) growth after a 5yr term 40yr amort. is 22,603.91 
• Equity (principal) growth after a 5yr term 25yr amort. is 51784.94

The longer loan term has disadvantages: You pay more interest and equity growth is slower. Allways Seek a Mortgage professionals for advice and fully understand the terms.

If you have taken out such a mortgage please (post), tell us your Good/Bad experiences and what  should be avoided .

Source… Rob Paterson