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Welcome to My Mortgage Broker
Greetings!
As we move into the fall season some people may be looking at doing a bit of a financial review. In this issue I will touch on some helpful information for those up for renewal on their mortgage and share some interesting tips on one of our favorite topics - insurance!
Please feel free email or call me with any questions and PLEASE PASS ON THIS INFORMATION to anyone you know that could benefit - sharing is a good thing.
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Renewing your mortgage
Don't sign till you've
done your homework
Over
74% of Canadian homeowners remain with the same lender when renewing their
mortgage. The renewal notice comes in
the mail, they sign on the dotted line and move on without checking the current
interest rates or their existing mortgage terms.
Things
can change between the time of the original purchase and the first renewal. Beyond changes in interest rates there are
other factors to consider - new job, marriage, children, to name a few.
Therefore, it is good advice to re-evaluate your needs and give some thought to
your current and future needs before signing the renewal.
When
your notice arrives in the mail, it will include the most current posted rate
or a discounted rate; but, not necessarily the best rate available in the
marketplace. Don't be intimidated to
negotiate with your lender for a better rate - or if the terms aren't suitable -
change lenders.
Let an independent mortgage broker do the work - at no
cost to you.
If
you are not comfortable negotiating with your bank, get in touch with an
independent mortgage broker to discuss the options available to you. A broker
has access to many lenders and is motivated to keep your business by getting
you the best mortgage for your individual lifestyle situation. The interest rate is only one aspect of the
mortgage. You may find that different
terms or changing lenders not only saves you money but could shorten the life
of your mortgage. In most cases the lender pays the broker a fee to bring your
mortgage business to them.
Many
lending institutions don't post their lowest rates. Mortgage brokers buy wholesale from the
lenders and can offer, in many cases, a better rate. They also deal directly with the mortgage
lender underwriting department to ensure the mortgage terms are the best suited
to your needs.
Don't get locked in before you are ready
If
you haven't decided on your mortgage renewal and time is running out - contact
your bank and let them know you want to put your mortgage into an "open" term
until you are ready to make a final decision. In some cases, if the lender
doesn't hear from you, they will lock in the mortgage with the offered rate
until the next renewal period. At that
point you have no power to negotiate and may have lost the opportunity for a
better mortgage solution.
Some
lenders will hold an interest rate as long as 120 days prior to the actual
renewal date, so don't wait to start looking at other lenders. If you find a mortgage with good terms and a better
rate the new lender may hold that rate until your mortgage renewal date and
then make the switch.
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Something I didn't know about life insurance.
According to one of my very knowledgeable colleauges, Margaret Reynolds of Lynn Zlotnik Wealth Management, there are so many options for life insurance that I thought it was important to share some good information with you - when I hear of some. Insurance is one of those things we put off, may not understand and hate to talk about. But, it is necessary and here is one great idea I didn't know of.
Margaret says that one great way to meet current and future needs is by using a concept
offered by one of the insurance companies to layer term policies. The
best way to explain this is to show you an example.
Dave is a 45 year old male with a wife and two kids ages 12 and 14. He works with his insurance advisor and sorts out that to meet Dave's
need to plan for his children to grow up and get through school,
provide replacement income for his wife and to pay off his mortgage his
current needs are around $1.1 million.
They work out that in 10 years his children will be out of school and
the amount needs for the mortgage and income replacement will have
reduced and his need then will be $750,000.
Then in 20 years the mortgage will be paid off and the amount needed for income replacement will be reduced to $250,000.
By layering a 10 year, 20 year and 30 year term policies they can meet
Dave's changing needs and even have his premiums reduce every 10 years. To see a graphic example of this option and to review other great tips - visit http://mreynoldsrap.wordpress.com/
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Best Rates
RESIDENTIAL MORTGAGE RATES
As of Wednesday Sept 16,2009
TERM
INTEREST RATE
1 year 2.55%
2 year 2.85%
3 year 3.34%
4 year 3.54%
5 year 3.79%
(Quick close)
7 year 5.10%
10 year 5.20%
Open Variable rate 3.05%
Closed Variable rate 2.35%
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Pauline's Pick - www.encorp.ca
This local company has many locations for recycling - including bottles, paint - and even electronics. Check it out and GO GREEN!
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Mortgage Tip
Rate holds - they are free and good for up to 120 days. Yet many people don't take advantage of this. Whether you are looking to purchase a home OR renew or refinance your mortgage, talk to your broker well in advance to secure a rate hold. You've got nothing to lose - in fact it could save you thousands!
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