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Dear ,
What a crazy month of June it has been for Justin and me!
Looks
like the "Refinancing in the Perfect Storm" email we sent out last
month really motivated our clients and their friends to call us to rate-hold
sub 4% 5 year fixed rates for them.
Prior to the close of business day on June
2nd, we submitted 34 new applications to refinance by the end of
August and September. Needless to say we were very busy and still are now that
fixed rates for 4 and 5 year terms have all increased by 3 to 4/10ths
of a percent (30 to 40 basis points).
This is good news for those that
got their applications in on time as now those clients are receiving a reduced
penalty but still getting a 3.99% or less (currently unavailable) fixed rate
for the next 5 years, putting even more savings back in their pockets.
Those
that got their mortgage more than 1 year ago may still need to wait it out a
little longer before refinancing as the 2 and 3 year fixed rates have not gone up
nearly as much if at all so penalties to break those terms are still quite
high.
We are crossing our fingers that those rates increase by the end of
summer before the rate-hold's expire!
If you missed last month's
wave, rates are still as low as they have been in the last 5 years, hovering at
about 4.24% so it still makes sense for you to examine your options and to see
if the savings are substantial enough to make the effort of refinancing worthwhile.
Give us a call and we can help.
Sincerely,
Mike Averbach and Justin Blacklock
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What IS the Perfect Storm?
A Refinancing Strategy for today's volatile market
 Last month I wrote an article outlining a re-mortgaging strategy that is tailor made for today's mortgage market.
The strategy "assumes" that interest rates are as low as they will ever get in this decade ... and that rates will soon be increasing steadily.
I was right ... rates have already started to increase, and IF you act fast, you can still take advantage of "The Perfect Storm."
Here is a RECAP of last month's article:
In order for refinancing to make sense, you should end up
with money in your pocket. The overall
savings generated by a lower cost mortgage should be more than the refinancing
penalties incurred.
As long as mortgage rates stay the same or get lower, it is highly unlikely that you will see any
benefit to refinancing because of the high penalties.
As mortgage rates go UP, the refinancing penalties go down.
IF you take action now you could benefit greatly as mortgage rates continue to rise.
What we do is get you the BEST rate we can and lock in the
offer. Depending on the mortgage company we can lock in for 3 to 4 months and can often renew for another 3 to 4 months at a time. Then we
wait.
At the point where you are actually saving enough money to
make the transaction worthwhile, we finalize
your refinanced mortgage.
IN A NUTSHELL:
1. You lock in a rate-hold today via a pre-approval application while the interest is low.
2. You wait till the mortgage rates start to increase.
3. When the mortgage rates go UP, your penalty for
refinancing goes DOWN.
4. When the transaction generates a positive cash savings
for you ... we refinance at the lower rate, with the lower penalty.
What do you need to do? Call us. We'll let you know if this strategy makes sense for YOU!
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July Market Update
Here's a market update from
our friends at Macdonald Realty; Simon Clayton, Kristie Marsden, Jason
Low, Sandra Ens, Jason Feinstadt and Jenny Stephanson.
Welcome to the Macdonald Realty Market Update
Last month we focused on Sellers and how to price homes for sale.
This month, we'll be turning our attention to Buyers and offer certain
strategies for how you should approach the negotiation process.
Remember, these are just general guidelines. Every situation is unique
and you should consult your Realtor about your specific circumstances.
1) Make Offers on Reasonably Priced Properties
Pricing is an art that some Realtors understand better than others.
A reasonably-priced property will maximize your chance of success of
buying at a fair price.
Properties that are priced too high likely have unreasonable and/or
unmotivated sellers. These properties will likely sit on the market for
a good period of time before the seller's expectations lower or their
motivations increase. In the interim, it is unlikely that you will
convince the seller to accept a market-priced offer.
Properties that are priced too low will likely solicit multiple
offers: an unpleasant situation for most buyers. A general
rule-of-thumb is that 2 offers will solicit full price, 3 offers will
achieve a 5% premium, while 4 or more will see 10%+.
2) Don't Low-Ball
As a Buyer, your realistic goal should be to get the property you
want at market price. Unless you are fortunate enough to encounter
exceptional circumstances, low-balling decreases your chances of
achieving this goal.
You will routinely see Sellers being 'insulted' with a low offer
and simply not provide a counter, either out of spite or out of a
belief that a deal is unreachable. In this scenario, if you really like
the property, your only response would be to tender a completely new
offer. In this case, you've tipped your hand that you really like the
property, and your negotiating position has been compromised.
Conversely, very low offers are often countered with very little
movement on the Seller's side. Like in the first case, your only move
at that point is to move even further on your next counter. Once again,
you've compromised your negotiating position while also making the
Seller an adversary rather than a partner.
3) Pay to the Point of Indifference
If you do happen to get into a multiple offer situation, your
bargaining position is limited to your best offer. In this case, your
Realtor should provide a basic CMA for you to make an informed decision
and you should come in with your best offer.
Your offer should be at
the point of indifference, which means that if the final purchase price
is $100 higher than your offer you will not feel discouraged.
Average Home Prices:See the Average House Price comparison chart for Greater Vancouver, Victoria, Kelowna and Edmonton. Visit our BLOG for more information and advice on dealing with Vancouver's current housing marketplace. And for links to our friends at MacDonald Realty.
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Averbach Mortgages
604-710-2550
We save you time. We save you money. We get you the you the best mortgage terms at the best interest rates possible.
If you are:
- purchasing your first home
- refinancing
- renewing an existing mortgage
- investing in real estate
- consolidating your debts
- experiencing current or past credit issues
We have the solutions that work for you.
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Mike Averbach
Averbach Mortgages |
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