23 Apr

Lenders with posted rates make penalties higher

General

Posted by: Angela Calla

 So back to that penalty issue… have you wondered how some lenders charge such a high penalty when the mortgage term is almost over? This is an obvious retention tool the banks leverage to keep you on their books!

 One of the many considerations we have when finding you the best mortgage is how they calculate penalties, as the market and your needs can easily shift throughout the term of your mortgage.

 Do they charge a reinvestment fee as well? Do they have hidden clauses about firm sales? Do they charge a premium on top of the interest rate differential (IRD)?  

 Below are two examples of how lenders are calculating penalties. Which one would save you the most amount of money not only when you first get a mortgage, but also if you need to make a change? This is one of the many advantages of having our team help you without bias to understand the different available options and the terms lenders use to make more money from borrowers. We help you keep your hard-earned money in your pocket.

 At the Angela Calla Mortgage Team, we first look to place your mortgage with a lender that does not use posted rates!

 

QUICK PENALTY CALCULATOR LENDER Broker Lender arranged by Angela Calla Mortgage Team

 

APPLICABLE IF CLIENT NOT TAKING A REPLACEMENT MORTGAGE

Client Current Rate

4.19%

Posted Rate Nearest to Months Remaining (eg. 16 months = 1 yr term)

3.09%

Initial Discount Granted Off Posted

0.00%

Differential

1.10%

 

 

Remaining Balance

$229,000

Remaining Months

16

 

 

Penalty Amount Calculation Steps

 

Remaining Balance x Differential

$2,519.00

Remaining Balance x Differential / 12

$209.92

 

 

Remaining Balance x Differential /12 x Remaining Months

$3,358.67

Reinvestment Fee of $300 (not applicable with Dominion Mortgage)

$0.00

TOTAL APPROXIMATE PENALTY

$3,358.67

 

 

 

 

QUICK PENALTY CALCULATOR LENDER Bank Mortgage obtained directly from borrower

 

APPLICABLE IF CLIENT NOT TAKING A REPLACEMENT MORTGAGE

Client Current Rate

4.19%

Posted Rate Nearest to Months Remaining (eg. 16 months = 1 yr term)

3.09%

Initial Discount Granted Off Posted

1.50%

Differential

2.60%

 

 

Remaining Balance

$229,000

Remaining Months

16

 

 

Penalty Amount Calculation Steps

 

Remaining Balance x Differential

$5,954.00

Remaining Balance x Differential / 12

$496.17

 

 

Remaining Balance x Differential /12 x Remaining Months

$7,938.67

Reinvestment Fee of $300 (not applicable with Dominion Mortgage)

$300.00

TOTAL APPROXIMATE PENALTY

$8,238.67

 Angela Calla, AMP

Dominion Lending Centres-Angela Calla Mortgage Team

Host of The Mortgage Show Saturdays at 7pm on CKNW AM980

Phone: 604-802-3983 Fax: 604-939-8795

“An introduction to someone you care about is a big responsibility…it’s also the biggest compliment a client can give us & it’s not taken lightly. We pledge to treat everyone that is referred to us with the utmost respect & professionalism”.

www.angelacalla.ca

Reach my Team Chris Adkins & Denzil Anderson at 604-939-8777 & callateam2@dominionlending.ca

23 Apr

What does it take to own an average home in 2013

General

Posted by: Angela Calla

In a recent Bank of Montreal survey, a First-Time Homebuyer is 29 years old and has saved a $48,000 down payment for a $300,000 home purchase.

Who fits this profile?

If you fit this average, it will take an annual household income grossing $40,000 per year (earning approximately $20 dollars full time and past your probationary period). If you are self-employed, this $40,000 income would have to be your net income based on at least two years of tax returns.

What if you don’t fit the average?

Lots of young Canadians find it next to impossible to save $48,000 for a down payment. Instead, they may be able to scrape together a 5% down payment ($15,000 using the $300,000 purchase price example) with a combination of savings, RRSPs and a gift.

You still have options – Your gross annual income needs to be: $50,000 – Your monthly mortgage payment with today’s average rates will work out to: $1,370

What can you buy?

Here are examples of over 800 homes within 45 minutes of Vancouver that are all 2 bedroom, 2 bathrooms with insuite laundry: http://rboies.mlslink.mlxchange.com/?r=903314772&id=363434333136.312

Home ownership comes with other expenses as well, including maintenance fees (condos/townhomes) and taxes which range from property to property. When you look at the fundamentals apparent in your personal scenario, home ownership may be easier than you think!

Angela Calla, AMP Dominion Lending Centres-Angela Calla Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980 Phone : 604-802-3983 Fax: 604-939-8795 Email: acalla@dominionlending.ca www.angelacalla.ca

12 Apr

Mortgage Freedom depends on the right plan

General

Posted by: Angela Calla

The average Canadian homeowner doesn’t think they’ll be mortgage-free until they’re 57 – two years longer than what they expected last year, a survey by CIBC suggests.

 The survey also found that half of those surveyed said other debt, from credit cards to lines of credit, have increased and impeded their ability to pay off their mortgage more quickly.

 

“Our view would be that Canadians are taking a look at their broader finances and are working to pay down other debts first to reduce their interest costs,” said Colette Delaney, EVP of mortgage, lending, insurance and deposit products at CIBC.

 

“Those with a growing amount of non-mortgage debt are less likely to be taking extra steps to pay down their mortgage, and this can lead to a longer payback period.”

 

Click here for the full Global News article.

 

Click here to read the CIBC press release.

 

To make sure you can be Mortgage Free as soon as possible contact The Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca  we can restructure your mortgage to include the outside debts to improve your cashflow and reduce your interest costs.

12 Apr

Divorcing & want to keep your home?

General

Posted by: Angela Calla

We are happy to inform you there is a mortgage product avaliable to help you

There is an option where you can now qualify to take their ex-spouse off the title/mortgage of the house and re mortgage up to 95% value of the home instead of 80%. 

It’s always unfortunate when things don’t work out the way you want them too but at least this may help some people keep their homes. 

During the separation of assets, it can be unfamiliar territory where you can lose a lot of money.  It is good to know someone that can help look at ways to save you as much money as possible.

Contact us for handling these private and delicate family matters.

Angela Calla Mortgage Team

604-802-3983 callateam@dominionlending.ca

Host of The Mortgage Show Saturdays @ 7pm on CKNW

 

10 Apr

Banks telling finance minister to stop messing with pricing as they raise rates

General

Posted by: Angela Calla

Finance Minister Jim Flaherty shouldn’t interfere with mortgage pricing set by the country’s lenders, Bank of Nova Scotia Chief Executive Officer Richard Waugh said

Flaherty, who has taken steps to cool the housing market in a bid to avert a crash, raised concerns last month over reduced five-year mortgage rates offered by Bank of Montreal and Manulife Financial Corp. amid record levels of household debt in Canada. Both lenders have since increased rates.

“I understand why the finance minister is concerned about the Canadian economy, but I just philosophically don’t think” government should be setting product pricing, Waugh said yesterday in an interview in Halifax, Nova Scotia, where the bank held its annual shareholders meeting. “Despite the difficulties of central banks to use interest rates, the alternative of trying to manage specific products or prices, to me, is fraught with difficulty.”

Scotiabank hasn’t been approached “that I’m aware of,” by Flaherty over the Toronto-based bank’s mortgage rates, said Waugh, 65. He said Canada will have a “soft landing” in the housing market instead of a full-scale crash.

“Volumes for mortgage brokers and banks will be affected, but I don’t see it as a credit event of any significance,” said Waugh. Kathleen Perchaluk, a spokeswoman for Flaherty, didn’t return e-mails seeking comment.

Canada’s third-largest bank may expand in unsecured lending, such as credit cards, Waugh said. The bank had avoided expansion in that area in the aftermath of the financial crisis, he said.

Unsecured Lending

“The unsecured credit card and personal loan portfolio has behaved better than we thought,” said Waugh, who is also a vice chairman of the Institute of International Finance. “As the world is healing, I think that gives us an opportunity to expand what we call our risk appetite and take more of a prudent risk on our unsecured credit.”

In October, Waugh relinquished his role as president and was succeeded by Brian Porter, paving the way for an eventual transition to the top job. Waugh declined to say when he will retire and wouldn’t say whether he will still be CEO at the bank’s next annual meeting in Kelowna, British Columbia.

Related

“It’s not imminent, but it will happen in a timely manner,” Waugh said. “There’s lots of things I’m planning to do and healthy to do. There will be a time, but I’m not going to disclose that right now.”

Foreign Trade

One of the issues Waugh plans to pursue as CEO and into his retirement is urging Canadian companies to boost trade with emerging-markets countries, the subject of his speech at yesterday’s shareholder meeting. In addition to his own bank, Waugh cited Linamar Corp. and Magna International Inc. as firms that have seized the opportunity.

“There is this sense of, perhaps, growing protectionism,” in countries such as the U.S., Waugh said. “It has to be done right now, because it’s not going to get better. The European and American companies are going to get stronger and boy, when that comes, competition’s really going to be keen.

Bloomberg.com

To review your borrowing options contact The Angela Calla Mortgage Team 604-802-3983 or callateam@dominionlending.ca

4 Apr

Using RRSP’s for your downpayment, what you need to know

General

Posted by: Angela Calla

DID YOU KNOW…

The Home Buyers’ Plan (HBP) is a program for first-time homebuyers that allows you to withdraw funds from your RRSPs to buy or build a home. You can withdraw up to $25,000 tax-free ($50,000 for a couple). Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You’ll have to repay an amount to your RRSPs each year until your HBP balance is zero. If you don’t repay the amount due for a year, it will have to be included in your income for that year. Click here for more information from Canada Revenue Agency.

Questions for your first home purchase? Contact us today

Angela Calla Mortgage Team

callateam@dominionlending.ca

604-802-3983

4 Apr

When is it time for a mortgage review

General

Posted by: Angela Calla

 
You may have heard about already low interest rates getting even lower and wonder what to do with this information!

When there is a change in rates of 0.5- 0.8 of a percent it’s worth it for us to work the numbers to see if there is any additonal savings by taking advantage of todays lower fixed rates, and securing that for you for a longer period of time, so if you have an interest rate of 3.5% or higher it justifies a review.

A mortgage should be reviewed quickly each year; we find it easy to remember to review your mortgage when you get your taxes done as you will have your documents handy. This way you ensure even if you did your mortgage only a year ago you can ensure you are always saving the most amount of money and optimizing the current mortgage market.
 

Thanks and have a great day,
Angela Calla, AMP
Dominion Lending Centres-Angela Calla Mortgage Team
Host of The Mortgage Show Saturdays at 7pm on CKNW AM980
Phone: 604-802-3983 Fax: 604-939-8795
“An introduction to someone you care about is a big responsibility.it’s also the biggest compliment a client can give us & it’s not taken lightly. We pledge to treat everyone that is referred to us with the utmost respect & professionalism”.
www.angelacalla.ca <http://www.angelacalla.ca/
Reach my Team Chris Adkins & Denzil Anderson at 604-939-8777 & callateam2@dominionlending.ca

4 Apr

Top 5 Mortgage Mistakes

General

Posted by: Angela Calla

Obtaining financing on a new or existing home can be a stress-free, straight-forward process if you’re prepared. But if you’re not prepared, there are many common mistakes you can make. Most of these mistakes are easily avoidable with some preparation and informed advice – feel free to call or email with any questions/concerns!

Below are the Top 5 Mortgage Mistakes people make when trying to secure financing for their home:

  1. Failing to choose the best product for their situation
  2. Automatically renewing their current mortgage with their existing lender
  3. Signing documents without reading them
  4. Taking it to the limit – running up credit
  5. Not planning for your mortgage application

1. Failing to choose the best product for your situation There are many different types of loans out there. There are fixed- and variable-rate products, hybrid and no-frills mortgages, lines of credit, term options, amortization choices, and more.

And although choice is great, it can be quite overwhelming without expert advice. While one person would benefit from a variable-rate product, their neighbour may be better suited to a fixed-rate product. The key is to always explain your current situation and future goals in detail so we can select a product that best meets those needs.

2. Automatically renewing with your existing lender Although you may feel an allegiance with the current financial institution that holds your loan, they may not be able to offer you the best products. When refinancing or renewing, it’s

 

important to always shop the market for your best available option, much like you did when securing your first mortgage. This ensures you end up with the best mortgage rate and terms customized to your unique situation. In many cases your bank will offer you the posted rate in hopes that you’ll simply sign and return the commitment without shopping around. Make sure you do your due diligence when refinancing and renewing. After all, this is your home, your mortgage and your money!

3. Signing documents without reading them Never sign documents without reading them. If you’re unsure about something, always ask for clarification. Remember that you’re the one entering into the agreement, so you need to understand and agree with that commitment.

4. Taking your credit to the limit Make sure that your credit balances are in your favour when it comes to your mortgage application. Lenders are looking for an appropriate debt-to-income ratio. In other words, you need to have more income than you have debt. Avoid running up a balance on your credit cards and pay down existing debts as much as possible.

5. Failing to plan ahead If you know that you’ll need to obtain, renew or refinance a mortgage, it’s essential to plan for it by ensuring your credit is in order. If it’s not, start preparing. Don’t make any purchases on your credit cards that you can’t pay off and if you carry a balance on your credit cards, start paying them down. Refrain from making any large purchases before securing your mortgage. If you’re planning to buy a car, wait until after you have secured financing, as your debt-to-income ratio will rise and you don’t want this while trying to secure a mortgage.

Understanding how the mortgage process works and how lenders qualify your loan will help you avoid the above mistakes. As always, if you have any questions or concerns, clarification is just a phone call or email away!

Angela Calla Mortgage Team

callateam@dominionlending.ca 604-802-3983