21 Jun

3 reasons to protect yourself with a 10 year fixed term

General

Posted by: Angela Calla

5 year fixed interest rates have bumped up over 70 basis points in just  2 weeks, making the 10 year the best opportunity for borrowers to protect themselves.

With mortgage rates at all-time lows, it seems longer terms are making a comeback. It turns out that fashion isn’t the only thing that comes back into style!

In fact, 10-year fixed mortgage rates have never looked so sexy. If you owned a home in the 80s or 90s, you may notice the 10-year term comeback!

 Following are three reasons to consider a 10-year mortgage term:

 1. After 5 years, you only have to pay three months’ interest to get out of the mortgage. This is currently the lowest penalty available to for a fixed rate – much more attractive than facing a much higher interest rate differential (IRD) penalty!

 2. You don’t need the equity out of your home for your next purchase as you can buy again with a 5% down payment. For instance, if you purchase with 5% down, your property would have to go up over 25% for you to get equity to use as a down payment for a second home, which is not likely in five years.

But, you can turn your current condo into a rental and buy your next home with 5% down (with a combination of savings or a gift). Rental mortgages usually require a 20% down payment, whereas primary residences typically require just 5% down. Purchasing a condo to live in until you’re ready to buy another home, and then renting out the condo, is a great way to become a real estate investor without having to come up with a 20% down payment.

 3. If you’re on a fixed income, taking advantage of a longer term fixed-rate mortgage can definitely be beneficial. Currently, with our historically low interest rates, a five-year fixed rate is around 3.19% and 10-year is around 3.99%. So, if after 5 years rates have risen to 3.8% or higher (which is very likely), you would have been ahead taking the current 10-year.

Instead of guessing how much longer rates will remain at historic lows, if you’re on a fixed income, you know you’ll be paying the same rate for 10 years. And, chances are, after 10 years are up, you will be in better shape financially and have more equity in your home.

The return of the solid 10-year means you have options. It may not be the best option for everyone and the market may change in a few weeks to make it less attractive. I will show you how all the products apply to you to ensure you receive the best product for your goals!

Thanks for visiting

Angela Calla, AMP

Dominion Lending Centres-Angela Calla

Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980

Phone: 604-802-3983 Email: callateam@dominionlending.ca

* rates are subject to change and final approval

21 Jun

Top 4 mistakes newlyweds make when getting a mortgage

General

Posted by: Angela Calla

Marriage is such an exciting milestone that offers so much hope for the future by uniting two partners to establish roots together. I have found that it’s important to consider the following when setting out on the marriage journey to ensure your financial house remains in order, since financial strain can put a lot of pressure on relationships:

 1. Your partner’s credit history/spending style. When you’re considering buying a home together, it’s important to know what you’ll be dealing with even before you decide to get preapproved for a mortgage. If you need to fix up your credit, for instance, knowing ahead of time can save lots of hassles down the road.

2. Setting up title. This may depend on your credit score as well, and also spark the conversation of your comfort level of equally being on title (meaning both borrowers will be using our first-time homebuyer’s status, provided you qualify). Another option is for one borrower to appear as a guarantor on the title (meaning the other spouse can use the first-time homebuyer status next time and have a potential future savings of $6,500). 

3. Down payment. If part of your down payment is a gift, some family members don’t want to give it unconditionally. They often want something in writing to ensure their family member gets back the gifted amount if you don’t happen to live happily ever after. If this is the case, you want to discuss this in advance so it’s one less discussion to have when purchasing a home together.

4. Focusing on rates. Regardless of your marital status, rate fixation is a trap many Canadians fall into. The right mortgage terms play the biggest role in becoming mortgage-free faster. Borrowers don’t want the lowest rate but, rather, the lowest cost of borrowing and transparency. We even help you with future insurance portability (mortgage and life). Failing to discuss your options with an independent mortgage broker and looking at more than just rate can easily mean you will owe more at the end of your mortgage term.

When you work with an unbiased mortgage professional our service is free and we are here to help you throughout the ever-changing market and your lifecycles to ensure you are presented with the best possible mortgage options. Building the best foundation by thinking ahead will help you stay ahead financially and minimize financial stress on your relationship.

Do you know someone who should have a discussion with our team about purchasing a home? Please forward this along to them and introduce us in an email, so we can help them build a plan!

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