16 Oct

October Mortgage Update – Rates On The Rise Both Variable & Fixed

General

Posted by: Angela Calla

With the Bank of Canada holding rates steady this September, the same is not the case for the bond market, which impacts fixed rates. In every interest-rate market there are many factors leading to an increase and we are hoping to provide a little bit of clarity on what is happening and what it means to you and your loved ones. We tell you this in advance to be proactive to take care of you, as our mortgage family, so as you hear the news about the changes you have comfort we are here to lead with clarity.

At this time, we see fixed rates increasing as the bond market increases, and our economists anticipate an increase October 24th  2018 from Bank of Canada for variable rates as well. This is largely due to the trade deal now being completed and the LNG deal approved.

Why do we note this information and how does it relate to you?

If you are in a variable rate, you will want to: 

  1. Review your lock-in options by contacting us or your lender directly (every lender has different policies in allowing us to help or not). Knowing it’s unlikely the prime rate will reduce and fixed rates are on the rise, there could be a sweet spot to review your options now.
  2. If you decide not to lock in, it’s time to review your discount to see if a higher one can be obtained elsewhere.

Locking in won’t be for everyone, especially if you are making higher payments and your mortgage is below $300,000, which most people fit and will continue on that path. Also if your discount is above .6 below prime you may want to wait and watch the market. Locking in will be around 1% higher rate than you are likely presently paying.  If knowing you can likely lock in around 4% now is most attractive to you, this may be your time.

If you are in a fixed rate:

  1. If you obtained your mortgage in the last year, stay put.
  2. If you are looking to move up the property ladder or consolidate debt, get your application in to us ASAP so we can hold options for up to 120 days.
  3. If you are up for renewal this year or know someone who is, secure your options now with us to weight out the savings prior to renewal with us keeping a watchful eye on the market.

Keep in mind that if you or someone you care about has an average mortgage of $350k and got it a few years ago at 2.49% now a qualified applicant can expect about 3.89% which is a payment increase of $254 dollars a month, so increasing your payment now will protect your equity, and you from future payment shock.

Please reach out to us so we can help ensure you or a loved is on the right path in our ever changing market. 604-802-3983 or callateam@dominionlending.ca

Here to help, Angela Calla

Angela Calla leads The Angela Calla Mortgage Team with Dominion Lending Centres, and is an award winning #1 best seller of The Mortgage Code.

Buy it now!   The Mortgage Code

2 Oct

Does The Bank Have Your Back?

General

Posted by: Angela Calla

If your mortgage is coming up for renewal, you’re probably keeping a close eye on rates. But it can be a little bewildering to see the banks offering a bunch of different rates.

If you’re left wondering why, the short answer may be a little harsh. The banks offer different rates because they can, and consumers are brainwashed to believe the banks have their best interest.

So what can you do to get the best rate? To start, know that the bank does not have your best interest. Then, reach out to a mortgage broker for help.

A mortgage broker has no bias opinion on what lender they’re going to use. A reputable broker doesn’t care where they put the mortgage and has multiple lenders to choose from and compete for your business.

If you’re about to embark on the renewal process, you might want to try this approach. Tell your bank you’re working with a top mortgage broker and you intend to call them bank every day to get their best five-year fixed and variable rate.

If your mortgage broker can’t beat the rate, you’ll likely be advised to stay there. However, most of the time, your broker will be able to get you a better rate, just based on the number of different lenders in which they have access.

When you go back to your bank, and they decide to match the new lower rate, you have to ask yourself an important question: If they really valued your relationship, why didn’t they just offer you that rate in the first place?

With a bit of homework and proper broker, nine out of 10 times they can get you a better rate.

Lastly, you need to keep in mind a mortgage is more than just a rate. You need to consider the personality of your mortgage, and certain aspect like the penalties to break the mortgage and if it’s portable. These are things a mortgage broker can help you figure out.

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advice with choice. We are here to help you personally with your mortgage at 604-802-3983 or callateam@dominionlending.ca

 

2 Oct

The Art of Leveraging

General

Posted by: Angela Calla

For some people, just owning one property and having a single mortgage is enough to handle. But for others, homeownership can be a gateway to owning multiple investment properties. You might be thinking: there’s no way I can turn the value of my modest home into a real estate empire. Ok, maybe not an empire, but you can take the equity of your home and, with the right investment, get a return far greater than a stock portfolio.

Most people are trained to stay out of debt and don’t want to consider using the equity in their home to buy an investment property. But they haven’t realized the art of leveraging.

If you’re using equity from your primary residence to buy an investment property, keep in mind that the interest you’re using is tax deductible. Consider you’re also buying an appreciating asset, and if you put a real estate portfolio to a stock portfolio side-by-side, they don’t compare.

Who is a good candidate? You might be surprised to learn you don’t need to make six figures to get into the game.

Essentially, you just have to be someone who wants to be a little smarter with their down payment.

Before you go down that road, there are some quick things you need to know.

With investment properties, the minimum down payment will jump to 20 or 25 per cent from five percent. Rental income from the property can be used to debt service the mortgage application, while some lenders will have a minimum liquid net worth requirement outside of the property.

Most lenders also limit the number of mortgages in a portfolio. Usually, after five mortgages, you’ll be considered a commercial file. However, a mortgage broker can work with other lenders to increase the number of investment properties.

Typically, when you’re considering a mortgage, you’re looking at the rate. But the rate is less important compared to your cash flow and future equity position. If it all sounds like a bit much, consulting a mortgage professional with an understanding of investment financing is the best way to start.

Most people who get into investment real estate think they’ll only end up buying one property, but that’s not usually the case. A broker will prep you for a 10-year plan of purchasing property and position you accordingly. A broker will also have a good understanding of the alt-side of lending and how you can benefit from that type of financing.

A mortgage broker with the right experience and understanding of financing rental properties can be an invaluable resource.

The Angela Calla Mortgage Team will work with you personally to ensure you get the best mortgage options contact us directly at 604-802-3983 or callateam@dominionlending.ca it’s never too early or too late to start planning to position yourself best