It never seems to amaze me these days about the rates and just how low they are. We havent seen rates this low in years. Variable used to be the flavor of the month, and in some cases it still is, but with rates at 3.99 for a 5 year fixed, maybe a fixed rate mortgage isnt so bad…..or is it..?
Mcap Mortgage Corporation is offering the 3.99% fixed rate with some conditions;
- Not available on purchases of a rental property
- No Stated income allowable (for Business for Self income earnings that cant be proven income in the traditional way)
- No Second homes (vacation home or buying a property for your son or daughter)
- No Transfer or Switching your mortgage from another financial institution with no fees (some fees may apply dependant on if your at renewal or midterm in your current mortgage)
- The mortgage broker must request this product at the time of application
Another important point is that early this year MCAP announced that all fixed rates and some variable rate mortgages are closed to full re-payment for the first three years, except in the event of a bona fide sale of the subject property to an arm’s length purchaser. Full pre-payments are subject to standard pre-payment penalties.
These changes were introduced in order to reduce full re-payments of MCAP mortgages where there are no sales transactions associated with the re-payments. There are significant costs associated with accepting early re-payments in full and these costs were having a negative impact on the overall performance of their mortgage portfolios.
In situations where the borrowers needs have changed but no property sale is planned or required, there are usually alternatives to full re-payment of existing mortgages. MCAP offers several refinance options, including rate blends, term extensions, porting and assumptions. One of these options will accommodate most client situations and MCAP refinances are done within their standard competitive pricing model.
You may hear something in the market called a “no frills” or “barebones” mortgage., this is not the case with this product, you still have your full prepayment options available with 20% monthly and 20% annually to pay down your mortgage if need be.
Concerned? If we look back, history has it that most people making any kind of changes to their mortgage, whether it be a sale or refinance, will do so at about the 3.7 year mark.
So to wrap up in most situation the 3.99% rate and product is a good one, and especially nice for a first time homebuyer to get in at such a great low rate and have the comfort of it being secured for 5 years.
Its for your purchases or refinances that can close within 30 days, what if you cant close your deal within 30 days you ask?….then the next best offer is 4.05%….still a fantastic rate available in the market place today!