Posted in Applying for a mortgage - Lisa Alentejano services the interior, Bank VS Broker, BC Mortgages, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Credit Scores, First Time Home Buyer Steps, fixed or variable rate or both, Fixed rates, Hombuyers Downpayment, Home Buyer Closing Costs, Home Loans, Interior home mortgage, Interior Mortgage Expert - Lisa Alentejano, Interior Mortgages, kelowna mortgage, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Low Interest Rates, Mortgage Affordability, Mortgage by Lisa Alentejano, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgage Rates, Protecting your biggest investment your mortgage, rate fixed mortgage, Save your money, Why use a mortgage broker

BANK VS BROKER

Buying your first home and getting your first mortgage can be an overwhelming experience.

If this is your first home buying experiencing, applying for a mortgage can be the most intimidating part of the process , so where do you start?

In the past, the home buyer turned to their banks for their mortgage needs, but now you have more options at your disposal with over 40% of consumers turning to mortgage brokers for their mortgages needs instead of the banks.

Mortgage brokers are provincially licensed and regulated by CMBA .   They can help you with all aspects of a mortgage, from figuring out how much you can truly afford, to determining the best mortgage product for you, to finding ways to save you money and pay off your mortgage faster.

Many lenders’ rates and mortgages can only be accessed through a mortgage broker. Not having the selection of lenders, and simply choosing to get a mortgage with a bank, can mean choosing harsher prepayment penalties for breaking your mortgage in the future, as well as a higher interest rate; which can cost buyers thousands upon thousands of dollars over the life of their mortgage.

A mortgage broker is also able to better tailor a mortgage product to your specific needs, whether that be working with a lender who is more flexible when it comes to self-employed income; one who has more flexible prepayment terms; or one that has more options for consumers that possibly have suffered some credit challenges in the past.  Because mortgage brokers have access to more lenders, they’re better able to find a lender and a mortgage based on your specific needs and financial situation to get you the lowest mortgage rates today.

Mortgage brokers offer convenience, which lets you meet around your schedule, not the banks hours.

Mortgage brokers also operate on commission and are paid by the lenders who ultimately grant you your mortgage, so there is no cost to the consumer.   Referrals are the life blood of our business so it is in our best interest to serve you as best we can.

Bottom line,  using a mortgage broker gives you the freedom of CHOICE and comparables to consider, using a bank gives you no other choice but ONE, theirs.

Feel free to contact me with any questions you may have at 1-888-819-6536 or lisa@mortgageplayground.com

 

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Posted in advice on locking in your mortgage, Bank of Canada, Bank of canada rates, BC Mortgages, Benchmark interest rate, Canadian Mortgage News, fixed or variable rate or both, Fixed rates, fixed term mortgages, Home Loans, Interest \rate Increases, Interior Mortgage Expert - Lisa Alentejano, kelowna mortgage, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Mortgage Rates, Pre Approval Mortgage, rate fixed mortgage

FIXED VS VARIABLE MORTGAGES

THINGS TO CONSIDER

Fixed and Variable rate mortgages both have their advantages and disadvantages!

Historically speaking, homeowners tend to pay lower rates with variable mortgages, but these mortgages are also vulnerable to fluctuations because they’re tied to the Bank
of Canada’s prime rate (which is announced eight times per year). Fixed rates, on the other hand are primarily influenced by the yield on Canadian government bonds (bond yields) , and are typically higher than variable rates, but their rate is consistent throughout the term of the mortgage. Below are a few questions to help you determine which type
of mortgage is right for you.

CAN I AFFORD TO TAKE A VARIABLE RATE MORTGAGE

There is some risk associated with variable rate mortgages, so if  you go this route, you must be able to mitigate the risk if rates do rise.  One method of protecting yourself involves setting your payment to a fixed amount that’s higher than the minimum requirement.  For example, setting your payments based on the current 5 year fixed rate will allow you to provide a buffer in the event that rates rise and, because you’re paying more than the minimum amount, you’ll be paying more of your principal as well.

DOES A VARIABLE RATE MORTGAGE FIT MY RISK PROFILE?

Once you have decided you can afford a variable rate mortgage,  the next thing to assess is whether a variable rate mortgage fits your personality, lifestyle and comfort zone. If you’re the type of person that can’t sleep at night knowing that your rate and payment may change by 0.25%, then a variable rate mortgage may not be the best option for you.

WHAT TYPE OF VARIABLE RATE MORTGAGE SHOULD I CHOOSE?

There are three main factors to consider when choosing a variable rate mortgage:

  1. Payment frequency – Make sure you are aware of the options available before deciding. Some lenders may not allow certain variations of payment frequency (i.e.accelerated biweekly or weekly payments).
  2. Rate changes – Some lenders change their variable rates in line with the Bank of Canada eight times per year while others do it quarterly.
  3. Conversion to fixed rate – Does the lender allow the mortgage to be converted to a fixed rate mortgage at anytime? If so, what rate are you guaranteed on conversion – the best discounted rate or the posted rate?

If you would like to discuss all of your options in detail please contact me directly at 250-819-6536 or 1-888-819-6536 or email me at lisa@mortgageplayground.com

Lisa Alentejano

Posted in Applying for a mortgage - Lisa Alentejano services the interior, Bank of canada rates, BC Government Loans, BC Mortgages, Canadian Mortgage News, downpayment loans, First Time Home Buyer Steps, Fixed rates, Hombuyers Downpayment, Home Equity, Home Loans, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Low Interest Rates, Mortgage Affordability, Mortgage by Lisa Alentejano, Mortgage Language, Mortgage Playground - Lisa Alentejano, Mortgage Consultant

BC First Time Home Buyer Downpayment Loans

save_moneyThere has been a lot of changes with regards to qualifying for a mortgage as of late, but I was happy to see that there is now some relief available for Canadian first time home buyers when it comes to buying a home and  saving for a downpayment.

The BC Government has implemented the BC Home Owner Mortgage and Equity Program granted to Canadian citizens or permanent residents who have never previously owned a property and only apply to homes worth less than $750,000. A buyer must be able to     pre-qualify for a mortgage (that’s where I come in) and have a gross household income of less than $150,000. Applications open Jan. 16, and the program ends March 31, 2020.

The government would put a second mortgage on a property to reflect the amount it loaned, but not require any interest payments or payments on the principal for the first five years. After that, the 20-year repayment plan would be set at the prime lending rate plus 0.5 per cent, leaving the homeowner to pay back both the original mortgage and the down-payment loan at the same time.  There is no restriction to pay the loan out in part or full at any time.

The loans are available for condos, townhouses or detached homes. On a property worth $600,000, the government loan could help a buyer meet or exceed the federally set minimum down payment of $35,000. In one example, provided by B.C. Housing, a person who saved $30,000 could apply to get an additional $30,000 from the province, giving the buyer a $60,000 down payment.

Another example for reference is; as the minimum downpayment requirement is 5%, you, the consumer,  would have to come up with 2.5%, then the government would match the additional 2.5% required to make up the total 5% downpayment.  There are different sources of downpayment to consider as well;  RRSP, Borrowed, gifted from a family member or your own savings.

As always if you’re considering purchasing a home in the near future, the best thing to do is be informed.  My consultations are free and there is no obligation.  If you are simply looking to explore your options or curious and have some questions, please do not hesitate to email me at lisa@mortgageplayground.com or call me toll-free at 1-888-819-6536.

Lisa Alentejano

 

 

 

Posted in Bank of Canada, Bank of canada rates, BC Mortgages, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Debt, Home Loans, Interior Mortgage Expert - Lisa Alentejano, Jim Flaherty, jim flaherty mortgage rules, mark carney, Mortgage Affordability, Mortgage Broker Kamloops, Mortgage Language, Mortgage Rates, new mortgage rules canada, Protecting your biggest investment your mortgage, Refinance Your Mortgage, Renewing your mortgage

New Mortgage Rules Coming Effective July 9, 2012

Some changes that will come into effect on July 9, 2012.   How will this affect homebuyers or home owners in terms of dollar amounts… Heres a quick snapshot below;

Payments based on a 25 year amortization vs a 30 year amortization would cost the borrower  a difference of $52.48 per month per 100K in mortgage.   In terms of borrowing power the homeowner that could buy a home for $300k would now only be able to afford a $266K home, a difference of approximately $34k based on the above changes from 30 year amortization to 25 year.  If your in the market for a mortgage or a refinance, I would consider firming those details up before July 9, 2012 to take advantage of our current options.

READ ON; After speaking in Halifax just hours after Finance Minister Jim Flaherty announced a series of changes that come into effect next month, Mr. Carney reiterated his concerns about the effects that his ultra-low interest rates have had on the behaviour of both borrowers and lenders, warning the economy cannot “depend indefinitely” on debt-fuelled spending, especially as incomes stagnate.

At the same time, Europe’s growing crisis is expected to keep the central bank on hold for a long time yet, leaving regulation as the only real avenue for reining in housing-related investment, which Mr. Carney said now makes up “an unusually elevated share” of the economy.

“In this context, Canadian authorities are co-operating closely to monitor the financial situation of the household sector, and are responding appropriately,” Mr. Carney, who was almost certainly involved in Mr. Flaherty’s decision, said in a speech to the Atlantic Institute for Market Studies.

“Today, federal authorities have taken additional prudent and timely measures to support the long-term stability of the Canadian housing market, and mitigate the risk of financial excesses.”

Last week, Mr. Carney and his policy team warned that Europe’s worsening drama could slam Canada with a “major shock” if it is allowed to spread out of control and further infect healthier regions, particularly the still-fragile U.S. economy. They also warned that more Canadian households could find themselves under water with their debt payments if a big unemployment shock were to result, and sharpened their warnings about Toronto’s booming condo market.

Some investors are betting that the situation in Europe and the failure of the U.S. economy to gain more traction could force the central bank to cut interest rates from the current 1-per cent level sometime later this year. However, in his speech, Mr. Carney strongly hinted that he is not even considering a reduction in rates, echoing much of the language on the economy from his last interest-rate statement on June 5, indicating his domestic outlook hasn’t shifted much since then.

“Despite these ongoing global headwinds, the Canadian economy continues to grow with an underlying momentum consistent with the gradual absorption of the remaining small degree of economic slack,” said Mr. Carney, whose next decision is scheduled for mid-July. “To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”

Still, Mr. Carney left himself the same wiggle room from recent statements, saying that the “timing and degree” of any rate hikes would depend on how things play out.

There’s good reason for him to be cagey, and not just outside of Canada’s borders. Despite the worries about consumers over-borrowing, recent economic data suggest the housing market is already slowing down, and a report from Statistics Canada today showed that in April, retail sales fell – both in terms of prices and volumes.

Some analysts have already warned that the mortgage moves could be too effective and spark a slowdown in a key area of strength before the economy is ready for it.

Earlier Thursday, Mr. Flaherty confirmed that Ottawa will reduce the maximum amortization period to 25 years from 30 years, and will cut the maximum amount of equity homeowners can take out of their homes in a refinancing to 80 per cent from 85 per cent. Also, the availability of government-backed mortgages will be limited to homes with a purchase price of less than $1-million, and the maximum gross debt service ratio will be fixed at 39 per cent, and the maximum total debt service ratio at 44 per cent. All the changes will take effect on July 9.

Mr. Carney’s speech, meanwhile, was largely a re-hash of his views on what is needed to foster the more balanced and sustainable global economy on which export-heavy Canada’s fortunes largely depend, including an “open, resilient” financial system. The central banker, who is also chairman of the Group of 20-linked Financial Stability Board, again warned against delaying the implementation of reforms designed to make international finance safer for the global economy.

“The current intensification of the euro crisis has only sharpened our resolve,” he said, adding that a system that restores confidence will need to “rebalance” the relationship between government regulation and financial markets, and in which policy makers realize they must help do what’s good for the world rather than taking a simply national approach.

Posted in advice on locking in your mortgage, Applying for a mortgage - Lisa Alentejano services the interior, British Columbia Mortgages, Canadian Economy, Canadian Home Buyers Academy, Canadian Mortgage News, First Time Home Buyer Steps, Hombuyers Downpayment, Home Buyer Closing Costs, Home Loans, Kamloops broker, Kamloops First Time Home Buyer Tips, Kamloops home mortgages, Kamloops Mortgage Broker - Lisa Alentejano, Kamloops Mortgages, Mortgage Affordability, Mortgage Broker Kamloops, Mortgages - Get a second opinion, Pre Approval Mortgage, Protecting your biggest investment your mortgage, Real Estate Market, Refinance Your Mortgage, Refinancing, Save your money, Why use a mortgage broker

CANADIAN HOME BUYERS ACADEMY

Working For You!

 

 

Are you interested in making some cash when you buy or sell your next home? Maybe you simply want to learn more about Real Estate in Canada? Have You been looking for general information on buying and financing a home but cant seem to find the information in one specifac place that has consistent information.  Take a good look at this program, I think you will find alot of great information and tools for you to use.

I am proud to be a part of this worthy and valuable program.

Go check it out here http://www.canadianhomebuyersacademy.ca

Posted in Applying for a mortgage - Lisa Alentejano services the interior, BC Mortgages, BCMortgage, British Columbia Mortgages, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Debt, Fixed rates, Home Loans, inflation hedge strategy, Interior Mortgages, Kamloops First Time Home Buyer Tips, Kamloops Mortgage Broker - Lisa Alentejano, Kamloops mortgage consultant, kamloops mortgage financing, Kamloops Mortgages, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Low Interest Rates, Mortgage Affordability, Mortgage Broker Kamloops, Mortgage by Lisa Alentejano, Mortgage Consultant Kamloops, mortgage financing kamloops, paying a penalty to break my mortgage, Refinance Your Mortgage, Refinancing, Salmon Arm Mortgage Broker, salmon Arm mortgages, Salmonarm Mortgage, Save your money, Why use a mortgage broker

Calculating your mortgage penalty…

Todays market is bringing alot of questions about whether you should consider refinancing your mortgage for a better rate.  There are many different reasons people might re-negotiate their current mortgage.   You may be considering using some of the equity in your home you have built up and use it to buy a rental property,  Make and RRSP contribution or investment, pay off some high interest rate debt or just renegotiate your current rate for a better more competitive rate and lower monthly payment.

Below are some ways in which you can get a good idea on what kind of penalty you may be faced should you want to refinance your current mortgage.  Again these are used simply as a guideline and are in no way exact.   The lending institution you are currently dealing with will give you the exact amounts relating to your specifac situation.

Calculating Payout Penalties & Interest Rate Differentials (IRD)

Many closed mortgages include a clause stating that the payout privilege on the mortgage will be a three-month interest penalty, or interest differential, whichever is greater.

For the calculations below,  using the following scenario:
  • $300,000 remaining on the mortgage
  • 3 years into a 5-year fixed term at 5.5%
  • Today’s interest rate: 3.5%

We’ll just be using the simple interest amount – the actual amount of the penalty could be a little less than the amount quoted in the examples.

Three Month Interest Penalty :

Mortgage Balance X Interest Rate X 3 months

Plugging in the variables above, we would get:

=   $300,000   X   0.055    X   0.25                (5.5% = 0.055,  3/12 = 0.25)

= $4125.00 would be the 3 month interest penalty

Now we have to calculate the interest differential – and that’s where penalties can be quite substantial – especially since interest rates have dropped considerably lately.

Interest Differential Penalty:

Current Mortgage Balance  X Interest Rate Differencial  X Time remaining

=$300,000 X 0.02  X 2

(0.02 = 2% which is the difference from 5.5%-3.5%, and 2 years left in term)

=$12,000.00 would be the Interest Differential Penalty

In the example above, the bank would then use the Interest Differential Penalty since that amount is the greater of the two. Remember that the way banks calculates their penalties sometimes is a mystery to me and can be greater than the figures above so make sure you ask.

Please remember that its not always about RATE,  although important,  there are other important steps you need to take into consideration when considering paying a penalty and shopping for a mortgage.  Let a mortgage expert, put strategic steps and the right product in place that will ultimately make sure its in your best interest to pay a penalty and that your saving money.

I would also invite you to take a look at this link.  I am part of a community of mortgage brokers that created a forum to get our best ideas together a create a simple and educational strategy  showcased here on this website.    A program I implement with all my clients, wherever they are in the mortgage process.  Its a program created in mind to help consumers pay more attention to their mortgage and implement simple easy steps to save thousands of dollars.   When was the last time  your bank phone you up at any time to show you how to save money on your mortgage.  I think i know the answer…..Please click the link and learn something valuable  today then contact me to get started.

http://www.moneyinyourmortgage.com/af/194/lisaalentejano/about

I am a licensed mortgage broker with years of financial experience,  able to help you with your mortgage  any where in Canada and Alberta. Remember my services are free and never should you feel there is any obligation.   So please pick up the phone and contact me directly I would love to hear from you 1-888-819-6536. If your more comfortable with email please feel free to email me your questions at lisa@mortgageplayground.com

Expert, unbiased advice is what i offer to all of my clients.

Author, Lisa Alentejano

Posted in BC Assessment values, British Columbia Mortgages, Canadian Economy, Canadian Mortgage News, Home Equity, Home Loans, Kamloops broker, Kamloops home mortgages, kamloops mortgage, Kamloops mortgage consultant, kamloops mortgage financing, Kamloops Mortgages, Kelowna Mortgage Broker, Mortgage Affordability, Mortgage by Lisa Alentejano, mortgage financing kamloops, Mortgage Playground - Lisa Alentejano, Mortgage Consultant

BC Assessment Sends Out 10,000 Extreme Value Change Letters for 2012

A majority of homeowners in British Columbia won’t know what has happened to their property value over the past year until they receive their annual BC Assessment notice in early January 2012.

Each year, BC Assessment sends out Property Assessment Notices on December 31 for nearly two million properties in British Columbia. Local real estate sales determine the property values that BC Assessment reports based on a market value approach with a July 1 valuation date.

However, some BC property owners have received an early indication of what to expect when BC Assessment releases their 2012 Assessment Roll figures on Tuesday, January 3, 2012.

On December 5, 2011, BC Assessment sent out approximately 10,000 “Extreme Value Change” information letters to BC property owners where the assessed value of their property increased by 30% or more above their local area.

These BCA information letters are sent to property owners as part of the pre-roll consultation process for significant value change where the assessed value of a property increases more than the average increase in an area.

“Generally speaking, for property owners whose 2012 assessments have increased 30% or more above the average increase for their local community, we have provided advanced letters informing them of this change,” said Tim Morrison, Communications Coordinator for BC Assessment, in an interview with BuyRIC.com.

“For example, if the average market increase for a specific property type within a specific jurisdiction was 5% and your property increase was 35% or higher, then you would likely receive an advanced letter.”

This advanced information indicates that approximately 10,000 BC property owners across the province will see a 30% or higher than average increase in their 2012 assessment notices.

The most significant 2012 property assessment increases in British Columbia occurred in Vancouver. BC Assessment sent out approximately 1,800 of these “Extreme Value Change” letters to Vancouver property owners and approximately 800 to the North Shore, including West Vancouver and North Vancouver property owners.

BC Assessment 2012 Roll - Extreme Value Change Property Letters

Morrison added, “We provide impacted property owners with advanced notification in order to make them aware that the change will likely result in an increase in their 2012 property taxes as determined by their local municipality.”

“We want to ensure that people know that they can contact us, so that we can work with them in explaining our market analysis techniques used to assess their properties.”

BC Assessment serves to ensure accurate, fair, and equitable annual assessments throughout British Columbia. Local governments and other taxing authorities are responsible for property taxation and, after determining their own budget needs in the spring, will decide their property tax rates based on the assessment roll for their jurisdiction.

These “Extreme Value Change” information letters are part of BC Assessments “no surprises” focus to engage BC property owners and local governments on changes that might have a big impact on property valuations.

Ongoing audits, reviews, and market analyses are part of BC Assessment’s quality assurance commitment to property owners.