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Renewing Your Mortgage? Don't Sale yourself Short!

Canadians are a schizophrenic bunch when it comes to their consumer loyalties.

 

They have sharp pencils and harsh words when it comes to cell phone contracts, data plans or cut-rate flights and hotel deals. But when it comes to banking, they’re pushovers, a complacent fee-tolerant bunch, happy to get something, but not the best deal that they might.

 

Your Banking fees are one reason why Canadian banks are so profitable. Last week TD and RBC reported 15 per cent increases in second quarter profit. RBC’s shares hit a new record. TD too.

 

So why such loyality to the Bank? Is it a sense of comfort?

 

Well Your banks make a lot of money off you and especially when it comes to renewing your mortgage. Today, a bank renewal rate is 3.29% for 5 Years with Bank of Montreal for their clients. Is this loyality to their consumers? The answer is no they are not! Banks make huge profits by not giving the best mortgage rate to their clients. They will offer the standard mortgage rate which adds to their bottom line.

 

Clients owe it to themselves to shop around for their mortgage rate! Wait a min. Is this what a mortgage broker does? The answer is yes! Mortgage Brokers represents you the consumer and NOT THE BANK! We look out for your best interest and not the banks! Mortgage Brokers have many great solutions. We deal with 50 different lenders across Canada, inculding the banks!

 

Today, a local Mortgage Brokerage, Mortgage InGenuity, Your Mortgage Architects, in Waterloo is offering a 5 Year Standard Mortgage at 2.97% for 5 Years and 2.89% 5 Year Value Mortgage. What a savings to the consumer. The mortgage renewal process is the same and we enjoy saving money for our clients.

 

Assuming a $300,000 mortgage, Mortgage InGenuity's  best 5-year fixed mortgage rate is 2.84 per cent,  The cost of that mortgage is $1,395 a month. The best discounted 5-year fixed mortgage rate offered by the Bank of Montreal at 3.29 per cent. Will cost $1,465 a month.

 

Taking the lower rate saves $70 a month, $840 a year, or $4,200 over the five years.

 

There’s a cost when people don’t shop around! I encourage you to visit our office and get all the options presented to you. Our Service is free and we get paid by our lenders/banks for placing mortgages with their financial institution. Again our clients do not pay! Do not sell yourself short when it comes to mortgages!!

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Fixed vs. Variable Rates - The Debate Continues

"A long-stalled overnight rate has had brokers embracing the variable-rate mortgage but will a new forecast from a major bank convince them that fixed is superior, once again?

“While we have in the past supported going variable, and even though short-term rates are likely to remain low this year, current offers on long-term mortgage rates and the improving economic outlook tilt the balance in favour of locking in at this stage—fixed now modestly trumps variable,” Douglas Porter and Benjamin Reitzes, BMO economists said in their latest report. “Not only does our interest rate outlook project an advantage to locking in at current attractive 5-year rates; but, combined with a shorter, 25-year amortization period, such a step would significantly dampen widespread concerns about the vulnerability of household finances.”

Entitled “Mortgage choices: The fixe(ed) is in,” Porter and Reitzes explain that although variable rate mortgages have been the cheaper option 85 per cent of the time since 1975, the value gap has been shrinking and an improving economy is believed to hike interest rates in 2015, which would result in a rate increase to variable products.

“The bond market has sent out loud warning signals over the past year that the era of low interest rates may finally be drawing to a close,” the economists said. “For instance, 5-year Government of Canada and U.S. Treasury bond yields neared 2½-year highs early in 2014, on an improving outlook for the global economy and expectations of continued Fed tapering.

“As bond yields rise, the cost of funds for lenders also rises, ultimately putting upward pressure on consumer and business borrowing costs, includeng long-term mortgage rates.”

Still, the pair don’t discount history and believe there is still a case to be made for choosing a variable rate mortage.

The clearest advantage to a variable rate mortgage is that it has consistently cost less than its conventional counterpart over time … (and) plus, one can always lock into a fixed rate at a later date,” they said."

 

Mortgage Broker News

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Using a Mortgage Broker - Ever Used One?

USING Mortgage Brokers - Ever Used One?

There are two options for getting a mortgage in Canada. Your bank represents only one lender, and the person on the other side of the desk from you is working for that bank – not for you. In today’s economy – and with so much of your financial life tied up in your mortgage – it doesn't always make sense to restrict yourself to a single lender.

That’s where a mortgage broker comes in. Increasingly savvy homebuyers are demanding more information, more choice, and better value with their mortgages. And they’re getting that with mortgage brokers. In Canada, now, over 35% of all mortgages are arranged by mortgage brokers. Most of these mortgage professionals are independent. While they are often part of a brokerage firm, they don’t work for any particular lender. They work for the homebuyer.

What many Canadians don't realize is that there are about 50 different lenders out there – including the major banks, of course – with a huge range of different mortgage products and rates. An independent mortgage broker has access to a huge range of options –and they can shop around and compare rates and features to get you the best mortgage deal: whether you’re buying your first home or your tenth, whether you're thinking about an investment property, a cottage, a home reno, or a debt-reduction plan.

On any given day, a mortgage broker can give you almost instant insight into countless mortgage rates and options. Maybe a lender has just announced a special deal on a mortgage that's perfectly suited to your needs. Your bank doesn't carry it, and the only way you would learn about it is through a broker. The difference could be worth thousands of dollars to you.

But beyond the access to a huge range of lenders, mortgage brokers are there to “go to bat” for you with the lenders. They can weigh the pros and cons of your various options, they know what the lender is looking for, and they’ll negotiate on your behalf. They can help homebuyers – or future homebuyers – polish up their credit rating to ensure they’re eligible for the best possible rates. You can share information with them (for instance, you’re worried about losing your job, you might have to borrow a down payment) that you may not feel comfortable sharing with a lender.

Mortgage brokers work hard to provide service at flexible hours to accommodate your schedule – and because they build their business on referrals, you know they’re working hard to do the best possible job for you. Best of all, their services are free in the majority of cases; the winning lender pays them a fee– which makes sense, since the lender didn't have to pay a salary for an employee to get the business.

 

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