Son Of A Broker » Canadian Mortgage Lenders

Monday Mortgage Interest Rate Minute May 10th

chris — Tue, 11 May 2010 00:14:48 +0000

2.65% – 1 Year Fixed

3.85% – 3 Year Fixed

4.35% – 5 Year Fixed

3.25% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.40 3 Year Variable

P-.50 5 Year Variable

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

How To Qualify For a Variable Rate Mortgage

chris — Tue, 04 May 2010 19:40:52 +0000

On April 19th 2010 new mortgage rules came into effect which have made it a little bit more challenging to qualify for a variable rate mortgage. Traditionally lenders qualified your maximum mortgage amount based on their current 3 year fixed rate. However, today it is a little bit more complicated and this post will help you if you are considering financing with a variable rate mortgage.

The rate used to qualify your maximum mortgage amount now depends on whether your mortgage is high ratio or not. Generally speaking if the mortgage you require represents 80% (i.e. less than 20% down payment) or more of the value of your home, then your mortgage is high ratio. If your mortgage is high ratio, then the lender is required to use the new Bank of Canada Qualifying rate. This rate is set every Wednesday by the Bank of Canada (Look for series V121764).

If your mortgage represents less than 80% (i.e. more than 20% down payment) of the value of your home then the rate used to qualify is the traditional 3 year fixed rate offered by your lender.

So in practical terms what does this all mean and what is the significance to you?

Based on the rates at time of publishing this post the difference is huge. Consider the following scenario for illustration purposes. Assume that your household income is $50,000 per year and you carry no outside debt. If your mortgage is high ratio then the maximum variable rate mortgage you could qualify for would be $184,815 based on the new bank of Canada qualifying rate of 6.25%.

If your mortgage is conventional (or represents less than 80% of the value of your home) then the total mortgage amount you qualify for would be $248,835 based on today’s best 3 year of 3.84%.

That is a difference of $64,000! That means that you may have to sacrifice variable to move into the neighbourhood or home that you want. That means that when you renew your mortgage you may be limited to taking a fixed. That means that you maybe forced to purchase with 20% or more to get the interest rate that you want.

New Merix Fixed 5 year with 90 Day Ratehold

chris — Tue, 04 May 2010 16:42:24 +0000

The problems over seas in Europe are already hitting close to home as bond yields have dipped for the last couple of days indicating that investor confidence is shaken. This bodes well for borrowers looking to get into fixed rate mortgages as there may be a reversal to the sharp steady increases to fixed rate mortgages over the past couple of weeks. Today, Merix Financial announced that they are lowering their fixed 5 year to 4.35%.

Click here to complete an application for a Merix Financial Mortgage today.

Monday Mortgage Minute May 3rd 2010

chris — Mon, 03 May 2010 16:28:42 +0000

Mortgage interest rates continue to climb for the 4th week in a row. There is a lot of discussion between observers and economists who think that the banks are prematurely driving rates up as highlighted in Rob Carrick’s Globe & Mail article, “Are Big Banks Jumping the Gun?”. With each passing week the variable option looks better and better, the only draw back is if you require a high ratio mortgage you will need to qualify based on the Bank of Canada’s Qualifying Rate which is an astronomical 6.25%. Not only is the spread between fixed and variable almost 3% there are a lot of forces at play which may prevent the prime rate from increasing significantly over the coming months, inflation is down in Canada and the Greek crisis will have far reaching global effects.

Chris Molder -Son Of A Broker

2.65% – 1 Year Fixed

3.85% – 3 Year Fixed

4.64% – 5 Year Fixed

4.39% – 5 Year Fixed Quickclose (Must close before June 15th)

3.25% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.40 3 Year Variable

P-.50 5 Year Variable

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Toronto Monday Mortgage Minute April 26th 2010

chris — Mon, 26 Apr 2010 19:11:40 +0000

After a very quick increase to fixed rate mortgages over the past 2 weeks mortgage lenders have started to compete for the new fixed 5 year. The standard rate is 4.59% however some lenders have introduced their quickclose rate at 4.39%.

The dilemma of deciding to go fixed over variable is on every borrower’s mind these days. Over the weekend the Globe & Mail featured the following article “Possible Rise In Mortgage Rates Pitting Couples Against One Another” . The spread between fixed (4.59%) and variable (1.75%) is about 2.80% which is significant. We know that in the coming months the Bank of Canada will increase the Prime Rate but with the latest report from Statistics Canada indicating that inflation was down in March it is questionable how quickly the prime rate will move up. Variable is looking like the better option these days but if you can’t make up your mind there is always the Merix 50/50. (3.25%)

5 Year Fixed – 4.54%

Quickclose 5 Year Fixed – 4.39% (must close before June 15th 2010)

3 Year Fixed – 3.84%

1 Year Fixed – 2.65%

Merix 50/50 Hybrid – 3.25% (current effective rate)

3&5 Year Variable P-.50% (1.75% current effective rate)

Rates subject to change without notice.

Click here to view the embedded video.

Mortgage Interest Rates for March 15th

chris — Mon, 15 Mar 2010 12:53:53 +0000

Bond yields are up which would typically result in an increase to fixed rate mortgages however lenders are artificially keeping rates low in order to gain market share. This is good for borrowers currently in the market however don’t expect the low fixed rates to stay around forever as it only takes one bank to break the deadlock and we could see rates jump up by 0.50%. To secure a low rate give me a call or e-mail me for a quick consultation.

Chris Molder – Son Of A Broker

1 year fixed – 2.65%

3 year fixed – 3.35%

5 year fixed – 3.79%

3 year variable – Prime-.40% (1.85% effective rate)

5 year variable – Prime-.30% (1.95% effective rate)

RATE SPECIALS

5 year fixed – 3.69% (must close by April 26th 2010, purchase & refinance only)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Fixed vs. Variable: The Train Is On The Tracks

chris — Thu, 11 Mar 2010 15:00:05 +0000

Do you remember when you were a kid and you stood on the train tracks on a hot summer day peering into the distance for the coming train? Then suddenly, in the distance, a single light appeared suspended in mid air and the shape of a massive train hurdling towards you sent your heart racing. It was the ultimate game of chicken. How long could your nerves last before you had to step off those tracks and into safety?

While mortgages are nowhere near as exciting as that childhood thrill, we can draw a parallel to the game of chicken and staying in a variable rate mortgage today. Current economic data indicates that the era of historic low interest rates may come to an end promptly and it is advisable to reassess your mortgage to determine if it is time to lock in.

Currently it is possible to lock your variable rate mortgage into a 5 year fixed at a rate anywhere between 3.89-3.99%. The train is on the tracks… what will you do?

Mortgages are very dynamic and the guidance that we offer is based on the circumstances of each individual. If you would like to review your mortgage to make sure that you are still on track please call us to have a quick chat. 416.461.0204

Chris Molder – Son Of A Broker

Monday Mortgage Minute February 8th – Toronto Interest Rates

chris — Tue, 09 Feb 2010 02:26:26 +0000

We started off this morning with the lowering of the fixed 5 year special offered by mortgage lender Merix Financial leading all the lenders down. The “quickclose” special is now at 3.69% for a fixed 5 year rate. The only condition is that the mortgage must close by March 26th 2010. Other than that this is a mortgage with full privileges. Most other lenders have followed suit and are currently offering 3.89% for their standard rates. You can currently lock in your variable at 3.89%. If you are looking for a mortgage and need somebody to lead you through the confusion that is the mortgage market please feel free to contact me. Also keep in mind that I am donating my services to the Hatian Relief.

Chris Molder – Son Of A Broker

1 year fixed – 2.65%

3 year fixed – 3.50%

5 year fixed – 3.79%

3 year variable – Prime-.10% (2.15% effective rate)

5 year variable – Prime-.25% (2.00% effective rate)

RATE SPECIALS

5 year fixed – 3.69% (must close by March 26th 2010, purchase & refinance only)

3 year variable Prime-.30% (1.95% effective rate closing in 30 days, purchases & refinance only)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

Licensed by the Financial Services Commission of Ontario under Lic#M08010066

Monday Mortgage Minute – January 18th 2010

chris — Mon, 18 Jan 2010 05:11:59 +0000

Toronto mortgage interest rates have taken a definite U turn from the direction predicted by economists at the beginning of the year. It looks like low interest rates may be here to stay for a while longer. I can currently offer a 5 year fixed at an unprecedented low rate of 3.75% subject to lender restrictions. However it is a very clear indication of where rates are headed. Last week some conservative lenders had increased their fixed 5 year rate to 4.50% but were quick to reverse that decision. If you don’t see a rate here or have any questions please contact me.

Chris Molder – Son Of A Broker

1 year fixed – 2.30%

3 year fixed – 3.45%

5 year fixed – 3.89%

3 year variable – Prime-.10% (2.15% effective rate)

5 year variable – Prime-.25% (2.00% effective rate)

RATE SPECIALS

5 year fixed – 3.75% (must close by Feb 23rd 2010, purchase & refinance only)

3 year variable Prime-.30% (1.95% effective rate closing in 30 days, purchases & refinance only)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

What Does Term Refer To In My Mortgage Contract?

chris — Fri, 15 Jan 2010 03:26:55 +0000

There is no such thing as a silly question. Especially when it comes to your mortgage and money! As a mortgage broker I sit down and work with a lot of borrowers, some have a very high level of financial literacy and others never had the opportunity or need to learn. Arranging a mortgage on your home along with being a necessity should also be an educational experience.

When you arrange a mortgage on your home with a lender you are entering into a contract with the lender. Term refers to the length of time that the mortgage contract is effective for. For the term of the mortgage both you and the mortgage lender are obligated to honor the conditions and terms as set out by the mortgage contract. Most mortgages in Canada are arranged for 5 years at a time, however there are mortgages with terms from 6 months all the way up to 10 or 15 years and beyond.

During the term you are making 4 promises to the lender, otherwise known as covenants:

1- You promise to keep up with the mortgage payments

2- You promise to keep the property taxes up to date

3- You promise to keep the property in good repair

4-You promise to keep sufficient insurance coverage on your home

This is not a one way street though, during the mortgage term the lender is also making promises to you:

1- They give you ‘quiet and uninterrupted possession’ of your home

2- They cannot change the agreed upon interest rate during the term

3- They cannot demand that you repay your mortgage before the term expires (unless you break one of your promises)

Most mortgage lenders will allow you to break the mortgage contract before the term is up. This is where the penalty comes in. The majority of mortgage contracts are written so that the penalty is the greater of 3 months interest or the Interest Rate Differential (IRD). I could write a whole post on what to look out for when it comes to IRD. NOTE: Be wary if you are offered a low interest rate that is too good to be true because that is a sign that your mortgage may not be ‘breakable’ and you will be handcuffed to the lender until the term expires or you will have to pay them all the interest that you would have paid them over the term of the mortgage.

What happens at the end of your term you may ask? If you are a good client to the mortgage lender and pay them consistently over the life of the mortgage they will be happy to extend a mortgage renewal to you to enter into another term with them. This is an important juncture in the life of your mortgage because it represents an opportunity for you to refinance, move or paydown or off your mortgage with no interest penalty. It also represents a good opportunity for you to negotiate a lower rate or switch lender. Amazingly 90% of Canadian homeowners take the posted rate renewal offers their banks send them and pay more then necessary in interest.

If you are frustrated or confused about mortgage financing and looking for a guide with patience and who really understands the ins and outs of the business contact…

Chris Molder – Son Of A Broker

Licensed by the Financial Services Commission of Ontario under Lic#M08010066