May 31, 2011 - Rate Update and Mortgage News

Bank of Canada Update

Good morning!  Great news - this morning, May 31, 2011,  the Bank of Canada announced that it is maintaining its overnight rate at 1%, which will keep the prime interest rate at 3%.  This means that there will be no change to your payments if you have a variable rate mortgage.  The next announcement is scheduled for July 19, 2011.   

Mortgage News

Many lenders have dropped their fixed rates again, and excellent discounts are available on variable rates too.  Now is an excellent time to get a rate hold in place if you are thinking of buying, renewing or refinancing in the future.  Many clients have been saving thousands by refinancing and taking advantage of these excellent rates.

Did you know that 35 year mortgages are still available?  I represent top lenders who will still offer 35 year amortization.

Did you know that it is possible to buy a property with $0 down-payment? I have access to lenders who will fund 100% of the property you are purchasing.

Contact me anytime to do a mortgage check to make sure you have or are getting the best mortgage and terms available to you.

I also encourage you to join my www.facebook.com/CanadaLending page where I also provide regular mortgage updates to help you get ahead.

Giveaways!

Did you know that I do regular giveaways to thank you?  Everyone who receives my newsletter or who likes my www.facebook.com/CanadaLending  page is entered. 

Want more chances to win?  Tell a friend about my services.  When they sign-up for my newsletter or like my facebook page, you’ll both receive another entry in the draws. 

Good luck!

And congrats to Tina Maurice and Nimira Anandji, the winners of my most recent giveaways, iPod Nanos.

Thank you to all of my loyal members!

Referrals

Friends don’t let friends pay too much in interest.:)

Do you know someone who could benefit from my service?  If so, please introduce us.

They will receive excellent service, fantastic rates, and I will be sure to thank you too!

My Services

I make getting a mortgage easy.

I offer all types of mortgage products for home, vacation and investment properties.

I represent multiple major banks and lenders and negotiate with them on your behalf to get excellent interest rate discounts that you normally can’t get on your own. This can dramatically decrease your monthly payments and put more money back into your pocket.

I've saved many clients thousands of dollars.

I can get you lower mortgage payments, get you approved for a larger purchase price, and can help you to pay off your mortgage sooner.

Best of all, my services are free for you, since the selected lender usually pays me when I place your mortgage with them.

You can find out more information about my services on my website, www.canadalending.ca  

If you are thinking about purchasing a property, are renewing your mortgage, or if you are wondering if it makes sense to refinance or renew your mortgage early, I am ready to help you.

Contact me and find out how I can save you money.

This rate update and mortgage news brought to you by:

                                        

Shanna Gottfried, MBA

Senior Mortgage Broker

Verico Complete Mortgage Services Inc.

Phone #: 604.543.9595 / Toll Free: 1.877.816.4848

Fax #: 1.866.860.1638

email: shanna@telus.net

web:  www.CanadaLending.ca

facebook: www.facebook.com/CanadaLending

Fabulous Giveaways!

I have partnered with some fabulous local businesses to offer some amazing giveaways!! The contest is easy, and the winners will be chosen May 15, 2011.
Find out how to enter by visiting this page: http://www.charlenephoenixphotography.blogspot.com/ Good luck!

Interesting Current Review on the Fixed / Variable Debate

3 ways to deal with rising mortgage rates

By Moshe Milevsky | Thu Feb 10 2011

 

Here we go, again. The economy is generating more jobs, a handful of banks raise mortgage rates and all of a sudden you’re being advised to lock-in your mortgage before the bank doors slam shut. In fact, some say you’d better hurry-up and buy a house now before mortgage rates go so high you’re locked-out of the housing market for ever.
This is not the first time that mortgage rates are on the brink of blooming only to fade a few months later. This has happened more than a handful of times in the last decade. The headlines are often the same. A month or two of increasing mortgage rates, the public is urged to act now, and then a few months later something unforeseen appears on the horizon.
The last occasion was just over a year ago. The posted 5-year mortgage rate in March, 2010 went from 4.7 per cent to 5.15 per cent in April, and then to 5.3 per cent by May. The recommendations were clear: lock-in. But then, by October they were back to 4.5 per cent. The economy sputtered, Greece and Spain hit the headlines and the rest was history.
Don’t get me wrong. Short-term interest rates are abnormally low today and the Bank of Canada has pledged to raise them eventually. But that is a far cry from advocating that you lock-in your mortgage - which is actually driven by long-term bond market rates - or heaven forbid using this as an excuse to buy a house you can’t really afford.
My main concern is about relevance and context of this advice. I call it the fallacy of “carve-out thinking.” It stems from the misguided notion that modern-day personal financial problems should be viewed and solved in isolation.
Remember that mortgage payments are just one component of your personal balance sheet. You may also have an RRSP, TFSAs and other investment accounts. You may also have a pension, cottage or rental property and a very large portfolio of debt. Every one of these holdings is sensitive to interest rates.
If long-term interest rates move up quickly and substantially then any bonds or fixed income investment you hold will fall in value – possibly by a lot. A big and sudden rise in interest rates won’t be kind to the real estate market either. There will be many spillover side effects.
Reacting to this fear by locking-in your mortgage is akin to preparing for an ice and snow storm by only salting your driveway, but forgetting to close your windows. Sure, that helps, but if you really believe a bad storm is on its way, there are many other – possibly more important—things you should be doing to prepare.
So what should you do with your mortgage? Here’s the best guidance I can offer.
1.Don’t rush into home ownership because you are convinced that mortgage rates are headed-up and you will never see 5 per cent again.
2.If you’ve just bought a home and you have a large mortgage, relative to the home’s value, I urge you to lock-in for as long as possible. You probably should not have “floated” to begin with and are now facing the probable risk that real estate prices decline and interest rates increase. Add to this the possibility of job loss, disability or other macro factors, and you are the ideal candidate for a fixed rate mortgage. The last thing you want to be doing is trying to renew your mortgage in a year or two from now, if rates increase and possibly the appraised value of your house has declined by 10 per cent or more.
3.If your mortgage payments are only a small fraction of your monthly expenses and you have built-up substantial equity in your home, and – this is key – you have a diversified portfolio of financial assets, like stocks and bond inside your RRSP and other accounts, then my advice to you is very different.
If you are concerned that interest rates are on their way up, then perhaps you should change your asset allocation and reduce the fixed income investments in your portfolio . Remember, if mortgage rates increase, this is because long-term interest rates have gone-up and the longer the duration of your bonds, the greater are your losses. I say, lighten-up on bonds. If the prognostications prove correct and rates go up, then yes you will pay more on the mortgage but you were spared the pain in your RRSP. On the other hand, if rates stay around their current levels, then you win. . Remember, locking-in today will likely involve paying more than what you are paying right now, often by 1 per cent to 2 per cent more. Think of it as insurance.
The point is to think more holistically about all the financial assets – and risk exposures—on your personal balance sheet. As for me, I have a floating rate mortgage because I can tolerate the risk and want to pay as little as possible for unnecessary insurance.
Moshe A. Milevsky is a professor at York University’s Schulich School of Business. His latest book is Pensionize Your Nest Egg.

The Benefits of Using a Mortgage Broker

Trying to find the best mortgage for your needs and your budget can be a difficult and often frustrating task. The wide selection of mortgage products available today means that consumers can enjoy a variety of options, and these options increase the chances of getting a great value loan. However, the downside is that you could end up spending hours scouring through the mortgage deals from various companies, and while you are busy trying to interpret the financial jargon that many lenders may throw at you, another buyer could snatch the house of your dreams from under your nose.

Going it alone when looking for a suitable mortgage is a time consuming process. With the pace of life as it is today, many of us barely have time to sit down and enjoy a little quality time as it is. Spending hours glued to the computer or ringing around various lenders is something that most of us can do without. If you go directly from lender to lender to get your mortgage, you will end up having to complete a new application for each lender, which can waste a great deal of time. Additional time will be taken up with browsing and comparing all the different deals with each lender, and then comparing the lenders against one another.

That is why you need someone that is not only up on all of the latest information, but knows the ins and outs of the mortgage industry. This person will know how to locate the best program for your needs while keeping your new mortgage payment affordable for your budget. This is true of independent mortgage brokers.

Using a mortgage broker is an effective way of getting a mortgage package to suit your needs without having to commit hours of your time to searching and browsing. When you use a mortgage broker service, you will simply be cutting out all of the time and work involved in finding a mortgage to suit your circumstances. Another great benefit is that the mortgage broker works for you, the customer, and normally don’t charge a fee (unless you have an extraordinary financial situation), as they are compensated by the lenders once they close the mortgage deal. A good mortgage broker will be able to source a wide range of mortgage deals on your behalf, and will then put forward the ones that offer the best value in terms of interest rates and monthly repayments. All you have to do is complete one simple application form, which saves you the hassle of having to complete a form for each lender in which you are interested.

An established mortgage broker will already have formed links, contacts, and relationships with a wide range of mortgage lenders. He or she will therefore know which lenders may cater for your particular needs. For instance, if you have a poor credit rating and you are looking for an affordable mortgage, the broker will most likely know which lenders offer affordable finance to those with a tarnished credit history and can therefore approach the right lenders straight away. If you were looking for a bad credit mortgage without the help of a broker, you could end up going through one application after another with a range of unsuitable lenders, and you could end up with a long line of refusals, which could make your credit rating even worse.

Using a mortgage broker is a great way to get a good value, affordable mortgage that is tailored to meet your needs. It is also an excellent solution to getting a good mortgage deal without having to put in the hard work and time.