Category Archives: MortgageCanadaCalculator

Here Is A Method That Is Helping Home Owners Save Thousands On Their Mortgage

There is an age old debate that exists in the mortgage industry.  This debate is centered on what entity is the best mortgage provider.  Some argue that it is the major banks that are the best option, while others are convinced that the mortgage broker industry is the best bet.

 

The reality is that the average person has limited to no knowledge of the mortgage industry. As a result of this, they may believe that there are no differences between banks and mortgage brokers and the mortgage products that they offer.

 

In fact, it is no secret that sometimes the mortgage broker industry is looked upon as a sub par option when compared to major banks.  Unfortunately, the general public has a misconception that mortgage brokers are not looking out for the best interest of their customers.   This friends, could not be further from the truth.

 

I can tell you from my first hand experience that obtaining a mortgage through a mortgage broker, in most cases is the best option versus obtaining a mortgage through a chartered bank.  Here is the reason why:

 

Mortgage Brokers Work With Multiple Lenders

 

Mortgage Brokers like FamilyLending.ca have established relationships with multiple mortgage lenders.  It is not uncommon for a mortgage broker to know and work with 40 or more different lenders.  These lenders can be major banks, medium sized mortgage companies, or new, up and coming private mortgage lenders.  Because the mortgage broker, in this case FamilyLending.ca, has multiple relationships with a variety of lenders, they also have the ability to pick and chose mortgage interest rates and mortgage terms for their customers.

 

Mortgage Interest Rates Offered By Banks

 

If a customer obtains a mortgage from a bank, the bank is going to offer this customer their available rates on their mortgage products.  If the customer is not happy with the rate offered, and they are proactive enough to make a request for a reduced rate, chances are they may obtain a slight discount on the interest rate.  Please note though that just because the customer asks for the discount here does not necessarily mean that they will obtain it. 

 

Mortgage Interest Rates Offered By Mortgage Brokers

 

Due to the fact that Mortgage Brokers work with a large network of lenders, this allows them to have more flexibility when picking an interest rate for their customers.  For example, if a customer asks to have the most competitive mortgage interest rate currently available, chances are that the mortgage broker will be able to deliver on this for their customer.  This is simply achieved by the mortgage broker surveying their existing lenders in order to see who has the most competitive interest rate offer.  Once it is determined which lender has the desired interest rate for the customer, the mortgage would be set up through this particular lender.

 

Mortgage Terms Offered By Banks

 

The mortgage terms offered by banks are pretty much set in stone.  This is not necessarily a bad thing.  Banks are very much set on their ways and don’t easily deviate from their business strategies.    However, what this does mean is that there is very little to no flexibility at all when it comes to adjusting the mortgage terms.  Examples of mortgage terms would be things such as the maximum amortization allowed on a mortgage.  Most recently in Canada the maximum amortization length of a mortgage was reduced from 35 years to 30 years on March 18th 2011.  As a result, this means that most, if not all of the major banks in Canada will only be offering a maximum amortization of 30 years.  This is done by the banks in order to keep in line with the rule changes implemented by the Government. 

 

Mortgage Terms Offered By Mortgage Brokers

 

Again, due to the fact that Mortgage Brokers work with many different lenders, this means that they also have many different options in picking the appropriate mortgage terms for their customers.  For example, in using the example above, if a customer requests a mortgage amortization length longer than 30 years, chances are that the Mortgage Broker can deliver on this for their customer.  The Mortgage Broker is not limited to selecting the mortgage products for their customers from traditional lenders such as banks.  Therefore, they may choose to obtain the mortgage for their customer from a lender that offers amortization periods longer than 30 years.  There are still some lenders out there that are offering up to 40-year mortgages, despite the mortgage rule changes that occurred on March 18th 2011.

 

Overall, I am personally a fan of obtaining mortgages through Mortgage Brokers.  The majority of the mortgages that I have obtained have been through mortgage brokers, and I have been very happy with my decision regarding this.  I can confidently say that mortgage brokers have helped to save me thousands of dollars.  Not to mention, their advice has been instrumental in helping me to make thousands as well. 

 

 

 

Best Regards,

 

Neil Uttamsingh

 

Neil Uttamsingh is the President of First Rental Property.  He provides knowledge and confidence to individuals looking to buy their first rental property.  Follow Neil’s blog @ www.firstrentalproperty.com
Contact FamilyLending.ca for more information.

Steps For Home Buyers to Consider …

 

 

Step 1: Get Preapproved!

The first step in the home buying process is to take a moment to get the preapproval from a lender of your choice. This can save you hours of searching for properties that do not suit your budget, or what are even more painful, purchasing a home then discovering you are not eligible for financing.  Getting preapproved provides you with peace of mind, aids in limiting the search criteria and most importantly, gives your lender a fighting advantage by being able to alleviate a merchants worry about funding.  Latter is especially important should a competing deal surface.

Step 2: Seek Out Loan Conditions!

Prices will be flexible. Banks will gladly open their doors to get your business especially if you have a good credit rating and are interested in any other services they provide. 
Released rates would be the best starting point.  It is wise to know what the best rate is and this is completed by obtaining quotes of lenders posted rates from competitive companies. As well, asking if the financial institution covers evaluation charges, buy-out fees, penalties, payment options, portability etc.  can save you a great deal of money over the life of the mortgage.

Step 3: Make Sure You Receive Professional Inspection!

Nobody wants to purchase a home only to come to the realization that there are defects, concealed or not. Be sure to obtain assessments of the places necessary. If you get the results back and there are in fact inadequacies, the purchase cost may be discussed to deal with the crucial maintenance. The agent you’re working with can advise which assessments to consider.

Step 4: Utilize An Expert Broker!

The broker of your choice can help you make a purchase with the smallest number of difficulties. Your broker is able to ensure the cost will be marketplace cost. The lender can offer expert guidance regarding everything from incorporated factors, settlement techniques and so on. All things considered, it is their job to do what you want.

Step 5: Sell 1st Then Buy

In the event pricing will be significant, you should always sell your current house previous to purchasing another.  The best thing about this is it lets you know exactly what cash you’ll have available for your next investment. Getting rid of your home first allows one to put less restriction towards the investment, making the proposal very appealing. Sometimes, additional funds can be required by the home vendor which goes towards removing the property from the listings. An additional benefit will be when you find a property that you really love, chances are others will also find it attractive therefore; one could be put into a position that their proposal may be overlooked, but if you have sold your house already, this is not a problem.

Step 6: Understand Your Purchasing Expenses as a Whole

Know all the costs linked to the purchase. Consider the following fees: lawful charges, exchange taxes, building fees, remodelling and any other housing costs that are applicable. 
Contact FamilyLending.ca for more information.