INSURANCE PREMIUM INCREASES MAY 1st – FOR HIGH RATIO MORTGAGES

INSURANCE PREMIUM INCREASES MAY 1st – FOR HIGH RATIO MORTGAGES!!!!

Please note that with the premium increase by CMHC and Genworth – lenders are advising us that the turn around time to get deals approved is quite tight right now. If you want to get your deals approved in time please have them to us by Tuesday at the latest.

Thanks and if you have any questions or if we can help your clients please let us know!

CMHC announced it would hike premiums for default insurance by an average of 15 per cent effective May 1. The increase would hit buyers who have a downpayment of less than 20 per cent.

The highest premiums are paid by those who put down just five per cent of the home’s purchase price. At that level, the mortgage insurance premium rises from 2.75 per cent to 3.15 per cent.

CMHC estimates that for the average buyer needing insured financing, the new rates will add about $5 a month.

How do I get a free copy of my Equifax Canada Credit file?

Free Credit File Options for Canadian Residents

How do I get a free copy of my Equifax Canada credit file?

You may request a free copy of your credit file through one of the options below:

1. To order your free credit report by phone, call 1-800-465-7166

2. To order your free credit report by mail or fax, please fill in this Canadian Credit Report Request Form and forward to National Consumer Relations using the address or fax number listed on the form.

The form must be completed, with photocopies of your identification to:

National Consumer Relations;
P. O. Box 190, Station Jean-Talon
Montreal, Quebec H1S 2Z2

Or by Fax: 514-355-8502

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Looking for Mortgage – Residential or Commercial – We Can Help.

 

Hi
If You, Your Friend/Family or Your Client/s looking for mortgage for

Any Situations or low credit score*.
Residential or Commercial – We can help.
Visit us:
https://torontomortgagetrends.wordpress.com/b2b-realtors/
or better yet call us direct-line or Apply On-Line.
Do you need a mortgage and the bank has turned you down?

Perhaps you would like to consolidate your credit card debt at a lower rate by using the equity in your home and only have one payment per month?

I have access to institutional and private money (anywhere in Ontario) for:

• 1st and 2nd residential mortgages
• 1st and 2nd commercial mortgages
• Bad credit financing
• Constructions loans
• Commercial and Industrial loans
• Debt consolidations
• Self employed borrowers
• New to Canada

Call us now for a free consultation and Make us Your Best B2B partner in progress,

Sincerely Appriciated,

Vijay Gandhi, MBF,B.Sc.
Mortgage Agent
License #: M10001947
CENTUM Metrocapp Wealth Solutions Inc., License #: 12147
716 Gordon Baker Road , Unit #204A
Toronto, ON, M2H 3B4
ON-Line/ Web:
http://www.centum.ca/vijay_gandhi
E-Mail: vijay_gandhi@centum.ca
Direct: 1-647-267-6338
Office: 1-905-471-0002
Office Fax: 1-888-813-9403
*O.A.C./Terms & Conditions Apply

Fixed Rate Mortgage vs. Variable Rate Mortgage

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fixed rate mortgage, variable rate mortgage

Fixed Rate Mortgage vs. Variable Rate Mortgage

One of the many decisions home buyers have to make is to decide between choosing a fixed and variable-rate mortgage. With rates being so low, it confuses buyer now as may be the time to choose to go variable.

By choosing a fixed-rate mortgage, you are locked into an interest rate and your payments stay consistent over a given term and period unless you decide to use other options allowed under mortgage terms and your agreement. For first time home buyers taking on a huge amount of debt, a fixed-rate mortgage may help them sleep a little better at night. The homeowner will be paying more in interest, but they will know exactly what they will be paying for the entire mortgage term.

The homeowner that chooses a variable-rate mortgage can expect payments to fluctuate as interest rates rise and fall. For that reason, the homeowner usually gets a better interest rate reflecting the improbability and increased risk. (As Finance Minister recently made comment over we can believe the interest rate may not be rising sharply in this near future, but you never know it can definitely fluctuate).With the central bank rates barely changing over the past year, and not expecting to change any time soon, lenders have been closing the gap between fixed and variable mortgage rates. With the rate gap shrinking, it means it’s a good time to think about choosing a variable-rate mortgage, the buyer have more grip over the mortgage deals.

There are a few factors that favour choosing a variable-rate mortgage. Over the last fifty years, variable rates mortgage have been approx. 1% cheaper than fixed-rate mortgages. The last time variable rates were at a disadvantage compared to fixed-rates mortgage was in the late 1980’s, when the rate get huge surge.

Variable rates mortgage in Canada are near an all time low. Recently, The Bank of Canada indicated they’ll be keeping interest rates low as they are uncertain about the North American and European economy. Since the U.S. Federal Reverse promised to keep interest rates low through 2012 and 2013, and Europe is facing debt crisis, we can expect rates to stay low in Canada as Canadian interest rates usually don’t much differ from rates in the U.S.

Some of the top mortgage lenders/ mega brokers/ financial institutions in Canada think rates might drop even lower; it all depends on government monitory policy and economical recovery…

When it’s time to sell your house and you are not at the end of your mortgage term, it’s cheaper to break a variable rate mortgage than a fixed rate mortgage. Typically when you break a fixed rate mortgage the penalty is the greater of three months interest or the Interest Rate Differential. If you’re looking to break a variable rate mortgage you are only subject to a penalty of three months’ interest or better yet verify with your mortgagee, lender, bank, financial institution.

One of the great advantages of choosing a variable rate mortgage is you can lock in all or part of your mortgage at a fixed rate anytime you want, when it is variable open. if you did locked in for variable rate for certain period, your mortgage obviously with variable rates mortgage are a riskier product to choose, but it’s a risk that can really pay off as well. If you’re not a risk taker, ask your mortgage lender broker if they offer a half fixed and half variable product. It’s better of both world 50/50 mortgages.

Talk to us before you decide to buy real estate, renewal, refinance, 2nd mortgage, equity loans, cash back mortgage, or pre-approval…
Vijay Gandhi,
Sales Representative- REALTOR^®,
RE/MAX Dynasty Realty Inc. Brokerage*
&
Mortgage Agent Licence #: M10001947
CENTUM Metrocapp Wealth Solutions Inc.Licence #: 12147

C: 647. 267. 6338
(Direct-Leave message or text)
P: 416.335.4335 | 905.471-0002
(page me-Have me)
F: 905.471.7441

Feeling House Rich Cash Poor?

Feeling House Rich Cash Poor?

Are your home expenses gobbling up all your money? there is a solution out there with us..

Home poverty happens when there’s decreased household income, typically from unforeseen unemployment or reduced salary. Other times, people overbuy, thinking that an extra $30,000 wouldn’t make much difference or perhaps a person signed up for an overly aggressive payment plan.

Home poverty is stressful because there’s little money left over for other things like RRSP contributions, home maintenance, car repairs and vacations.  It’s also cited as one of the leading causes of spousal spats. The key to getting out of home poverty is increasing your cash flow. To do that, you either need to make more money or cut back on your expenses.

To make more; ask for a raise, work overtime, get a second job, open a small business or do some consulting. Don’t forget to apply for all applicable government support and tax breaks (www.cra.gc.ca).

Making some more money takes time, so focus on cutting expenses immediately.

If you’re in major financial trouble, you need to make major adjustments. Consider selling your home and buying a more affordable one. Rent out rooms or investigate the legal requirements to transition your basement into a rental unit. If you’ve got two cars, sell one and share the other with your partner. Or, and if you’re close to mass transit, get rid of your car. If you’ve signed up for a luxury vacation, cancel it. If you’ve got Junior in private school, put him in the public system.

How To Choose The Right Toronto Mortgage Broker ?

Toronto Mortgage Brokers :
How To Choose The Right Toronto Mortgage Broker
Welcome | Home Purchase |Mortgage Renewal
Refinancing / Debt Consolidation |Tap Into Home Equity

Finding The Best Toronto Mortgage Brokers

Toronto has many mortgage brokers available to help you locate a mortgage product that’s right for you and aid you in negotiating with the bank or credit union, but that doesn’t mean you should choose one at random and trust him/her with something as important as your mortgage. If you need a mortgage in Toronto, you need to get in touch with the best Toronto mortgage brokers, and then choose the one that’s right for you.

When the stakes are your mortgage you want to make sure you chooes carefully.

• When picking the best Toronto mortgage brokers, the thing to watch out for is reputability. How reputable is your mortgage broker? Does she look out for her client’s best interest or is she being commissioned by the banks to push specific products? Does she have a nice website, plenty of positive client reviews? These are questions to ask when determining how reputable your mortgage broker is.

• The next things you need to do is research and ask around a little. It’s possible that a friend or family member encountered a particularly helpful mortgage broker and is able to share the information with you. Getting a recommendation from a friend is some of the most priceless information out there when evaluating a professional.

• Make sure that the brokers you’re looking at have proper offices and a physical address. Too often unprofessional, unlicesend brokers try to get clientele by advertising on the internet without having a place where they can be reliably reached.

Considering how many brokers there are out there, you should take your time and be careful when making your selection. Despite this, there is still plenty of opportunity to find the best Toronto mortgage brokers and choose from among them.

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Types of Mortgages

Tags

canada mortgage and housing, canada mortgage and housing corporation, convertible mortgage, high ratio mortgage, pre approved mortgage

• Pre-Approved Mortgage
• Conventional Mortgage
• High-Ratio Mortgage – CMHC / GE Capital Insured
• First Mortgages
• Open Mortgages
• Closed Mortgages
• Fixed-Term Mortgages
• The Adjustable Rate (A.R.M.) Mortgage
• Secured Lines of Credit
• Equity Mortgages
• Multiple Term Mortgages
• The 6 Month Convertible Mortgage
• All-Inclusive-Mortgage
• Bridge Financing

Pre-Approved Mortgage

A Pre-Approved mortgage is a Free and No-Obligation deal that lets you know before you go looking for your home or signing an offer to purchase, how much you can afford to borrow based on your qualification and personal credit rating. We’ll arrange for you the most competitive rates with longest rate guarantee period that goes up to 120 days – if rates go higher, your rate will not be affected, and if rates go lower, you get the lower rate. This protection is solely responsible for savings thousands of dollars for many people who obtained a pre-approval and the rates increased afterwards.

Too often in the past, the mortgage was left to the very end, but with our Online Pre-Approval or by simply e-mailing us, we can take care of this important process within hours. Once you are Pre-Approved, you can confidently negotiate an offer on a home. A seller also prefers to negotiate an offer of a purchaser who has been pre-approved. With more lenders, lower rates, and no-cost, no-obligation, make us your choice for your pre-approval.

Conventional Mortgage

A conventional mortgage is a loan that does not exceed 75% of the purchase price or appraised value of the home, whichever is less. This type of mortgage does not have to be insured against default.

High-Ratio Mortgage – CMHC Insured / GE Capital Insured

A high-ratio mortgage is a loan that is above 75% and up to 95% of the purchase price or appraised value of the home, whichever is less. These mortgages must me insured against loss by either Canada Mortgage and Housing Corporation (CMHC), a Federal Government Corporation, or GE Capital, a private insurer. The premiums can be added to the mortgage amount or paid at closing, and are as follows:

For Mortgages Up To:     75%                         No Insurance Required
For Mortgages From:     75.1-80%                  Premium is 1.00%
80.1-85%                 Premium is 1.75%
85.1-90%                 Premium is 2.00%
90.1-95%                 Premium is 2.75%

If you obtained an insured mortgage after April 1’st, 1996, the premium you paid on the mortgage is now portable to another property (if you closed before this date, it is not portable, meaning that if you bought another home and your mortgage needed to be insured, you must pay the applicable premium again.) NOTE: This insurance is for the benefit of the lender against default. It is very costly and there is another way we can arrange a mortgage for you with a low down payment. That is with a 1’st mortgage and a 2’nd mortgage. For your unique situation, it may be less costly to consider this option. Banks, on the other hand, cannot offer you this option as they cannot provide secondary financing over 75% of the purchase price or value of the property.

First Mortgages:

A First mortgage is the first debt registered against a property that is secured by a first “charge” on the property. If a default on the mortgage occurs, the first lender has first right on the property to recover the outstanding principal and interest costs, and any other costs incurred during the process. Second Mortgages: A second mortgage is a debt registered after a first mortgage has been registered. In most cases, the interest charged on the second is higher than the first, reflecting the higher risk to the lender, but over a short term, still more cost effective than paying the high cost of the CMHC/GE Capital insurance premium. They can be used to finance up to 90% of the purchase price or value of the home.

Open Mortgages

An open mortgage allows you the flexibility to repay the mortgage at any time without penalty. Open mortgages are available in shorter terms, 6 months or 1 year only, and the interest rate is higher than closed mortgages as much as 1%, or more. They are normally chosen if you are thinking of selling your home, or if you are expecting to pay off the whole mortgage from the sale of a another property, or an inheritance (that would be nice).

Closed Mortgages

A closed mortgage offers the security of fixed payments for terms from 6 months to 10 years. The interest rates are considerably lower than open, and if you are not planning on any one of the above reasons, then choose a closed mortgage. Nowadays, they offer as much as 20% prepayment of the original principal, and that is more than most of us can hope to prepay on a yearly basis. If one wanted to pay off the full mortgage prior to the maturity, a penalty would be charged to break that mortgage. The penalty is usually 3 months interest, or interest rate differential (I.R.D. – please refer to glossary for detailed explanation).

Fixed-Term Mortgages

With a fixed-rate mortgage, the interest rate is set for the term of the mortgage so that the monthly payment of principal and interest remains the same throughout the term. Regardless of whether rates move up or down, you know exactly how much your payments will be and this simplifies your personal budgeting. In a low rate climate, it is a good idea to take a longer term, fixed-rate mortgage for protection from upward fluctuations in interest rates.

The Adjustable Rate Mortgage (A.R.M.)

The Adjustable Rate Mortgage (A.R.M.) provides a lot of flexibility, especially when interest rates are on their way down. The rate is based on prime minus 0.375% and can be adjusted monthly to reflect current rates, and for the first 3 months of the mortgage, a large discount on the rate is given as a welcoming offer. Typically, the mortgage payments remain constant, but the ratio between principal and interest fluctuates. When interest rates are falling, you pay less interest and more principal. If rates are rising, you pay more interest and less principal, and if they rise substantially, the original payment may not cover both the interest and principal. Any portion not paid is still owed, or you may be asked to increase your monthly payment. This mortgage is fully convertible at any time without any cost to you, if you choose a 3 year term or greater, and offers a 20% prepayment privilege at any times throughout the year. While traditionally, banks offer variable mortgages up to 75% of the purchase price or the value of the home, we can go up to 90% with this product.

Secured Lines of Credit

Use the equity in your home that you have built up to purchase investments (where interest costs would be deductible against the earned income), finance home renovations, buy a car, or any other reasonable needs, with rates as low as prime. They can be arranged up to 75% of the purchase price or value of the home, and should you need more, we can arrange another secured line of credit as a Second mortgage up to 90%. Accessing the available credit is as simple as writing a cheque, or using the issued credit and/or debit card. You do not have to draw the money until you need it, and once you make a withdrawal, you can pay of your balance at any time or make monthly payments as low as interest only. As you pay down the balance, you have that much more available credit (revolving credit).

Being a secured product, there are the normal legal and appraisal fees that are applicable. From time to time, there are promotions where a lender will cover for part or all of these costs.

A word of caution:

Although these lines are very flexible and versatile products, great caution and care should be taken. It is very easy and very tempting to use it for everything whereas normal restraint would have been exercised, and suddenly, there are thousands of dollars more that have to be repaid.

Equity Mortgages

These are mortgages that are assessed on the equity of the home (market value minus the mortgage amount). They can be as high as 75% of the purchase price or value of the property and if more is required, we can look at a small Second mortgage. These are generally offered to applicants that do not meet the normal income and/or credit qualifying guidelines. You may have little or no income verification, self-employed, and/or your credit may be less-than-perfect.

Multiple Term Mortgages

If you wanted the lower rates of a short term mortgage but wanted the security of a long term, why not choose both. Yes, “build your own mortgage” product. You can split your mortgage in to as many as 5 parts, all having different terms, rates, and amortizations, but one total monthly payment. This way, you are spreading the risk. But, be prepared to be “hands-on” and watch the market very carefully here. This is not for everyone, as the time and stress levels are quite high.

The 6 Month Convertible Mortgage

When rates are on their way down, or you may feel that they will in the near future, a 6 month convertible mortgage offers you the short term commitment at fixed payments, with an added advantage that while within the term, the mortgage is fully convertible to a longer term from 1 year to 10 years. At the end of the 6 month period, the mortgage becomes fully open, where one can renew with the existing lender or transfer to another lender. Even though it is offered at many financial institutions, there are differences from one to the next.

All-Inclusive-Mortgage (A.I.M.)

The AIM mortgage takes care of everything automatically. For Purchases, it includes: Solicitor’s legal fees and standard disbursements to close the purchase and mortgage; Title transfer; Title Insurance from LandCanada for the clients; CMHC application fee or Appraisal fee; 1% Cash-Back to cover Land Transfer Tax; Registration of Deed and Mortgage. For Refinances, it includes: Legal fees and standard disbursements to prepare and close the mortgage; Title Insurance from Land Canada; CMHC application fee or appraisal fee; 1% Cash-Back; Registration of new first mortgage; Registration of discharge of existing first and second mortgage. The minimum term available is a 5 year term.

Bridge Financing

Bridge financing refers to a special, short-term loan needed to cover the time gap when two properties, both firm sales, are involved and the closing dates don’t match. The property being purchased closes before the one that was sold. There is a small set-up fee charged by the lender to have the bridge loan arranged, plus the cost of the interest as now you are carrying both properties for a short time. The rate charged on the bridge loan is about 2-3% above the bank’s prime.

The Right Home/Investment

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home investment, pre approved mortgage, real estate agents, real estate investments, several steps, The Right Home/Investment

The Right Home/Investment

www.vijaygandhi.com              for Real Estate Investments

You have a pretty good idea of the price range you can afford, and now it’s time to fine tune and have everything come together.

Step 1: Pre-approved Mortgage

Obtaining a pre-approval tells you exactly how much you can afford and guarantees your rate for up to 120 days. Now, you can buy a home with the confidence of knowing you qualify. It also shows the vendor you are serious about buying the home and keeps you several steps ahead of others in the market.

Step 2: Preparation

Now that you know your price range, you can begin the search. First, make a Checklist of your needs the home will fulfill, such as: type of home, type of ownership, location, inside and outside features, condition, and other matters such as property tax levels, etc. At this time, you should decide on a lawyer so that he/she will be ready to check all legal documents to ensure your interests are protected.

Step 3: The Search, for house and agent

With your pre-approval, personalized needs checklist, and lawyer at hand, you are ready to start looking at properties. At this time, it is important to find yourself a real estate agent to help you with your search. The real estate agents have a lot of information readily available for sale and the current selling prices. They can help you fine tune your personalized needs checklist; explaining the types of property and ownership, recommending neighborhoods, pointing out inside and outside features, and condition of a particular property.

The agent also is skilled at preparing the paperwork involved in making an offer to purchase and closing the sale (your lawyer will be handy here to review any offers). Make sure that you communicate your needs clearly, as you are responsible for all decisions. Choosing the right agent is important for you as you are placing a lot of trust on them to help you with your purchase. Ask friends and relatives if they could recommend someone. Chances are, if they are recommending them, there was something about the level of service and commitment they received from them.

Once you have found the right home, visit it at least twice, once in the daylight and once at night, and have your needs checklist with you.

Step 4: Making An Offer

If you have decided that this is the right home for you, decide on a figure and have your agent prepare the Offer (Agreement of Purchase And Sale). With your agent, list everything you want included (i.e., conditions on financing and inspection, survey clause, appliances, light fixtures, etc.). At this time, you may want your lawyer to check it out, and certainly prior to waiving any conditions to make the offer firm.

A firm offer : means that you will buy the property as outlined in the offer of purchase and that there are no conditions attached. Once the vendor accepts the offer, you are both bound to the agreement.

A conditional offer : means that you will buy the property if those certain conditions are met. We recommend that a condition on financing is included, especially for high-ratio insured mortgages. If you have a condition on financing clause, get in contact with us right away. We’ll get right on it to finalize the mortgage approval. At this time, you will need the following information:

• Copy of the accepted Offer To Purchase
• Copy of MLS listing (if listed on MLS service)
• Completed and signed application (if one is not on file yet, so that we can run a credit check).
• Confirmation of your earnings: if you are salaried, a signed letter of employment, 3 years tax returns and assessments if commissioned, and 3 years tax returns and financial statements if self-employed.
• Confirmation of your down payment: it may be from your savings, RRSP, equity from sale of another home (copy of sales agreement), a gift letter for any money gift.
• If purchasing a condominium, a copy of the financial statements for the condominium corporation

Once all conditions have been satisfied (the offer has been accepted), a deposit is required as a symbol of commitment to the offer of purchase, and it is made payable to the listing Real Estate Firm “In Trust”. Interest on the deposit can be requested, and this deposit will be applied towards your down payment on closing.

Step 5: Closing the deal and taking possession

After the mortgage has been approved and all conditions waived, you must deliver the following documents to your lawyer:

• Copy of the complete accepted offer to purchase (all schedules, waivers, etc)
• Certificate of Fire Insurance – The insurance company will need to know the details of property and Mortgage Company to prepare this. Lenders usually require you to arrange for full replacement value of the building.
• A copy of a Survey, signed by a qualified land surveyor. In lieu of a survey, title insurance is acceptable with most lenders.
• Advise us of the name, address, and phone number of your lawyer so that the mortgage instructions can be sent to him/her.
• You should arrange for utilities (such as electricity, water, fuel, and telephone) to begin service in your name.
• A few days before the closing date, you will meet with your lawyer to go over all details. At this time, you will also be provided with a dollar figure so that you can prepare your certified cheque, made in trust to the lawyer. This amount will cover for the balance of the down payment, closing costs and adjustments (please refer to section: “Closing Costs and Adjustments” for details and estimated costs).

On closing day, the lender will provide your lawyer with the agreed mortgage funds to close the transaction. Your lawyer will register the property and the mortgage in your name, and obtain the keys and the deed for you.

Re-Financing, Re-Newing : Mortgage info.

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good role models, Mortgage info., mortgage specialist, Re-Financing, Re-Newing, refinancing your mortgage, responsible citizen, taxable incomes

Refinancing, Renewing

Refinancing is the process that pays the existing mortgage and/or any other legal claims against the property and sets-up a completely new mortgage(s). There are many reasons as to why you should consider refinancing your mortgage:

Consolidate debts:

If your monthly bills have gotten out of control, you might be able to refinance your home and pay them off. The advantage of doing this is to lower your total monthly payments. You should have a mortgage specialist review your situation and make a recommendation.

Refinance a First & Second Mortgage into a new First:

If you have two mortgages on the same property, you can combine them into a new first mortgage, as long as the total amount does not exceed 90% of the value of the property. If the new mortgage is over 75% of the value of the property, normal CMHC/GE Capital premiums and guidelines apply, and one thing to remember here is that only outstanding amounts can be combined – any discharge penalties and costs must be paid separately at closing (please note that we have cash-back programs to help with these penalties).

Financing a Renovation:

If you are doing major renovations (spending over $15,000), it could be less painful monthly with a mortgage as opposed to a loan or line of credit.

Financing the purchase of other investments:

You can use the equity in your home to finance the purchase of investments, and also benefit from the lower carrying costs of a secured line of credit or mortgage and also write-off the interest costs against the taxable incomes.

Financing the purchase of investment property:

If you have the equity and have a desire to be a landlord, you could take equity out of your property by refinancing the mortgage to use towards the purchase of an investment property. This is also called leveraging of your assets.

Financing children’s education:

The best thing we can do for our children is be good role models to them, teach them to be responsible citizens, and give them a good base with a good education. With the high cost of many things nowadays, as well as education, it is sometimes difficult to have that kind of money in the bank, but you many have it in the form of equity in your home. Education is something they will never lose on.

To refinance your mortgage today to your advantage, simply APPLY ONLINE NOW with no obligation whatsoever.

Closing Costs related to Refinancing:

The regular costs related to the refinancing process are: appraisal ($150-$214), legal fees & disbursements ($700-$1000), title insurance if survey not available ($225), CMHC/GE Capital Premium if mortgage is high-ratio (this cost can be added to mortgage), PST when CMHC/GE Capital premium is required, and any discharge penalties.

You should review your mortgage on a regular basis and keep up with new products and offers that are available – they may save you a bundle. When you break your mortgage contract to renew your mortgage at a new rate and a new term, you are faced with a prepayment charge to reimburse your financial institution for the lost interest income. Typically, this prepayment charge is based on the greater amount of either 3 months interest or the interest rate differential (IRD).

Early Renewal

Whether or not you should early-renew your mortgage depends on several factors. If the current rates are lower than the rate you have, compare the prepayment charge against the savings by having the lower rate, and this will point the way. Or, if you believe that interest rates will be higher at your existing renewal date, you can renew early to protect yourself from higher rates.

One thing to remember if you decide to early renew, is the prepayment charge will have to be paid up front. If there is room, you can add it to your mortgage, but you will have to go through a lawyer to redo the mortgage, and this cost will have to be taken into consideration when deciding which way to go. Some financial institutions will blend both rates for the new term.

Remember that we have the CASH-BACK programs that could pay for your prepayment charge. The savings in some situations run into the thousands of dollars.

Re-examine your mortgage from time to time, and at least once a year. There are thousands of dollars that could be saved in many situations, but they go unnoticed.

Switching / Renewing

When the mortgage is about to mature, most lenders will mail out their renewal agreements around 30 days before the mortgage matures. Often, this causes a lot of grief for many people, especially if rates start to climb just before the mortgage comes due.

We can guarantee your rates up to 120 days (4 months) before your mortgage comes due, and this service is free and with no obligations. Just this protection could and has saved thousands of dollars for our clients. Let’s get it working for you, too.

When your mortgage is due for renewal, it’s a great opportunity to make sure that you’ve got the right mortgage for your present needs. Since the mortgage is fully open at this time, this is the perfect opportunity to pay down your mortgage. Whatever you can afford, even a small amount, will have a significant impact in terms of interest you will save over the life of the mortgage. It is also a great opportunity at this time to consider a more frequent payment method, such as bi-weekly or weekly, if you are not already doing it. And of course, choosing the new term is important.

Another step you can take to save thousands of dollars in interest is if at renewal the rates are lower than the rate you just had, and you are comfortable with making those payments, keep the payments the same at the lower rate and start planning for the mortgage-burning party.

Q: What are Private Mortgage Investors?

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holding a mortgage, mortgage investor, mortgage investors, private investor, Private Mortgage Investors, sluggish market

Q: What are Private Mortgage Investors?

A: Most mortgages are held by banks or other financial institutions. Increasingly, however, individual persons are choosing to hold mortgages directly, mostly because the investment returns that can be made on interest.

Typically, the holder of a private mortgage is the seller of the home. In this instance, the owner sells you the home and carries back a mortgage called Seller Take Back Mortgage and a note on which you make payments. If you default, the mortgage allows the owner to foreclose on the house, just as if he or she were a commercial lending institution. This is an easy way for a homeowner to sell his or her home in a sluggish market and get all of his or her asking price. It’s beneficial to the buyer, who doesn’t have to undergo an extensive credit and finance check. The downside to being a seller who is holding a mortgage is that he or she must wait for the money. If a seller doesn’t have the ability to do that, then he or she may sell the mortgage to a third party private mortgage investor.

Mortgages are negotiable instruments, and they can be bought and sold on the open market like stocks or bonds. The advantage to seller is that he or she gets the lump sum of cash, but the advantages to the private mortgage investor are even better. Usually, mortgages sell for a discount of their face value (less than the amount of the principal). This means that not only does the investor get to collect interest on the note, but he or she actually makes a profit on the principle amount.

Sometimes, a third-party private investor will offer a mortgage to a home buyer. In this situation, the investor is not the owner of the home, rather it is a person who lends the buyer the money to purchase to the home and takes back a promissory note, secured by a mortgage, just like a bank or financial institution would do. Like a bank, the third party investor makes money on collecting interest.

Potentially, private mortgage investors can make more money from a private mortgage than a bank could from a traditional mortgage because they can charge higher interest rates. They charge higher interest rates because they take on greater risk in lending to people who can’t qualify for traditional mortgages. Usually private mortgage lenders work with people who have sub-prime credit, but they may also work with risky projects regardless of credit. For instance, commercial construction loans for un-established businesses may be financed through private mortgage investors.

If you are just looking for an owner who will finance your purchase, check the for sale by owner FSBO ads. Most owners will say in the ad whether they are willing to finance the purchase. If you have your heart set on a house that is not FSBO or the owner hasn’t mentioned it, ask. It’s not something that people think of right away, but many people are open to it once it is explained to them. Particularly once they realize they can sell the mortgage if they need to get out. Otherwise, ask your agent to do some research on the internet or do it yourself. You could try contacting an investment firm which may be able to put you in touch with private mortgage sources.

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