The BMO 2.99% “No frills” 5 year fixed rate will end up costing you more money in the end.

Consider this, the majority of Canadians that take a 5-year fixed mortgage end up switching and/or adding to their mortgage prior to maturity. There are endless reasons for this, including:

Upsizing, job loss, separation/divorce, death of an applicant, or refinancing to:, get a lower rate, get a lower payment, make an investment purchase, consolidate debt, pay for medical expenses, fund a child’s education, pay for a renovation, or meet personal needs..

The BMO “Low rate mortgage” will NOT allow you to refinance or switch to another lender within your 5 year term. You are ONLY allowed to refinance with BMO. And considering that in 3 – 4 years rate will be higher, you will not have the luxury of shopping around. You only have the option of BMO’s posted rates at the time of refinancing, versus the most competitive rates in the industry which are usually 1-2% lower than posted rates.

Ok, so you don’t think that you will have to refinance or switch lenders in 3 – 4 years? Fair enough… This product only allows you to take a 25 year amortization, versus the 30 year amortization that most Canadians take. This substantially lowers your buying and refinancing power.

If you are thinking of refinancing your current mortgage and switching to the BMO product to save money. You are on the right track! What you should be doing is switching to a lower rate, then increasing your payments back to where they were at before the switch. This will allow you to pay off your mortgage years sooner! Only one problem with this plan…. This product has extremely low pre-payment privileges….

The smartest decision you can make, is taking a 4 year product at 2.99%. There are some great 4 year products on the market right now. These products allow 30 year amortizations, 20-25% pre payments privileges, and you are allowed to break out of the mortgage anytime with regular pre-payment penalties.

In today’s economic climate of tighter credit requirements and increased unemployment rates taking their toll on some Canadians, there’s no doubt that many people may not fit into the traditional banks’ financing boxes as easily as they may have just a year or two ago.

Your bank or Mortgage Broker can help you determine whether your situation can be quickly repaired or if you face a longer road to credit recovery. Either way, there are solutions to every problem.

Following are five steps you can use to help attain a speedy credit score boost:

1.       Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit and so on.

2.       Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there is a balance at the end of the month, this affects your score – credit formulas don’t take into account the fact that you may have paid the balance off the next month.

3.       Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders may view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you.

4.       Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and therefore, may not  be as valuable – even though you have had the cards for a long time. You should use these cards periodically and then pay them off.

5.       Don’t let mistakes build up. You should always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation.

If you have some equity built up in your home and still have a manageable credit score, you can often refinance your mortgage and use that money to pay off high-interest credit card debt. By clearing up this debt, you are freeing up more cash flow each month and improving your credit score. In the current lending environment, with interest rates hovering at all-time lows, now may be an ideal time for you to refinance. 

As always, if you have any questions about your credit situation or your mortgage in general, I am here to help!

Important news for those getting new mortgages!

We have been personally informed by telephone conversation that  effective tomorrow at 9 am One of Canada’s  five major banks is increasing their rate on the variable mortgage to .5% off prime from .75% off prime.

We don’t know if other lenders will follow suit but there is a good chance you may see a correction take place across the market sooner than later.

If you are on the fence about refinancing or purchasing and want a variable please do not delay as you may miss out on the current discounts available in the marketplace.

Remember you can switch your mortgage for free by calling me directly 416 889 3916 www.GetMortgagesNow.com

Please note: this will not effect anyone who already has their mortgage approved or already funded.

This letter is directed towards anyone who owns a home, or is looking to buy a home in the next couple of months.

After this Friday the new mortgage rules take effect.

The maximum amortization period (the length of time you have to pay back your mortgage) will be reduced from 35yrs to 30yrs for new mortgages with less than 20% as a down payment.

                – This means that mortgages will be more expensive for first time home buyers who need that extra 5 years to pay off their mortgage. 

 The maximum amount that you can borrow when refinancing will be reduced from 90% to 85% of the value of your home.

If you have any questions, or are interested in taking advantage of some of the lowest rates in history to consolidate high interest credit card debt please contact me ASAP. Due to a high volume of people waiting until the last minute, the earlier in the week you contact me the better.

FIRST TIME HOME BUYERS

Having so many friends that are so close to purchasing their first home, it only makes sense to share with you what is involved in this exciting process.

Hello Everyone,

Did you know effective March 18, 2011

–         The maximum amortization period (the length of time you have to pay back your mortgage) will be reduced from 35yrs to 30yrs for new mortgages with less than 20% as a down payment.

– This means that mortgages will be more expensive for first time home buyers who need that extra 5 years to pay off their mortgage.

–         The maximum amount that applicants can borrow when refinancing will be reduced from 90% to 85% of the value of their home

Now may be the time for you to look at consolidating  your debts or taking out equity for home improvements ie: new kitchen, new bathroom or perhaps roof….

Here is a link from CMHC, should you require any additional information.

http://www.cmhc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Refinance.pdf

If you need any other information, please do not hesitate to let me know.

Have a wonderful day!

As a Mortgage Agent I like to keep everyone informed on changes in the mortgage industry that could affect you.

The situation

Yesterday TD Canada Trust raised their interest rates. This week, other institutional lenders will be following their lead.

The opportunity

ING is one of the leading financial institutions in Canada. They have an offer for you that will avoid this potential interest rate increase. Send me an email with your name and phone number by midnight tonight and ING will agree to hold the 3.99% interest rate for 120 days while you decide if it’s right for you. This is a risk free offer to you that could save you thousands of dollars.

Sean Smith – Mortgage Agent

seansmith@dominionlending.ca

I realized recently, when talking to someone very close to me just how misunderstood my profession was. This friend knew I was a Mortgage Agent, but thought we only worked with people who had bruised credit and had no idea that I represent all the major banks.

As much of my business comes via referrals from my happy loyal clients, I realized how important it was for me to educate my family, friends and social circles of exactly what I do, and when someone might use my services.

Here is some information that may help you understand a little more of how I help my clients:

Who I work with:

I work with Canada’s leading Financial Institutions including Banks, Trust Companies, and Credit Unions. They include Scotia, Toronto Dominion, RBC, National Bank, CIBC, ING, and many others. There is a complete list of all our lending partners on my website at GetMortgagesNow.com

My company, Dominion Lending Centres, sends these lenders more than 10 billion dollars in mortgage volume annually, so these lenders provide us with exceptional rates, fast turnaround times and flexibility with approvals.

When you use me:

When you use me to find you the very best mortgage, and negotiate on your behalf, there is no cost to you. The lender pays me a fee for finding and bringing them the business. Remember it saves them from the cost of additional employees in wages, vacations, training cost, office space and benefits. So, there is no cost to you, and I only earn a fee if I arrange the mortgage for you.  

Some of our lenders specialize in providing mortgages for clients who are self employed, contract employees, have seasonal income, have trouble proving income, or lack some of the standard documentation. We have seen all situations and are experienced in getting the unconventional mortgages approved.

Many consumers think their bank will automatically give them the best rates because they have been loyal customers for many years, have multiple accounts with them or have high account balances. Don’t fall into that trap. That kind of thinking has cost many clients thousands of dollars in unnecessary interest.

I am a fully licensed mortgage agent and am governed by The Financial Services Commission of Ontario (FSCO). The safety and security of your personal information is of utmost importance and all discussions, documentation and file management are completely confidential at all times.

Often clients make the time consuming mistake of going to multiple lenders themselves, attempting to negotiate the best rates. Each time a Financial Institution pulls your credit report, your Beacon score actually drops. Sometimes the very exercise of trying to find the most competitive mortgage actually disqualifies you from qualifying. At Dominion Lending, we forward your credit report electronically to our lenders so that it isn’t pulled over and over.

The interest rates today are the lowest in history. They are a direct result of Emergency pricing from the Canadian Government in a bold attempt to prevent what happened in the USA to Canada. Mark Carney (Bank of Canada’s Governor) and many other Industry Professionals expect rates to begin to increase sometime this year, some believe there will be significant increases.

If you, like so many other Canadians, have high interest credit card debt, department store debt, line of credit debt or other outstanding payments, now might be the ideal time to refinance your existing mortgage and consolidate it all into one simple payment at the lowest rates of all time. This consolidation can sometimes reduce your monthly payments by more than a thousand dollars per month. I would be happy to calculate the saving for your specific situation.

There has never been a better time in history to consolidate debt, refinance your mortgage or purchase investment properties.

In summary, I am your trusted mortgage agent and I work for you, not the banks. It’s my job to provide you with timely, expert advice and make certain my clients have the very best mortgage products for their specific situation. Your business is very important to me!

Contact me for a complete mortgage review at your convenience but remember the lowest rates in history won’t last long.

I am never too busy for your referrals and will take amazing care of anyone you think who may find my services valuable.

Sean Smith:

Mortgage Agent

416 889 3916:

seansmith@dominionlending.ca

GetMortgagesNow.com