The greatest feat the mortgage industry ever achieved was making the Canadian public think that the 30-year fixed mortgage is the best option for every person needing a mortgage loan. Today, Canada, you’ll learn the truth…
With mortgage rates at bargain basement prices, you might be thinking that now is a good time to refinance your mortgage loan. If that’s the case, here are a few other things to be thinking about before you move forward with that decision…
How long do you plan on living in the home?
While the low interest rates may seem like tempting, got-to-act-now opportunities that you cannot miss, resist the urge to refinance until you’ve thought through your plans for the future. If you plan on living in the same home for years to come, then refinancing may be an option worth considering. However, if you believe that you will move from the home within a couple years, refinancing your mortgage may or may not be a good idea; typically, for that amount of time, costs outweigh the benefits but there are always exceptions. Therefore, it’s a gamble.
“To lock in a mortgage rate or not?” That is the often the question may mortgage seekers have…but so are when, why and how! That’s a lot of questions. Fortunately, we’ve got answers.
What is a mortgage rate lock-in?
Just like the name suggests, a mortgage rate lock-in allows you to keep whatever mortgage rate you’re presently being offered, regardless of changes in mortgage rates or the type of mortgage loan you hope to obtain. Mortgage rate lock-ins are usually valid for 30 to 60 days. However, some mortgage lenders and brokers add stipulations for mortgage rate lock-ins such as “the mortgage rate lock-in is valid for up to x days after being approved for a mortgage loan.”
Traditional selling, short selling, and mortgage loan modification. If you’re struggling with your mortgage and none of those tactics have worked, there is one more option to try rather than allowing a mortgage lender to foreclose on you. That option: Deed-in-lieu of foreclosure. “Deed-in-lieu,” as it’s more commonly called, is similar to foreclosure in that, in the end, you will still lose your home. However, for many homeowners, deed-in-lieu is a less abrasive process; the difference is that with foreclosure, homeowners often feel that their home is being taken whereas with deed-in-lieu, they feel they’re giving their home back to the mortgage lender on their terms. Here’s a deeper look at this foreclosure alternative…
It used to be that your credit score and your debt-to-income ratio were the key factors that determined your worthiness for a mortgage loan and the mortgage rate for which you could qualify. That, however, was before the mortgage and overall financial industry meltdown began. Today, some lenders are looking well beyond credit history and debt-to-credit ratio to determine whether mortgage seekers can qualify for a loan. Here’s a look at some of the not-so-talked-about factors that may be affecting or may soon affect your ability to qualify for a mortgage…
The best rumors have the longest staying power, and the untruths about the connection between Bank of Canada interest rate cuts and mortgage rates is a prime example. Why? Well, though Bank of Canada interest rate cuts do affect the financial industry, they do not affect every segment of the financial sector; some segments are directly affected, others are only indirectly effected, and then there are segments that are directly or indirectly effected depending on the financial product. The mortgage industry falls into that third category.
Fair Isaac Corporation’s (FICO®) newest risk assessment tool will be shedding more light on your credit history, and that could make qualifying for a mortgage even more challenging. The new tool, which is called BEACON® Mortgage Score, is designed specifically for mortgage lenders and is expected to be the most robust and accurate tool for measuring mortgage risk and financial management / responsibility. Sounds impressive, doesn’t it? It is, if you’re a mortgage lender. However, if you’re a current homeowner looking to modify your mortgage or if you’re a homebuyer in the market for a home and need to qualify for a mortgage loan, BEWARE! The BEACON score makeover means you’ll need to make changes in how you handle your financial obligations in order to qualify for a mortgage product you desire.
“Hogwash!” That’s what you should scream out in your mind if you ever come across a mortgage broker who tells you a lender will only offer you a larger mortgage loan is if you make a bigger mortgage loan down payment or improve your credit score. While both tactics will certainly encourage a mortgage lender to reduce your mortgage interest rate, neither tactic is truly effective in helping you to secure a mortgage loan greater than what you’ve been offered. However, if your dream home is just slightly out of reach, there is one way that may result in a lender granting you some additional credit: A green mortgage.
The old adage of “bigger is better” is completely passé now. If you want to be on the forefront of what’s hot in today’s world, don’t think big; think small! It’s all the rage in nearly every industry—mobile phones, music players, fashion (mini skirts and slim jeans!), and cars. And guess what? That trend is also big in real estate. While it used to be empty-nesters and retirees who were most likely to downsize their home, more and more growing families are joining the “smaller is better” revolution when it comes to their choice of home. Why? They want a better quality of life now, while they’re young enough to enjoy it.
What’s the best type of home for someone living on a budget? An affordable home, of course! In today’s economy, the most affordable home are usually foreclosures. That’s because foreclosure homes can be purchased well below market value, which automatically makes a foreclosure a good opportunity. How so? Well, in an economy in which housing prices are falling, homebuyers who purchase foreclosures have the opportunity for a win-win situation if they make a smart buy; the home can lose value and the homeowner, because they purchased the home significantly below market value, still has the potential to post significant profits on the purchase.
Owning a home is a huge responsibility overall, but the biggest single homeowner responsibility is managing the mortgage payment. Mismanage your mortgage and you could risk not being a homeowner anymore. (Yikes!) That’s why it’s so important that you avoid the following mistakes when choosing a mortgage:
“How many billion?” That’s what millions of Americans were saying last fall when they first learned about Congress’ proposed $750 billion bailout package. Boy did that cause a big hoopla over! Some Americans agreed with the notion and need for the $750 billion financial industry bailout package while others despised it. In the end, Congress passed the bailout. While the major companies that received a portion of the bailout money to stay afloat saw some immediate benefits of the bailout, it wasn’t until January that the average American—homebuyers, in particular—began to see the trickle-down benefits.
If you’re planning on buying a home, and are like most Canadians, you probably will fall shy of the 20% down payment to obtain a conventional loan. Therefore, you’ll need private mortgage insurance (PMI). Now, some of you may look at “private mortgage insurance” and think that’s a good thing, but it’s not; at least, not for you. Why? Well, when you hear the word “insurance,” you probably think of something that you pay for and that protects you. However, when it comes to private mortgage insurance (PMI), that thought is only partially correct; as a homebuyer with a non-conventional mortgage, you will need to pay private mortgage insurance but the PMI but the insurance is not for your benefit; it’s for the benefit (and protection) of your mortgage lender. Do not misunderstand. PMI does have its merits but if you can avoid paying PMI, try. Here are the three top reasons why:
Vogue never wrote about it. However, I still say that refinancing mortgages was a hugely hot fad in early part of the century when the real estate industry was booming. Why? Well, Canadians discovered that if they had equity in their home, they could refinance their mortgage for more than they actually owed and actually get cash out that they could use for…whatever. For instance, some people refinanced to pay off debt while others cash outs from their refinance to take vacations or make investments; whether those people were right or misguided in doing so during the real estate boom is hard to judge. However, there’s no question that in today’s economy, seeking to refinance a mortgage for those reasons would be foolish, to put it politely. Therefore, if you’re currently thinking about refinancing your mortgage, make sure that you’re doing it for the right reason.
Like any other major financial decision, homebuyers are often looking for ways to make the most cost-efficient deal; when it comes to owning a home, that often boils down to getting the lowest mortgage rate possible. While having an excellent credit score is ideal for setting the tone for that low mortgage rate, it’s really one of two things that can dictate what the final mortgage payments will be: the mortgage down payment the buyer makes or the mortgage rate points the buyer purchases.
Millionaires excluded, if you live in the US or Canada and you want to own a home, you’re going to need a mortgage; and if you’re going to take on a mortgage payment, you should make sure that your mortgage rate is as low as possible! Sounds sensible, right? Well, here’s what you need to know to do just that…
There are wonderfully tempting mortgage rates advertised daily on TV, over the Internet, in the newspaper and through the radio. But guess what? What you see and / or hear will not necessarily be what you get. Why not? Well, as with most things in life, mortgage rate offers always come with a catch. The catch in the case of mortgage rates: your credit rating.
The name sounds posh, but don’t let the spiffy name trick you. Private mortgage insurance works a bit differently than other forms of insurance like health or life insurance. To understand how it’s different, you first have to understand what it is. Investopedia.com defines private mortgage insurance, which is sometimes abbreviated as PMI, as “A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults.” Yes, you read that correctly; private mortgage insurance is insurance coverage for your mortgage loan provider on which you pay the premium. That’s the first difference.
Most homebuyers decide they want to be a homeowner and then go straight to see a mortgage consultant. That’s a mistake. If you’re interested in buying a home, you should “consult yourself” before you ever contact a mortgage consultant. When consulting yourself, the first action should be to assess your financial situation. Consider all of your monthly and annual expenses—household, education-related, child / spouse support, etc. Once you’ve tallied that, move on to calculating your monthly and annual income—salary, payments from investments, annuity awards, etc. Note savings and retirement investments but do not calculate them into your income tally. Keep in mind that this is not the time to sugarcoat things. The more realistic and honest you are in assessing your finances, the more you’ll understand precisely how much wiggle room you have in your budget. That will help you to determine the maximum mortgage payment you will be able to afford.
When you sit down with a mortgage loan officer to talk about mortgage loan rates, be ready to ask questions. Ask anything that comes to mind but before you leave, ask about mortgage rate points. If you don’t, it could cost you significantly in the long run.
What happens when something that’s thought to be conventional doesn’t work for the masses anymore? The unconventional becomes the standard, of course! And that’s precisely what has happened in the North American real estate industry over the last decade or so.
Being a homeowner is a huge undertaking. As a homeowner, you’re responsible for mortgage payments, property taxes, maintenance on the home, and the exterior upkeep as well. They’re all major responsibilities but the one responsibility that’s the most important, and that will affect your ability to handle the responsibilities listed above, is selecting an affordable mortgage loan; the key to that is know what your financing options are and how to use those options to your advantage. Three steps is all it takes.
In the current mortgage environment it is difficult for anyone to imagine where mortgage rates are going. Larger lenders are currently reflecting a drop in mortgage rates; however it is impossible to imagine where they will be in a year’s time. For example, in November of 2007 the mortgage index was 6.34%; however, a year later in 2008 it was 6.2 %. That was for the 30 year fixed rate. However, the 15 year fixed rate fell to 6.21% and the benchmark 5/1 fell 21 basis points and is at 6.46%.
Home mortgage rates are at record lows; however it is quite likely they will be going up soon due to the current mortgage environment. Because of the subprime mortgage crisis the entire financial system across the globe has been impacted. In fact, the crisis has resulted in many failures of huge companies including government sponsored entities as well as mortgage companies and investment firms not to mention tens of thousands of foreclosures. The crisis has escalated over 2007 and 2008; however it began several years ago quite slowly. This financial crisis has not only affected current home mortgage rates, but will surely change the face of lending forever.
Let’s clear the air: Adjustable rate mortgages are not bad. Yes, they’ve gotten a “bad rap” over the last year because people tend to associate adjustable rate mortgages with recent housing woes plaguing the nation but the loans are not the cause of the nation’s real estate crisis; misunderstanding and misusing them is. The reality is that adjustable rate mortgages can, in fact, be an excellent mortgage loan option IF you fully understand how they work. So, with that said, it’s time to learn.
In today’s economy, the word “credit” is often thought of as a foul word. Many believe that using too much credit is a large reason why Canada’s economy—and the world economy in general—has taken a dive over the past few months. While excessive and improper use of credit isn’t good, having credit isn’t bad either. Case in point: Real estate.
Want to be a homeowner? If so, there’s absolutely no reason why you can’t. All across Canada, banks are offering a variety of mortgage loans and it’s certain that there is a Canada mortgage loan that is your perfect fit. Here’s a look at some of the type of mortgage loans that Canadian lenders offer:
Just like many things in this world, not all mortgage loans are created equal. In fact, there are numerous loan offers that you might find scouring the Internet or by visiting with multiple Canada mortgage loan consultants. The question is: How do you determine which Canada mortgage loans are great mortgages. Well, as the saying goes, great things come in threes…or in this case, in three steps.
Mortgage rates throughout Canada have spiked over the over the past few months; it’s a sign of the times but that doesn’t mean that you have to scrap your game plan if you were planning to buy a home in Canada. A little refining of your “road to homeownership” plan might be in order though.
Those considering buying a home are always interested in interest rates because this will affect the total price of the home and the monthly mortgage payment. Mortgage rates change quite frequently, going up and down on a regular basis. Homebuyers should follow mortgage rates and buy when mortgage rates are down. It’s difficult to understand what affects mortgage rates and why they fluctuate. Nevertheless, it is important to have a good understanding of mortgage rate basics.
Lenders use a number of criteria to determine which mortgage loan that you qualify for: credit, income, debt-to-income ratio, etc. The thing is, once the lender tells you what types of mortgage loans you’re eligible to receive, you still need to know which type is best for you! It would take a near eternity to discuss all of the possible mortgage loan type combinations so here’s what you need to know to cut your mortgage loan options in half without having to toil over a single offer…
Despite the myriad of fear-instilling headlines in all the major papers, the Ontario real estate market is NOT on the verge of collapse, or disarray, or whatever the latest misleading headline is touting; the troubles within the industry are actually only applicable to those who sell real estate products and whether they’re making as much money as they were a few years ago. The reality is, they’re not; the slowing world economy and Canada’s weather have taken a toll on sellers in Ontario and parts of the nation. But here’s another reality: the Ontario sellers’ hardship is the would-be Ontario buyers’ golden opportunity, and that’s the story that isn’t making headlines in the papers so here is the inside scoop…
It’s a buyer’s real estate market in Ontario right now, especially in Toronto! So, if you’ve been planning to buy a home, put your plan into action. To do that, all you’ll really need to do is to make an appointment with a Toronto mortgage consultant. However, it’s a good idea to have a basic understanding of how Toronto mortgages work first. So, here’s a quick overview of what you should know before setting up a meeting…
Buying a home is an adventure that some people wait their entire life to experience so it’s no surprise that some people get carried away when they begin house hunting. They go out and find a mortgage lender to pre-approve them for a certain loan amount and then hit the road looking for the perfect new place to live. The trouble with that is that homebuyers often get approved for a mortgage loan without considering whether they can actually afford to buy a home.
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