Mortgage rates on the rise

Recent bond increases is putting extreme pressure on lenders to raise fixed rates.   If you are shopping for a home, or renewing  a mortgage in the next 120-days and you take fixed rate products, now is a good time to negotiate the mortgage rate.

This blog was written by Elizabeth Blair, a licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880  /   Brokerage Lic # 10680

mortgage plus line of credit – is it for you?

Home owners who have lots of equity in their house, might be looking for ways to get access to that equity without having to re-finance their house, everytime a need arises.

A mortgage with a line of credit portion is a great product for some.   Here are some typical reasons why you might want to get access to your home equity:   buy investments, stocks, or RRSPs, renovate your home, education costs and more.

The diagram below breaks the mortgage into three parts

	20% cannot be financed
	$ 94,000 MAX Line of Credit portion Variable rate **Prime + 1% **2.25% + 1% = 3.25% Line of credit can be increased up to 80% of the value of the home
	Mortgage balance today $ 210,000 Variable rate 5 year term Or Fixed Rate 2, 3, 4, 5, 7, 9 and 10 year terms 5 yr fixed = 3.69% variable = **2.25% + 0.80% 3.05%

The top portion represents the percentage of your home that cannot be financed and that is 20%.   20% of your home value, must remain as firm equity and cannot be financed.    The next portion down, is your line of credit portion.   The line of credit portion can go up to 80% of the value of the home.   The final portion is your actual mortgage loan portion today, that you decide to convert over, when you move into this product.    I took, for example, a home owner who has a current home with a value of $380,000.     This client also has a mortgage balance right now, with a lender, at $210,000.   By moving into the mortgage + line of credit, the current mortgage amount of $210,000 is set up as either a FIXED mortgage rate, or a VARIABLE rate mortgage.   The borrower can then use up to 80% of the home value at anytime.   So using these numbers above, the home owner can borrow up to an additional $94,000 at anytime.

It is important to mention……. this kind of mortgage product requires a very disciplined borrower as reckless spending or improper investing strategies could have a very negative outcome, a higher debt and possibly the inability to re-pay the debt.

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga

and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880

Brokerage Lic # 10680

NOTE:    Mortgage rates are effective as of May 17, 2009.   **The variable rate amount can go up or down depending on current posted Prime Rate.  Mortgage rates are subject to change without notice.

Financing: bank or broker?

Are you still undecided on whether you should deal with a bank or a mortgage broker?  Here is a short summary of what some compelling truths are, around this subject.

A mortgage broker acts as a MEDIATOR or a representative between the borrower and the bank.

Here are some straight-forward questions to consider:

a) what if something goes wrong?

b) who will represent you?

c) will you be able to navigate through escalation channels to get something done?

d) will you be able to successfully negotiate what you want on your own?

e) what if the lender says no?

f) how easy will it be for you to get the deal you want from another bank and on your own?

You may be asking, so how does a broker mediate between the borrower and the bank?

If for example, an office has 50 representatives, who are actively carrying on in the business of dealing in mortgages.  Lets say that each representative has placed 2 million dollars of mortgage business with a particular lender.  The brokerage now has a combined volume of 100 million dollars of business with that particular lender.  Now that kind of business volume will make anyone sit up and pay attention, agree? So essentially the high volume of mortgage business, that a brokerage has, for a lender, will automatically secure some real benefits for the person looking for financing:

1) the lender may now pass along additional mortgage rate discounts to those brokerages who have reached a particular sales volume;

2) a large brokerage will immediately receive dedicated focus and attention from individual lenders, for example, dedicated underwriters.  A dedicated underwriter means that a submitted mortgage deal is reviewed quickly and this is essential to maintain the service level to the demands of a busy brokerage.   For the borrower, this means that a difficult situation can be escalated quickly to senior management and issues can be reviewed and approved that an individual may not easily accomplish on their own.

This blog was written by Elizabeth Blair, a licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients primarily in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office::   15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.