No 2 Mortgages are Exactly the Same…
Whether you are a First Time Home Buyer or a Seasoned Veteran, going through a Mortgage Renewal or Refinance, it helps to have a number of Mortgage Solutions at your fingertips. This will allow you to choose the Best Product and Rate to come to your Unique “Out of the Box” Solution. I have access to a variety of mortgage products and solutions to fit any mortgage need.
FIXED RATE MORTGAGE
Fixed Rate describes an interest rate which will not change over the term of the mortgage. This will result in regular payments even if interest rates changes. This is a good option when interest rates are low and are expected to rise in the near future. It also gives a first time homeowner time to adjust to any change in budget that making mortgage payments may have caused.
VARIABLE RATE MORTGAGE
Variable, means that the interest rate being charged is charging based on the interest rate set out by the Bank of Canada. This rate fluctuates based on market conditions. Your payments will, with few exceptions, continue to stay the same however the amount you are paying will be distributed to the interest and principal in different amounts. If interest rates rise you will be paying off less of the original borrowed sum as more of your payment goes to interest. The opposite being true should interest rates drop. If you have a fair bit of flexibility in your budget, this may be a good option as variable rates over the life of your mortgage often result in lower interest charged.
Adjustable, as with the variable option above, interest rates will change with market conditions, however any change in interest rate will result in an increase or decrease in payment. This option should be considered with great care as an increase in rates could result in payments outside your budgetary limits.
As a mortgage professional I can help you decide which option is best for you by talking to you about current market conditions and expectations on future rate changes, as well as the risk you are willing to assume within your personal budget.
FIXED or VARIABLE...WHICH IS BETTER?
Currently for 2012 and 2013 more clients are opting for the Fixed Rate option & that would mostly be due to the fact that interest rates are still pretty low. More than 78% of the First Time Buyers are opting for the security provided by the current fixed rates. However for the variable rates, more seasoned mortgage holders are still taking this route.
In my opinion it depends on comfort level. Are you a budget oriented individual? Or pay cheque to pay cheque type budget? If the answer to either of those questions is YES, I would suggest the Fixed rate mortgage. If you are more attuned to risk, and potentially lower payments, than Variable may be the way to go for you.
There are pros and cons with either option but good news! I have access to both and can explain all the pros and cons to you. We can figure out together which is the best option for you and your mortgage future.
OPEN or CLOSED... WHICH ONE IS RIGHT FOR YOU?
Open Mortgage, describes the opinion to prepay without penalty allowing a borrower to make large lump sum payments or pay off the entire mortgage without incurring extra fees. This option generally comes with higher interest rates and shorter terms. This is a good option if you plan on selling your home soon, or need a short period of time to weigh your options before locking into a closed mortgage. Open also describes a HELOC, which is another type of mortgage option.
Closed Mortgage, may set a limit on the amount of frequency at which lump sum payments are allowed. Should you choose to pay off your mortgage before the end of term you will most likely be charged a penalty. As such they are not a good option if you plan on moving in the near future. However in this case you would want to check your portability options and your pre payment options. They do however involve fixed payments allowing a homeowner to adjust to a new budget that now includes regular payments. Also, terms are normally set for longer periods allowing for greater certainty when planning for the future.
NEW TO CANADA PROGRAM
HELOC (Home Equity Line of Credit)
This product acts like a loan against your home and can be used for any number of reasons. A HELOC is often revolving and interest is charged on the amount you are using. Most of the time payments are calculated using minimum interest only payments, but can be customized into larger payments if you wish, which would in turn help pay it down faster. The benefit with this product, is as you pay it down it opens up available funds – so you can continually pay it down and re draw out funds within the approved limits.
3-year Personal Loans.
A monthly payment that will never increase.
No early repayment penalties. No money down.
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“Ariana has been a huge help in securing funding for our new home. She found us a great product at a terrific rate, and she was always available to answer our questions. When it comes to service, Ariana goes above and beyond, and she is definitely someone you want supporting you through the home buying process. Thank you for all your hard work, Ariana!”
K & S Mulligan