|
First Rate
E-Newsletter for July 2009
Dear
John,
If you are a homeowner, potential homeowner
or a real estate investor, you know that your mortgage is the single
largest expense you'll ever have. Keeping abreast of interest
trends, mortgage innovations and credit strategies will help lower
your mortgage costs and possibly build wealth for you and your
family.
I have a unique approach to
the mortgage business and that is, to provide my customers with the
most comprehensive information and options available so they can
make the best mortgage and home buying decision. I don't use
any slick sales techniques or negotiation strategies. It's all
about providing the right information and letting you make the
decision- My job is done when you know your
options.
Announcements:
We are moving! On August
1, we will be at our new location at 205 - 7545 Cambie Street,
Vancouver, V6P 3H6. This is just a few blocks east of our
current location. This is a larger space, more accessible and
has ample parking.
In this
issue:
- Market commentary & interest
rate trends
- Should You Work With A Mortgage
Broker or Get Your Mortgage on Your Own?
- Monthly Review of Interest Rate
Forecasts from the Major Banks
- A Mortgage Pre-Approval – A
Smart First Step When Looking for a Home
Market commentary & Interest
rate trends
After that unexpected increase in
fixed rates last month, it looks like fixed rates have
stabilized. There is now a 1.80% difference between the 5 year
fixed rate and the best variable of 2.65% (e.g. prime +
0.40%). This makes the decision of whether to take a fixed
rate or a variable rate a little bit more
difficult.
As one who likes to save money, I
personally would favor the variable rate. While it is true
that rates could rise by 2% or maybe 3%, this is still down the
road. In the meantime, I would be saving money on my
mortgage. Even if rates steadily rose by 4% over the next 5
years, the average increase would only be 2% (half or 4%). I would
still be breaking even on a variable rate
mortgage.
There are also some other options
such as the 50-50 Fixed variable rate mortgages offered by Merix and
Vantage Mortgage. With this product, you lock in half of your
mortgage and keep the other half on a variable rate.
A third strategy is to take a
short-term low rate mortgage such as Merix's 18 month term at
2.75%. At the end of the term, you could switch to a variable
rate. In this case, you're banking on the possibility that the
liquidity crunch has eased and the variable rates spreads are
lower.
Rates and
Charts
Prime @
2.25% (next announcement on July 21, 2009)
-
|
Term |
May
22
|
May
29
|
Jun
5
|
Jun
12
|
Jun
19
|
Jun
26
|
Today |
|
3 year
|
3.15% |
3.15%
|
3.15%
|
3.65% |
3.65% |
3.65% |
3.65% |
|
5
year |
3.89%
|
3.79% |
4.09% |
4.49% |
4.49% |
4.49% |
4.49% |
|
10
year |
5.25% |
5.25%
|
5.45% |
5.45%
|
5.45% |
5.45% |
5.45% |
-
Table shows
the discounted residential mortgage rates for 3, 5 and 10 yr
closed fixed rate mortgages (these are standard rates - i.e., what
most lenders are offering for prime
clients)
For a longer term view, click
here to see the 3, 5 & 10 year best residential
rate since September 2003 (updated
monthly)
-
Click to view other
relevant graphs
-
-
-
-
Should You Work With A Mortgage
Broker or Get Your Mortgage on Your
Own?
Shopping for a mortgage can be
stressful and time consuming. There’s no cost to using a
mortgage broker and we can often get better rates. Yet many
home buyers choose to the Do-it-Yourself (DIY) approach as opposed
to using a mortgage broker.
Here are some other reasons why
you should work with a mortgage broker as opposed to going doing it
yourself:. Click here to read more.
Monthly Review of Interest Rate
Forecasts from the Major Banks
Despite the rapid run-up in the 5
year mortgage rate during the past 2 weeks, the major banks are
predicting relatively stable rates for the next 18 months. TD,
RBC, CIBC and BMO are predicting the prime to stay where it is until
the 3rd Quarter of 2010. These banks also predicted that
Canada bond rates will rise between 1/4% to 0.88% between now and
the 3rd Quarter of 2010. Fixed rate mortgages normally follow
rates for Canada bonds. Click
here to read more.
A Mortgage Pre-Approval – A Smart
First Step When Looking for a Home
Even with interest rates touching
historic lows, getting a pre-approval for mortgage financing before
you start to look for a home is a smart move. Click here to learn why you need to get pre-approved
before searching for a home.
Are you working with a
professional?
What exactly is a professional?
Here's my definition:
1) An expert in his field
2) Responds quickly to all emails and
phone calls
3) A person with the highest level
of integrity - Will only recommend products and services that
are in your best interest. If I do not have the right product
for you, I will point you in the right direction.
4) No pressure, hype or mind games -
only honest advice.
Relevant
Links
REFERRALS
ALWAYS WELCOME....
The highest compliment I
can receive is a referral to a friend...Thank
you!
|
CONTACT
INFO:
Tel
(604) 506-0397
| |
