Are you an orphaned mortgage holder?

Do you have a mortgage that’s coming up for renewal and the mortgage broker that you originally arranged your mortgage through is no longer in business?

The Mortgage Centre can adopt you!

At The Mortgage Centre, we love brokering a mortgage, but it’s a tough business. That’s because it’s purely commissioned based. In the majority of cases, mortgage brokers don’t charge their clients a fee – they get paid a small commission based on the financial institution the borrower chooses. Only in a few cases do mortgage brokers charge a fee. Such as, if the borrower is considered a higher credit risk because of weak credit or job instability. So, many mortgage brokers can’t make a living because of the commissioned-based business.

Whenever your mortgage comes up for renewal, people who use mortgage brokers know it’s time for their broker to help them get another great mortgage. The value-added service and advice that brokers bring to their clients is that they help negotiate a new mortgage (possibly at another institution that has a more-competitive rate), normally at no cost.

If you find that you need to make adjustments to your mortgage, such as changing the amortization, mortgage amount, or you’re just moving to another house – a mortgage broker can help you with that too. 

We work with most chartered banks and wholesale mortgage lenders and can access just about any mortgage lender in Canada.

If you currently have a mortgage with a bank, and are looking for a second opinion – most mortgage brokers will set aside time to help you shop the mortgage market to get a better rate. We’ve found that normally upon mortgage renewals, financial institutions may not offer a competitive rate.

Keep in mind there’s more to a mortgage that just a rate. Often times the lowest mortgage rate means that you need to sacrifice pre-payment options, or pay hefty penalties should you need to make adjustments to the mortgage in the future. Mortgage brokers will help you identify the best mortgage out there that fits your financial needs and balances rates and features.

I'd love to hear how you make your own decisions on choosing a mortgage. Please e-mail me at lastovic.s@mortgagecentre.com or offer your comments. If you're on twitter follow me @Sandra_lastovic.

It's been a while...what's up?

It's been a while since I've posted on the blog...what's up? Well, there's been a change in the ownership of my business, and it's good news for our clients and business partners.

I'm working in partnership with Chris Bisson, one of the top mortgage brokers with The Mortgage Centre network in Canada. We've teamed up because he's great at helping our referral partners (such as realtors, accountants, financial planners and lawyers) with their own businesses. And I love helping our clients get the best advice and rates around mortgages to help them be financially successful. The really cool thing is that Chris and are spouses...we've been married for over 17 years, but we worked independently! I know it was a little "weird".

We're really different at The Mortgage Centre (Guelph). With the decades of experience, and helping thousands of clients we have the knowledge that most mortgage bankers and other brokers don't have. I know that sounds "canned", but just give us a call to find out.

We're here to help (and we're not the bank!) Tel 519-763-3900519-763-3900 - you can reach me directly at ext. 1001 or via e-mail at lastovic.s@mortgagecentre.com

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The hazards of waiting to buy your first home

Buy now or wait – the hazards of market timing and waiting to buy your first house

	Base Scenario	Scenario 1: Home prices stay the same Interest rates increase by 0.75%	Scenario 2: Home prices increase by 4% Interest rates increase by 0.75%	Scenario 3: Home prices decrease by 2% Interest rates increase by 0.5%
Home Price	$280,000	$280,000	$291,200	$274,400
Down payment	$14,000	$14,000	$14,560	$13720
Interest Rate	Current rate 3.5%	4.25%	4.25%	4.0%
Monthly Mortgage Payment	$1365	$1475	$1534	$1408

One of the most common questions I get is, “Should I wait to buy a home until I have more money saved?”

I think that good job stability and credit history are almost more important that having a significant down payment on a house. Job stability will give you the financial means to pay for the home expenses. Mortgage lenders are now conservative to whom they lend to. A good credit history is mandatory if you’re putting less than 20% as a down payment on your first house. And your credit history proves you can pay your financial obligations on time.

A home purchase is likely the largest financial purchase you will make in your life. As a mortgage professional, I’m programmed to take the financial approach. I’ve included a table to help explain why it makes sense for first-time home buyers to purchase now, rather than wait another year for a greater down payment.

Here’s the rational on buying a house now versus waiting a year for a greater down payment.

Most first-time homebuyers can purchase a decent condo or home for the price of $280,000. With $14,000 as a down payment (5%) the monthly mortgage payment will be approximately $1365.

Home prices are slated to go up in the next year. The average price increase over the last 40 years has been approximately 6% in Guelph. However, I’ll be conservative and estimate that home prices will increase by 4% in the next year. Assuming that mortgage rates increase by 0.75% in the year, the same house that you can buy today for $280,000 will be worth $291,200. This same purchase in the future will require another $560 more as a 5% down payment. The monthly mortgage payment will now be $1408 per month, because of the increase in mortgage rates for the future. In a year, the same house will cost $43 more per month in payments and an extra $560 more in a down payment.

In order to circumvent this issue, the borrower would need to put 10% as a down payment to get a similar mortgage payment. They will need to save an additional $15,100 more in a year, or about $1260 more per month over 12 months.

If you don’t have the 5% as a down payment, some good mortgage lenders are still offering mortgages with no-down payments.

Waiting another year to buy your first home can be costly. If you have good credit and job stability, be proactive with your financial future and purchase a home. More and more individuals are buying homes as single people too!

Please contact me if you have any questions about buying your first home. I can be reached at 519-763-3900 ext. 1001 or via e-mail at lastovic.s@mortgagecentre.com.

What does it mean when RBC lowers it's fixed-rate mortgages?

Driving to work today, I listened to CBC radio announce that RBC has, "quietly" reduced rates on it's fixed-rate mortgages. I listened with a smugness, since most wholesale mortgage lenders in Canada, had already lowered their rates. Those following the Canadian bond market have noticed a trend of lower yields, which directly impact fixed rate mortgages (see the chart below...thanks to the Bank of Canada for this information).

For consumers, it means that the bank's posted rates are decreasing by 0.10%, but when negotiating a mortgage rate directly with a bank, it's difficult to determine the lowest rate.  That's were we can help. As mortgage brokers we work to negotiate the best rates for you, in conjunction with the best features.

On a side-note, if you want to accelerate paying-off your mortgage in the next three years, you'll likely want to choose a variable-rate mortgage. Then you don't have to worry about what's happening in the bond market.

Please contact me directly at lastovic.s@mortgagecentre.com if you need help negotiating a better mortgage rate.

Government of Canada benchmark bond yields - 5 year

GRAPH PERIOD: 17 January 2013 - 17 January 2014

Date	Yield
2014-01-17	1.69
2014-01-16	1.71
2014-01-15	1.76
2014-01-14	1.76
2014-01-13	1.72