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Many Canadian homeowners pay too much for their homes because they are not getting the best mortgage financing available in the market.
The mortgage process can be intimidating for homeowners, and some financial institutions don't make the process any easier.
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I save you money by sourcing the best products at the best rates – not only on your first mortgage but through every subsequent renewal. So whether you're buying a home, renewing your mortgage, refinancing, renovating, investing, or consolidating your debts — I’m the VERICO Mortgage Advisor who can help you get the right financing, from the right lender, at the right rate.
Greta article by Robert Mclister about early mortgage renewal.
A rate in the hand is worth two in the bush.Many mortgage lenders want you to believe that rate certainty is worth paying a premium for. It is the justification, they say, for staying with them and renewing your mortgage early.Early renewal features typically let you lock in a new rate two to four months ahead of when your mortgage is due to mature. Some lenders, like Bank of Nova Scotia, even let you renew up to six months in advance.he question is, do early renewals save or cost home owners money?“Unless the consumer believes that interest rates are going to move up significantly prior to their ability to lock in, I fail to see a reason to do an early renewal with their existing lender,” says mortgage broker Calum Ross.By locking in earlier, you minimize risk of adverse rate movements. But in return, you pay a premium to the best available rates, and you’ll lose all benefit if rates drop before your term is up.Not surprisingly, Canada’s big lenders are advocates of renewing your mortgage in advance. “We think it’s a good idea to have some room to manoeuvre [when locking in a renewal rate],” says David Stafford, Scotiabank’s managing director of real estate secured lending. Having more time to make a decision is especially important if you plan to renew with your current lender, as more than 90 per cent of customers do at Scotiabank.Of course, the benefit of renewing early depends largely on the rate you’re offered. Right now, for example, you can find fully featured five-year fixed rates at 3.29 per cent or less. If your lender is letting you lock in 90 days early for 3.39 per cent – a mere 10 basis point premium – that’s worth considering (assuming a five-year fixed is the right term for you). This seems especially relevant today, given that fixed rates may climb if the U.S. Federal Reserve slows its bond buying (i.e. “tapers” its economic stimulus program).On the other hand, if your lender were pitching a “one-time-only” opportunity to renew early at 3.59 per cent or more, that warrants more skepticism. A 0.30-percentage-point rate difference would tack on $3,500 of extra interest on a $250,000 five-year term. (Note: This 3.59-per-cent rate is an actual early renewal “special” currently being offered by at least one major bank.)I use 0.30 of a percentage point in my example on purpose: That’s roughly how high today’s best fixed rates can increase until they’re equal to a good early renewal rate.But it’s not that often that rates jump 0.30 of a percentage point in 90 days. Since the 1950s, fixed rates have risen 0.30 of a percentage point over a three-month span only 21 per cent of the time. Mind you, we experienced one such case last May to July when rates soared three-quarters of a percentage point.Either way, if lenders can get you to commit early, they will. By law, banks have to send you a renewal notice at least 21 days before the end of your existing term. But they’ll often contact you well in advance of that, which reduces the odds of you shopping around.Positioning early renewals as a “convenience” or risk mitigator is a strategy that frequently pays off for lenders. According to the Canadian Association of Accredited Mortgage Professionals, almost four out of 10 people who renew with the same lender do so at the original rate proposed by that lender. In other words, they don’t negotiate.To minimize rate risk, fixed-rate borrowers should seek at least a 90- to 120-day rate hold, either at their existing lender or elsewhere. If your current lender offers to hold a decent rate for you (without making you commit right then), that’s a “no brainer,” Mr. Ross says. Having a rate hold in your back pocket limits rate risk if you choose to wait until 30 days from maturity to renew. The market’s best rates are often 30-day “quick closes.”“It is clear to me that consumers don’t do a good job at managing this part of their personal finances,” Mr. Ross adds, and that’s certainly true. If you want a great deal on yournext mortgage renewal, one that could potentially save you thousands, rememberthat your lender's first offer is seldom the best offer.Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at VERICO intelliMortgage, a mortgage brokerage. You can also follow him on Twitter at @CdnMortgageNews
Top five home renovations that increase property value
Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment 5-6x what they cost.
Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.
Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your homes value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.
Thebathroomis the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a 3-piece bathroom under a staircase the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.
Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh anddesirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.
#1 An Income Suite
No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting yourbasement into a rental, or another floor in the home, an income property will increase your homes worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive which creates real wealth that can supplement your income.