Welcome to the personal VERICO Website of Vince Salvino, Mortgage Broker with VERICO The Financial Forum Ltd. Please browse around and contact me to get started or with any questions you may have.
Use my years of experience to make your mortgage process stress free. I am available at any time convenient to you and simplify the entire process to you. It is my belief that each client presents a unique challenge, has unique needs and therefore requires a unique approach. I will discuss your needs and goals at the beginning and find not only a solution, but a process that works for you. Of course, I welcome and appreciate any referrals! Enjoy.
Is a Re-Finance Worth it For You? See Here.
How to Check if Re-Financing Today Will Save or Cost You Money
Depending on your current interest rate, you may be thinking of looking into a re-finance to take advantage of todays low rates. Of course, as you probably know it isnt just as easy as switching your mortgage out for a lower rate, there are several costs and factors you need to consider. Things such as penalty to break your mortgage and closing costs on a new mortgage are all determining factors in the decision to re-finance or not. Were going to show you how to break down the costs and make an educated decision. Of course, the below is only to give you a guideline and although fairly accurate, should not be used as a quote or promise of any kind. (Seems obvious but we have to write that, youd be surprised). Now that the legal mumbo-jumbo is out of the way, heres what you do:
Determine what your penalty is. Unless your mortgage is open, then there will be a penalty to pay it off early. If your mortgage is a variable rate, then you will be paying 3 months interest only which is a simple calculation.
Mortgage Balance x Interest Rate = A
A 12 = B
B x 3 = 3 months interest penalty.
$300,000 balance at 2.30% (300k x 2.30% = $6,900. $6,900 12 = $575 x 3 months = $1,725
If you are on a fixed rate then your penalty will be the greater of three months interest (above) or Interest Rate Differential (IRD). IRD is where the lender takes your current rate and puts it against the rate being offered for the term that most closely matches the time remaining on your mortgage term. So if you have 2 years left on your mortgage, they would use the 2 year term. The math for this is slightly more complicated.
Current Rate Reinvestment Rate = A
Mortgage Balance x A = B
B 365 x Number of days left to maturity = IRD Penalty.
Lets see an example using a mortgage balance of $300,000 with an interest rate of 3.19% with 2 years left on the term and a current 2 year rate of 2.29%. Remember, these numbers are for example purposes only.
Ex. 3.19% 2.29% = 0.90%. $300,000 x 0.90% = $2,700 365 x 730 = $5,399.81 IRD penalty
You can also take into consideration your pre-payment privileges on the balance.
So now that you are able to calculate your penalty all on your own, lets move to step two
Get an estimate of any closing costs you are likely to incur. For this example we will use the IRD results from above and assume our mortgage balance is $300,000 at 3.19%, we will also estimate the following:
Appraisal cost: $350
Legal Fees: $1,500
Penalty using IRD method: $5,399.81
Now that you know what it will cost you to break your mortgage and close a new one, its time to determine your potential savings on a new mortgage. Again, we will assume our balance is $300,000 with our current interest rate at 3.19% and our potential new rate being 2.64%.
Over the last two years remaining on your term, you would be paying roughly $16,500 of interest at the 3.19%
and on the first two years of your new mortgage at 2.64% you would be paying about $14,500 of interest, a savings of around $2,000. Or you can look at your existing payments of $1,449.14/month vs your new payments of $1,364.90 a savings of $84.24/month. Over two years $2,021.76. This of course does not outweigh the cost of breaking the mortgage and would therefore be better to wait until your penalty is lower. In the case where you are paying three months interest, then it would be worth it to re-finance.
Keep in mind you should always double check with your mortgage broker to be sure what the penalty is. In a lot of cases, they may be able to get you a discount on the penalty or help you avoid legal fees and appraisals costs. If you are thinking about re-financing to get your rate lowered, check in with us and well let you know where you stand. Hope this helps you understand your mortgage a little better.
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Ontario just introduced a 16-point plan to control real estate, including a Foreign Home Buyer Tax
On April 20, 2017, the Ontario government introduced the Ontarios Fair Housing Plan, a 16-point plan to control real estate, address thedemand for housing, increase supply, and protect buyers and renters.
The 16 measures in the plan include a legislation that would implement a new 15 % Non-Resident Speculation Tax (NRST), similar to the 15 % tax on foreign buyers already introduced in Vancouver last May.
Once legislation passes, the tax would be effective retroactively to April 21.
The measures are aimed at cooling down the hot housing market in the Greater Toronto Area, where prices were up 33 % from a year ago while condominium rents rose 8.3 % in the first quarter from a year ago.
Now that two major cities have been impacted by a Foreign Buyer Tax, only time will tell if investors will look to other Canadian cities to invest their funds.
Canadian home sales up on a month-over-month basis in March
According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in March 2017.
- National home sales rose 1.1% from February to March.
- Actual (not seasonally adjusted) activity in March was up 6.6% from a year earlier.
- The number of newly listed homes climbed 2.5% from February to March.
- The MLS Home Price Index (HPI) was up 18.6% year-over-year (y-o-y) in March 2017.
- The national average sale price increased by 8.2% y-o-y in March.
Home sales over Canadian MLS Systems edged up 1.1% in March 2017, surpassing the previous monthly record set in April 2016 by one-quarter of a percent.
March sales were up from the previous month in more than half of all local markets, led by the Lower Mainland of British Columbia, London St. Thomas and Montreal.
Actual (not seasonally adjusted) activity in March was up 6.6% year-over-year, with gains in close to 75% of all local markets. Sales in the Greater Toronto Area (GTA) posted the biggest increase, which offset a decline in the number of homes changing hands in Greater Vancouver.
The number of newly listed homes rose 2.5% in March 2017, led by gains in the GTA, Calgary, Edmonton and the Lower Mainland of British Columbia.
With new listings having climbed by more than sales, the national sales-to-new listings ratio eased to 67.4% in March compared to 68.3% in February.
A sales-to-new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers and sellers markets respectively.
The ratio was above the sellers market threshold in about 60% of all local housing markets in March, the majority of which are located in British Columbia, in and around the GTA and across southwestern Ontario.
There were 4.1 months of inventory on a national basis at the end of March 2017, down from 4.2 months in February and the lowest level for this measure in almost a decade. The number of months of inventory in March 2017 stood at or below one month in the GTA, Hamilton-Burlington, Oakville-Milton, Kitchener-Waterloo, Cambridge, Brantford, Guelph, Barrie District, parts of the Niagara Region and parts of cottage country.
The Aggregate Composite MLS HPI rose by 18.6% y-o-y in March 2017. Price gains accelerated for all benchmark housing categories tracked by the index.
Prices for two-storey single family homes posted the strongest year-over-year gains (+21%), followed closely by townhouse/row units (+17.9%), one-storey single family homes (16.6%) and apartment units (16.3%).
While benchmark home prices were up from year-ago levels in 11 of 13 housing markets tracked by the MLS HPI, price trends continued to vary widely by location.
In the Fraser Valley and Greater Vancouver, prices have been recovering in recent months after having dipped in the second half of last year. On a year-over-year basis, home prices in the Fraser Valley and Greater Vancouver remain well above year-ago levels (+19.4% y-o-y and +12.7% y-o-y respectively).
Meanwhile, y-o-y benchmark price increases were in the 20% range in Victoria and elsewhere on Vancouver Island. Guelph recorded a similar price gain, while Greater Toronto and Oakville-Milton saw prices rise in the 30% range in March.
By comparison, home prices eased by 1.2% y-o-y in Calgary and by 1.5% y-o-y in Saskatoon. Prices in these two markets now stand 5.4% and 5.1% below their respective peaks reached in 2015.
Home prices were up modestly from year-ago levels in Regina (+1.7%), Ottawa (+4%), Greater Montreal (+3.3% y-o-y) and Greater Moncton (+4.7%).
Year-over-year price gains were led by different benchmark housing categories in each of these markets. In Regina, apartments posted the biggest price increase, which snapped a long series of price declines for apartments that began in early 2015. In Ottawa, prices rose most for one-storey single family homes. In Montreal, two-storey single family home prices posted the biggest gain; meanwhile in Moncton, it was townhouse/row unit prices that climbed the most.
HPI) provides the best way of gauging price trends because average price trends are prone to Home Price Index (MLSThe MLSbeing strongly distorted by changes in the mix of sales activity from one month to the next.
The actual (not seasonally adjusted) national average price for homes sold in March 2017 was $548,517, up 8.2% from where it stood one year earlier.
The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canadas tightest, most active and expensive housing markets.