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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Canadian home sales fall further in July
According to statistics released today by The Canadian Real Estate Association (CREA), national home sales declined further in July 2017. Highlights:
National home sales fell 2.1% from June to July.
Actual (not seasonally adjusted) activity in July stood 11.9% below last Julys level.
The number of newly listed homes edged back by 1.8% from June to July.
The MLS Home Price Index (HPI) was up 12.9% year-over-year (y-o-y) in July 2017.
The national average sale price edged down by 0.3% y-o-y in July.
Julys interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer, said CREA President Andrew Peck. Even so, sales activity continued to soften in the Greater Golden Horseshoe region. Meanwhile, sales and prices in Montreal continue to strengthen. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to.
July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontarios Fair Housing Plan was announced in April, said Gregory Klump, CREAs Chief Economist. This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether thats indeed the case once the transitory boost by buyers with pre-approved mortgages fades.
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Decline in single-family component moderated by gain in multi-family dwellings
Canadian municipalities issued $8.1 billion worth of building permits in June, up 2.5% from May and the second highest value on record. Higher construction intentions for multi-family dwellings and commercial buildings were mainly responsible for the national increase. All building components reported gains in June, except for single-family dwellings.
The value of residential building permits fell 0.9% in June to $5.0 billion, the fourth decrease in five months. The decline was mainly the result of lower construction intentions in four provinces, notably Ontario.
In June, the value of permits for single-family dwellings decreased 12.5% to $2.4 billion. Seven provinces registered declines, with Ontario being the main contributor to the decrease.
Conversely, construction intentions for multi-family dwellings rose 12.5% in June to $2.7 billion, marking a third consecutive monthly increase. Seven provinces registered gains, led by Ontario and British Columbia.
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