Mortgage Brokers

[khipson]

I love my mortgage broker.

My parents hated theirs, everything went wrong.

Having a broker makes the whole thing go so much better, and gets you a better deal - but get a referral from someone so you don't hire a dud.


One other thing you need to calculate when you're getting a mortgage is the penalty. Little bitty writing giving the bank the option to choose between a penalty of three months' interest OR the interest rate differential. The latter can be tens of thousands, depending on the size of your mortgage. If you are buying a home that you a guaranteed never to leave or sell, then you don't have to worry about it. But if there is a chance you will want to sell or refinance before the end of a five-year term, then get a variable rate mortgage or a one-year term. Or both.

[sumi]

anyone in the Toronto and Durham area know of a good mortgage broker??

[ashedfc]

With our variable rate mortgage, our payment is what we want it to be - well, the low end can only go so low. But since we can afford it at the moment, we pay more than we actually have to, to get rid of the mortgage faster. For us, what was originally a 25 year mortgage will be paid off in about 17 based on my rate today (which I know will go up, but it's still going to be gone before 25 years).

Another thing you can do that will shave a few years off your mortgage, make your mortgage payment every two weeks instead of every month.

Z

If you ask my personal recomendation:-
1. Keep paying your minimum payment (of your variable rate mortgage).
2. Whatever extra money you can save, rather than paying your mortgage - contribute in a TFSA (which pays you a monthly income every month). In a TFSA all the growth is tax free & the monthly income is also Tax Free.
3. Paying a mortgage in 17years seems good, but what happens after that: No Mortgage but you have no other asset (House Rich & Cash Poor).

By the TFSA route, your mortgage will take 25 years or maybe more: but you will also have the money inside the TFSA grown onto a significant amount (if done properly it can be more than the value of your house). And you are also getting a monthly income from your TFSA. This monthly income will help you pay your mortgage while you are working & it becomes your pension when you are retired.

I have come across a lot of retires who take a reverse mortgage to fund their retirement. WHY PAY YOUR MORTGAGE, WHEN YOU HAVE TO TAKE A REVERSE MORTGAGE TO FUND YOUR PENSION.

ASH
www.edfc.ac

[Eeyah]

One thing to note with a broker (and with banks) is often they will require a home appraisal - some brokers will pay the cost for you (it may be part of a contract that they have). Some banks are "sneeky" and lump it in with your new/revised mortgage and don't even bother to tell you. Just a heads up to those renewing, ask questions

[khipson]

Zonny - great job, and very smart of you! You are saving yourself so many thousands of dollars in interest that way, it would blow most people away to see the numbers.

[secheltsaver]

We bought in May 08,and had no idea what we were doing,so we went with a broker,she got us a 40 yr CMHC insured mortgage(10%down,1st time home buyers)from RBC @5.5% fixed rate 5 year term,with their double payment option,optional once a year lump sum prepayment up to 10% of original balance.We hope to have it paid waaaay down before renewal,and are making great progress so far!If our financial situation changes for the worse,our monthly payment would still be less than rent.The property is slated to be rezoned soon,and when I retire in 9 years(with a 30 yr govt. pension) we will sell it for redevelopment.
I am quite content with what we got-it's not the lowest rate,but we're not going to accumulate a lot of interest anyway(d/t all the extra payments)and it was a very good deal

[Zonny]

If you ask my personal recomendation:-
1. Keep paying your minimum payment (of your variable rate mortgage).
2. Whatever extra money you can save, rather than paying your mortgage - contribute in a TFSA (which pays you a monthly income every month). In a TFSA all the growth is tax free & the monthly income is also Tax Free.
3. Paying a mortgage in 17years seems good, but what happens after that: No Mortgage but you have no other asset (House Rich & Cash Poor).

By the TFSA route, your mortgage will take 25 years or maybe more: but you will also have the money inside the TFSA grown onto a significant amount (if done properly it can be more than the value of your house). And you are also getting a monthly income from your TFSA. This monthly income will help you pay your mortgage while you are working & it becomes your pension when you are retired.

I have come across a lot of retires who take a reverse mortgage to fund their retirement. WHY PAY YOUR MORTGAGE, WHEN YOU HAVE TO TAKE A REVERSE MORTGAGE TO FUND YOUR PENSION.

ASH
www.edfc.ac

For many folks out there, sound advice. But doesn't work for everybody. If we had no plans in place for retirement, a paid-off house isn't the big thing. For us though, a big thing is that we like the idea of being mortgage free when we retire. The idea of being mortgage free when our DS is going to college makes us happy, saving lots of cash in interest makes us happy. Having no debt other than our mortgage makes us happy.

We're both government employees with pensions, DH has his RRSP maxed out too. If we were going to put our money somewhere else, it would be to max out MY RRSP before going to a tax free savings account. We won't be broke people with just a house when we retire. We won't be cash-poor, and won't be doing anything like a reverse mortgage.

Would eight more years of mortgage payments earn us more in a TFSA? No sarcasm here, I just don't know the answer. I don't want to still be paying a mortgage payment during our retirement years.

Z

[ashedfc]

For many folks out there, sound advice. But doesn't work for everybody. If we had no plans in place for retirement, a paid-off house isn't the big thing. For us though, a big thing is that we like the idea of being mortgage free when we retire. The idea of being mortgage free when our DS is going to college makes us happy, saving lots of cash in interest makes us happy. Having no debt other than our mortgage makes us happy.

We're both government employees with pensions, DH has his RRSP maxed out too. If we were going to put our money somewhere else, it would be to max out MY RRSP before going to a tax free savings account. We won't be broke people with just a house when we retire. We won't be cash-poor, and won't be doing anything like a reverse mortgage.

Would eight more years of mortgage payments earn us more in a TFSA? No sarcasm here, I just don't know the answer. I don't want to still be paying a mortgage payment during our retirement years.

Z

If you have a defined benefit pension plan (as all government employees have), you should & you must pay down your mortgage.
You can relax regarding your retirement income.
But there are very few people out there who have benefits like you have.

ASH

[Zonny]

If you have a defined benefit pension plan (as all government employees have), you should & you must pay down your mortgage.
You can relax regarding your retirement income.
But there are very few people out there who have benefits like you have.

ASH

Thanks for the info! And yes, we're very very lucky to have what we do for jobs, even if we hate them at times.

Z

[MortgageQueen]

Hi there!

I'm a mortgage agent and I'd be happy to help you find a great mortgage. I love doing this job because it's like bargain shopping on steroids! Lol !
Feel free to send me a note and I'll help any way I can. Cheers!

Darlene
[email protected]

[Kay2371]

With our variable rate mortgage, our payment is what we want it to be - well, the low end can only go so low. But since we can afford it at the moment, we pay more than we actually have to, to get rid of the mortgage faster. For us, what was originally a 25 year mortgage will be paid off in about 17 based on my rate today (which I know will go up, but it's still going to be gone before 25 years).

Another thing you can do that will shave a few years off your mortgage, make your mortgage payment every two weeks instead of every month.

Z

We make weekly payments and it pays down the mortgage even faster and has a big savings on the amount of interest paid.

We are up for renewal right now and I have contacted a mortgage broker and the rate she has for me doesn't seem to be too far off from our bank's posted rate right now - the mortgage broker's rate is still lower. I have a meeting with my bank's branch manager this week to see what she can do for us rate wise. We have usually gotten a pretty good rate at our bank as all my family (sisters, parents, aunts/uncles and grandparents) and my mom's company uses them for mortgages so I'll see what happens.

[Zonny]

We make weekly payments and it pays down the mortgage even faster and has a big savings on the amount of interest paid.

I don't think that weekly makes that much of a difference compared to paying every two weeks. Anyone out there who knows differently?

The way I see it, say you pay $1000 a month. If you're paying monthly, that's $12,000 a year. If you're paying $500 every two weeks instead, that's 26 payments, so you're paying $13,000 a year. That's an additional $1000 each year, adding up to a fairly significant amount over 20 years, especially when you consider the interest.

If you pay $250 a week instead, 52 payments adds up to the same thing, $13000. I guess the interest might make a bit of a difference, but not nearly as much as the difference between monthly and biweekly payments.

Z

[Kay2371]

I don't think that weekly makes that much of a difference compared to paying every two weeks. Anyone out there who knows differently?

The way I see it, say you pay $1000 a month. If you're paying monthly, that's $12,000 a year. If you're paying $500 every two weeks instead, that's 26 payments, so you're paying $13,000 a year. That's an additional $1000 each year, adding up to a fairly significant amount over 20 years, especially when you consider the interest.

If you pay $250 a week instead, 52 payments adds up to the same thing, $13000. I guess the interest might make a bit of a difference, but not nearly as much as the difference between monthly and biweekly payments.

Z

Yes, I don't think it is a huge savings on interest paying weekly, but the less I end up paying the bank the better! You can use a mortgage payment calculator online to see the savings between monthly/biweekly and weekly payments and the amount of interest cost for the term.

[MortgageQueen]

I don't think that weekly makes that much of a difference compared to paying every two weeks. Anyone out there who knows differently?

The way I see it, say you pay $1000 a month. If you're paying monthly, that's $12,000 a year. If you're paying $500 every two weeks instead, that's 26 payments, so you're paying $13,000 a year. That's an additional $1000 each year, adding up to a fairly significant amount over 20 years, especially when you consider the interest.

If you pay $250 a week instead, 52 payments adds up to the same thing, $13000. I guess the interest might make a bit of a difference, but not nearly as much as the difference between monthly and biweekly payments.

Z

You're quite right Zonny. Although there is a small difference, it could very well not be worth the hassle of a weekly payment. I always encourage my clients to go bi-weekly if they can. It can mean paying your house off in 20 yrs. intead of 25 yrs. with just that little extra push on the payments. It's a HUGE savings on interest.

[Ricko]

Anybody know of a good mortgage broker in the Ottawa/Cornwall area?

I have to renew my mortgage in July and hope to get pre-approved soon before the rates go up.