On Monday I received a personalized email from the President. No it wasn't Obama, it was Mark Kerzner, President of The Mortgage Group Canada Inc. His email made reference to the potential "tipping point" in respect to additional changes in the lending guidelines and products which have impacted the mortgage and housing markets in Canada. Just like many Canadians, we are concerned with some of the market trends that have occurred over the last few months. I thought I should outline a few helpful tips to save you some of your hard earned cash.
Have you purchased a pre-sale that is not yet complete? I encourage you to keep reading as there are some important points to consider.
Housing and condominum starts are slow and resale activity has maintained at a moderate pace. Many Canadians are coming up for mortgage renewal and I thought it was important to mention that you definitely have a few options to save some money. I recently made the switch from Blackberry to an iPhone and I won't get into the logistics but what I will say is that I needed to change my current cellular plan to accomodate the increased data that the iPhone utilizes over the Blackberry. In order to complete this transaction, I needed to provide some personal documentation...a slight inconvenience at the time but it saved me a considerable amount of money in the long run. So where am I going with this? Many consumers like to take the route that requires the least amount of resistance. In doing so, you'll miss out on opportunities.
This is all about exploring options; you have the choice at mortgage renewal to explore such options. Banks and lenders will send you a notice a few months from your mortgage renewal date and offer you an interest rate to continue with their services. Sure this may be convenient, but it could also cost you thousands of dollars in the long run. They may require additional documentation to re-qualify for the mortgage amount or they may decide to just continue on with the new renewal rate. In either case, if you want to save money and be catered to with exceptional service, call a broker and we will work with you to obtain the best deal possible. Let's face it, your current lender will rarely offer you the best rates and products available on the market regardless of how important of a client you are.
After running the numbers, the average consumer saves about 40 basis points off their mortgage rate by simply exploring your options at renewal. On a $300,000.00 mortgage, this could be the difference in over $60.00 per month or $2,000.00 for the 5 years. I don't know about you but looking purely at these savings it would be worth it to explore your options, let alone the additional savings brokers can obtain for you. Exploring options could be such things as changing lenders. This will require you to re-qualify but new lenders in most instances will cover your legal and appraisal costs to switch. So for a slight inconvenience of obtaining some documents, you will save a considerable amount of money.
Another interesting tidbit to add is for those of you that have purchased a pre-sale that has not completed yet. Many of you most likely got pre-approved on site at the time of purchase. With the lending guidelines changing over this past year, I highly recommend you review your current pre-approval to ensure you will in fact qualify for the property you purchased. Most lenders on site will inflate the interest rates to account for market fluctuations until completion. With the interest rates at an all time low and projections to continue at rock bottom levels for the near future, I recommend that you call me for a free consulation before signing on the dotted line...again, this could save you thousands!
Let's say you're currently shopping around and looking to just make a purchase, not renewing your mortgage. The average consumer saves 19 basis points off the mortgage interest rate by utilizing the free services of a Mortgage Broker as opposed to going to the bank yourself.
Cost savings aside, do yourself a favour and contact me for personalized, professional service, I guarantee you will be impressed!
As always, I encourage you to contact me if you have any questions with your current mortgage or are looking for one. Please find me on facebook at facebook.com/jnmortgages on twitter @jasonmortgages.
Jason Nesseth with TMG The Mortgage Group Canada Inc. If you have any questions or comments about this blog, please feel free to call Jason at 604.375.7375, email jason.n@mortgagegroup.com or visit his website at jasonnesseth.com