http://www.articletrader.com/ Articles at ArticleTrader en-us http://www.articletrader.com/finance/mortgage/the-different-strategies-to-obtain-a-down-payment-taus-hypothecaire.html http://www.articletrader.com/finance/mortgage/the-different-strategies-to-obtain-a-down-payment-taus-hypothecaire.html Wed, 19 Sep 2007 00:00:00 -0500
What are the ways of obtaining a down payment?

There are many different ways to obtain a down payment for your home. There are the standard, usual ones, but there are others that most people don’t know about but I have learned about during the many years I have been advising my clients regarding their mortgages. Basically, there are three methods - hypotheque:
A. Your own money
B. A gift from a relative
C. Funds obtained from other people or in a different way

Down payment from your own funds

The most usual form of down payment is funds that the borrower himself already has and can put down on a property. In other words, the person who is requesting the mortgage and who will own the property will supply the money for the down payment himself. This can be from various sources:

• The savings of the borrower. This money may come from a bank account, from investments that are not locked in as retirement funds, or even from a bank account a company that you own has (taux hypothecaire).

• RRSP: It is possible with the HPB (Home Buyer’s Plan) that the Canadian government initiated in 1990, to use your RRSP as a down payment for the purchase of property. It is important to know the rules of HPB to make sure you are able to use this method - pret hypothecaire.

• Life insurance cash value: Some life insurance policies have a cash value tied to them and the insured can borrow against this cash value and create a down payment for the purchase of a home - pret hypothecaire.

• Refinancing: If you own a property already, you may be able to refinance it and generate the funds for a down payment on another property purchase. In this case, the down payment is not considered a loan because it is basically your own funds that you are drawing against.

• Collateral guarantee: There is a complicated method by which you can use the equity in another property, even if it is mortgaged, to guarantee the purchase of property. In essence, a collateral guarantee on the other property is thereby created - taux hypothecaire.

Lenders, in most cases, will require that any funds used for a down payment already be in your bank account for at least 90 days prior to them being used as a down payment. They do this in order to meet the terms of government requirements designed to prevent money laundering.

What this means is that you should not be keeping your money in cash under the mattress or buried in the yard if you want to use it as a down payment for a home.

Down payment from a gift

Many times a gift is given to a potential mortgage applicant to be used as a down payment on a home. This is okay, provided the gift is from a relative. That relative can be a spouse, a parent, a grandparent, a brother or sister, a child or even an aunt or uncle - hypotheque.

This kind of a gift has to be accompanied by a “gift letter”. This is a letter that explains that the money is a gift and not a loan that has to be repaid. (see this link for a blank gift letter you can use).

Most lenders will require that the gift funds are deposited into the bank account of the purchaser of the property prior to the processing of the mortgage application.

Down payment from other people or in another manner

A down payment that comes from another source besides the personal assets of the borrower or a gift is rather rare, but there are possibilities.

• A gift from the bank : This is actually a no down payment home loan because it is the bank that gives you the 5% (or less) for the down payment. Of course, the bank has taken this into account, and the rate will be a little higher in order that the “gift” is repaid before the end of the term of the loan - taux hypothecaire.

• Loan: Certain products that are insured by CMHC allow for the funds to come from a loan. This is a rare situation.

• RRSP loan following an HPB: This strategy allows you to have a small down payment even if you do not have any RRSP funds in your portfolio. You only have to have a RRSP loan for 90 days, which is in turn paid down by the HPB. The new RRSP contribution will yield a tax refund which can be used as a down payment. This strategy operates for those who begin the RRSP loan before February, have already entered into negotiations to buy a home and who foresee buying a house at the end of spring or the beginning of summer, at the latest. I strongly encourage you to contact an RRSP loan specialist.

• Sales price balance : During the last few years, the real estate market has been extremely positive for sellers and properties sold so easily that down payments in the form of sales price balance practically aren’t used anymore. A sales price balance is a loan by the seller to the buyer for a certain amount which is guaranteed by a second mortgage. Most banks accept down payments which come from a sales price balance - hypotheque.

What conclusions can we draw from this? You have to treat the down payment as one of the most critical pieces of your mortgage. If you are unclear about how you can come up with a down payment, we would be happy to work with you to plan the strategy to find the funds for your down payment.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage loans - prêt hypothécaire, please visit: Informezvous.com - hypothèque

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/is-it-better-to-pay-your-home-loan-weekly-every-two-weeks-or-once-a-month-pret-hypothecaire.html http://www.articletrader.com/finance/mortgage/is-it-better-to-pay-your-home-loan-weekly-every-two-weeks-or-once-a-month-pret-hypothecaire.html Thu, 13 Sep 2007 00:00:00 -0500
Let us look at the two alternate ways of making weekly or twice monthly payments (prêt hypothécaire).

-accelerated weekly payments
-minimum weekly payments

The method that most of us use is the accelerated weekly payment method. With this method, the standard monthly payment is divided by 4. When you examine this, you will realize that you are really making more payments than you would otherwise in a year. There are more than 4 weeks in a month, so with this system, you end up paying an extra 4 payments a year on your home loan - prêt hypothecaire.

You can see right away that the savings from these two methods will not be the same. The minimum weekly payment (prêt hypothecaire) increases the frequency of payments from 12 times annually to 52 times annually, while the accelerated weekly payment method actually ADDS 4 extra payments to the number of payments, in addition to increasing the frequency of payments.

We can look at my studies of these two methods of mortgage payments.

The minimum weekly payment

Let us use a hypothetical loan of $200,000 at 5.4%, with a 25 year amortization period. This method of payment would save the borrower $1,294.12 over the life of the loan - prêt hypothécaire.

If the interest rate were higher, his savings would be substantially higher. An interest rate of twice as much would mean a savings 7.08 greater.
The borrower will have a 43% savings with a once a week payment instead of a once every two weeks payment. The rate of interest will not affect this.

How can this be?

There is a easy explanation, but explaining it is not easy. There is less time between each payment, therefore a capital portion of the loan is constantly being paid down a few days earlier. This reduces the interest paid on the outstanding portion. Even though this savings is not very great for each payment, the overall cumulative total is large.

Findings: The more payments that are made, the more you will save on your mortgage, even if you never increase the amount being paid. So, make your payment each week to get the most savings. If not, at least do it every two weeks.

The accelerated weekly payment - Summary:

1. The accelerated weekly payment increases payments by $23.25 a week on a mortgage of $200,000 amortized over 25 years with an interest rate of 5.4%.

2. The home ($200,000) will be paid off in 1,107 payments, or 21.3 years.

3. The savings will be $28,173.78 (the calculations are at the end of the article)

4. It will be wiser not to make accelerated payments if you have a fixed or guaranteed investment which earns 7.52% per year before taxes.

It is important to choose the right payment method for your mortgage, but the most critical thing of all is to choose the best mortgage strategy.

Notes : If someone buys a home for $200,000 (with a rate of 5.4%) and pays it once a month ($1,209.16 a month), he will have paid $362,749.83 after 25 years ($200,000 plus $162,749.83 in interest); on the other hand, with accelerated weekly payments ($302.29 per week), he will have paid $334,576.05 ($200,000 plus $134,576.05 interest) in 1,107 weeks our 21.3 years. This is a savings of $28,173.78 ($362,749.83-$334,576.05) to pay the same mortgage.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage loans - prêt hypothécaire, please visit: Informezvous.com - hypothèque

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/how-do-you-choose-the-right-loan-strategy-to-suit-your-situation-prets-hypothecaires.html http://www.articletrader.com/finance/mortgage/how-do-you-choose-the-right-loan-strategy-to-suit-your-situation-prets-hypothecaires.html Tue, 11 Sep 2007 00:00:00 -0500
How to choose the right mortgage strategy?

The easy answer: contact a mortgage consultant who specializes in creating a unique mortgage strategy for their clients - pret hypothecaire.

Why?

There are three good reasons:
1.We can’t predict the future of interest rates in Canada.
2.The right strategy must take into account the current and future economic context.
3.One has to customize it according to the client’s objectives and personal situation.

All this is not that simple, and it is best to consult a mortgage broker who does this every day.

But let’s not stop there.

The more difficult response is to analyze several factors in creating a mortgage plan.

An expert such as this will understand each strategy that exists and how it should be applied, will know how to properly put together strategies in the best way to serve the borrower, will know about the economy and interest rate cycles and how they will affect the chosen strategy.

The interest rate cycles.
There are essentially three scenarios and two fundamental rules to understand interest rates (all this could take up several volumes, but we’re going to keep it as simple as possible).

Scenarios:
1. Rates are generally increasing (1950-1980)
2. Rates are generally decreasing (1982-2003)
3. Rates are generally stable (2003-2006).

Each of these scenarios demands a particular strategy. It could be disastrous to adopt a strategy conceived for descending rates and then see them climb.

Interest rates roughly follow two basic rules:

-They will more or less follow the inflation rate. If the inflation rate, as measured by the consumer price index increases, we should look for\expect an increase in interest rates.
-They are indicative of the health of the economy. In a strong economic environment, interest rates will tend to rise since money is in demand, and interest rates are the price of money. In a weak economic environment, demand for money is low and therefore interest rates are lower.

It is impossible to predict interest rates 100% accurately, but we can observe that interest rates were 9.6% on average over the last thirty years, and they are now about 5% - pret hypothecaire.

There are basic strategies to work with, and on top of that, a good mortgage broker will find ways of combining the features of different strategies to suit the needs of his client. It can never be one size fits all when it comes to home loan strategies; knowing the best strategy or combination of strategies in each situation takes a mortgage professional.

The basic strategies that your mortgage consultant will work with are the following:
- 5 times 5 is a situation where a mortgage is renewed five times with a term of five years for each renewal.
- A long term mortgage has a fixed rate on a 15, 20 or 25 year mortgage.
- A variable rate mortgage has a rate that changes during the life of the loan, with the rate based on the base rate of the Bank of Canada.
- The Smith Maneuver is when the borrower (whether he is a salaried employee, or self employed) or can lower his personal income tax by the amount of interest paid on his private residence.
- A retirement loan uses the equity in the property as additional income for retirement.
- A no down payment loan allows the home buyer to borrow the full amount of the purchase price. To decide whether this is the right decision, you have to do the calculations to see whether saving up for the 5% down payment while paying rent is better than taking out a larger loan to buy a home sooner and avoid paying rent.
- A less than perfect credit loan means that the borrower uses the funds to improve his credit to get better interest rates in the long run.

A well qualified mortgage broker will look at all of these types of loans and, combining that information with the personal information of the borrower, devise the perfect strategy for the borrower - prêts hypothécaires. That is why getting the best loan strategy will do so much more than just getting the lowest interest rate on a loan.

How to choose the strategy that is best for you?

I advise you to contact a professional in mortgage planning to establish a personalized strategy. It’s free and … enriching.

--
Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgages - prêt hypothecaire, please visit: Pret hypothecaire

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/the-most-common-situations-that-lead-to-a-penalty-taux-hypothecaire.html http://www.articletrader.com/finance/mortgage/the-most-common-situations-that-lead-to-a-penalty-taux-hypothecaire.html Wed, 25 Jul 2007 00:00:00 -0500
(Note: This article is part of a group of articles on the subject of mortgage penalties. It may be that your inquiry regarding penalties may be better answered in another article. The list of the other articles on penalties can be found at the end of this article.)

Penalties charged by lenders on a mortgage loan that is paid off sooner than the maturity date can be avoided in certain situations; in other situations, you may not have a choice in the matter.

The sale of your home: To sell a home does not automatically mean that you have to break your mortgage contract and pay a penalty (check if your mortgage is portable) but if you are not going to buy another house or if you are moving outside of the country, then you do have to pay a penalty. Before despairing, take the time to read the article How to lower or avoid a penalty? in order to at least save some money.

Refinancing for debt consolidation

Mortgage refinancing is an excellent way to consolidate debt and allow people to get their finances resituated. It works really well for most people. However, it is important to examine the way it is done. It may work better to take out a second mortgage instead of consolidating one mortgage, especially if you do not have much time left on your mortgage. A qualified mortgage consultant will be able to calculate the best ways to handle situations such as this, since each situation is different and requires a different solution.

Refinancing for renovations:

Renovating often requires more money to have the work done. There are three ideas that can save you money if you are considering refinancing for renovations:

Some kinds of work are considered urgent and should be done immediately. When this is the case, you should see if you can choose the option of financing the renovation with a personal loan or a line of credit loan. When you renew your mortgage, you can include the renovations in that refinancing package, and pay off the other loan.

If you plan to renovate your home in order to sell it more quickly or for more money, it is possible to refinance with an open mortgage so that you do not have to pay a second penalty once you sell, or obtain the second mortgage for the home improvements.

If you have chosena property that you plan on buying in the near future, but want to renovate once you have bought it, you also have an option known as the renovation loan option. In this case, you can borrow money now for the renovations you will do once the home is purchased.

Marriage separation: In the case of separation, the most usual practice is that one of the partners buys half of the home from the other partner. In this case, it may be possible to request a balance transfer rate for additional funds.

Sometimes, this will not work because the salary of the one partner who wants to take over the mortgage is not sufficient to qualify him or her for a new mortgage. If you have such a problem, we suggest you get in touch with our office to see if you can take advantageof a product called a “self declared revenue loan” to meet your home loan needs.

You will probably have a penalty for breaking the loan contract, but you will still have your home.

Executing a will: In the event of death, it is oftennecessary to sell a home. Certain lenders do not charge a penalty in these cases. You have to find out.

Carefully consider your options

Before making any decision that will lead to a penalty, discuss your situation with an accredited mortgage counselor (CHA) to learn whether there is not another solution.

It is, after all, thousands of dollars we are talking about; it is well worth your trouble to find out.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothèque, please visit: Hypothèques - Mortgage Intelligence

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/all-about-mortgage-penalities-hypotheque.html http://www.articletrader.com/finance/mortgage/all-about-mortgage-penalities-hypotheque.html Mon, 23 Jul 2007 00:00:00 -0500
In most cases, for fixed loans, the early payment penalty is the higher of three months interest, or the differential between the original interest and new rates of interest, for the rest of the life of the loan.

BUT… it is not always that simple.

Some lenders (even the large financial institutions) will instead choose to calculate the difference between the two rates for the end of the term of the loan in a rather interesting way. They decide to use the posted rate, usually the highest mortgage rate rather than the discounted rate. This is why you should always ask your lender for a penalty payment estimate.

(NOTE: We want to inform you of this so that you know to be careful and be sure to choose a good lender. Working with an experienced broker can help you place your mortgage application with a lender who uses the best penalty calculation for you.

There are different ways of figuring the penalty, depending upon the product:

Each kind of loan products have, in general, different penalties:

· Open Mortgage Loan: this is the only kind of loan that does not include a penalty for pre- payment. The various types of “line of credit” mortgages are often open mortgages.
· Fixed closed mortgage loan: For the most part, the penalty is figured as the higher of either three months interest or the difference between the original rate and the current rate, for the rest of the term of the loan.
· Fixed closed long term mortgage: For mortgages of over 15 years, the penalty for
o For the first five years of the term, is the higher of either three months interest or the difference between the loan rate and the current rate, for the rest of the term of the loan.
o After five years, it is only three months interest.
· Variable closed mortgage loan: Normally, three months interest but sometimes certain lenders only charge 2 months interest and others will charge 6 months interest as a penalty.
· Mortgage loan “5 in 1”: This is popular among some mortgage lenders. The penalty is usually 6 months interest.

Reimbursement of cash rebate

There are some mortgage loans that include a cash rebate. In these cases, don’t be surprised that the rate is higher and that you must pay back the cash rebate equal to the number of months from the time you break the contract to the completion of the original mortgage term.

Example: You have received a cash rebate of 4% of your mortgage of $200,000, that is, $8,000. You repay the mortgage thirty months later (on a mortgage term of 5 years, or 60 months). You must repay 31/60ths of the rebate (there are 31 months between the 30th payment and the 60th payment on a total term of 60 months). The calculation is $8,000 times 31, divided by 60, or $4,133.33, to arrive at the amount of the reimbursement of the cash rebate.

You can be sure that this refund will be in addition to any other penalties, and so your total penalties will be that much more expensive.

Why is there a penalty for pre-payment?

In the world of mortgages, very few banks hold onto the loans they make. They continue to administer the loan, but they market the loans in the secondary mortgage market to investors, who buy these mortgages in lots of $100 to $500 million. These investors plan on earning the interest on the loan for the remainder of the term.

If a mortgage is paid down before the term is over, no matter how little time is left on the loan, the lending bank will have to take care of the contract changes as well as pay off the lenders for the amount of future revenue they are not going to earn now that the loan is paid off. These additional charges are not absorbed by the bank, but are passed onto the borrower in the form of charges and penalties.

Another important reason that banks impose early payment penalties is that they want to discourage borrowers from leaving them. If it were free, borrowers would just switch lenders any time they wanted.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothèque, please visit: Hypothèques - Mortgage Intelligence

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/how-do-lenders-calculate-mortgage-penalities-hypotheque.html http://www.articletrader.com/finance/mortgage/how-do-lenders-calculate-mortgage-penalities-hypotheque.html Fri, 13 Jul 2007 00:00:00 -0500
(Note: This article is part of a series on the topic of mortgage penalties. Your own mortgage penalty question may be more directly answered in one of the other articles. Please see the list of articles at the end of this one.)

There are two ways that mortgage lenders figure mortgage penalties. Needless to say, since there are two ways, they will choose the one that is most advantageous for them.

1. Number of months interest penalty (2, 3 or 6 months). You have to separate the interest piece of your mortgage payment from the principal and then multiply it by the number of months designated for the penalty.

Example: If a borrower pays his mortgage after thirty months, for a 25 year mortgage of $200,000 at 5.4%, his monthly disbursements will be $1,209.17 and the interest on the 30th payment will be $846.18. So, if the penalty is 3 months, the cost of the penalty in this example will be 3 X $846.18 or $2,538.55.

2. Rate differential calculation. This is really the difference between the rates for the balance of the loan. This is more complicated to calculate, but the rationale of it is easy to see. This calculation is used when the rate in force at the time you break your loan contract is lower than the rate on your loan when negotiated. The penalty is calculated as the difference between the mortgage interest rate on the old loan and the amount the bank will make on a new loan at this time. Here is an example to see it better:

Example: Let us take the same scenario; you have a $200,000 mortgage amortized over 25 years with a rate of 5.4% for 5 years and a payment of $1,209.17 per month. After 30 months, you have to break your home loan contract (pre-payment) and the lender will charge you a penalty. The rate at that moment (30 months later) is 4.75%.

Here is how it is calculated:

a. The lender should have received a certain amount on this loan based on the original rate of 5.4%. Using a financial calculator, the lender determines this amount to be $25, 447.16, which represents the payments from the 30th month through the 60th month, or five years.

b.The amount of interest that that lender can receive now if it lent the money at the rate of 4.75% for the 31 month period (30th payment through 60th payment) is calculated, again using a financial calculator, at $22,250.74.

c. The final step is to calculate the difference between what the lender should have earned and what he will earn at the new lower rate. No financial calculator needed for this: $25,447.16 minus $22,250.74 equals $3,196.26, and you have the penalty!

Borrowers have a hard time understanding this system.

No borrower wants to pay a penalty on his mortgage! That’s for sure, but all mortgage loans, apart from some unusual types of open mortgages, have penalties for prepayments. The subject of penalties includes many aspects which need clear explanation and examples in order to be able to fully understand them.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothécaire, please visit: Hypothèque - Get a loan

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/the-variable-mortgage-strategy-hypotheque.html http://www.articletrader.com/finance/mortgage/the-variable-mortgage-strategy-hypotheque.html Thu, 12 Jul 2007 00:00:00 -0500
For some years now, variable rate mortgage loans have become more and more popular and more and more used by borrowers.

Dr. Milevski of York University, Toronto, conducted a study that reported that between 1950 and 2000, having a variable rate mortgage proved to be a cheaper strategy than the traditional five year fixed term strategy 88% of the time.

Anyone who obtains a variable rate mortgage should realize that there is an inherent risk because of the uncertainty of the rate. But for all of these last years, it has been shown to be an acceptable risk.

Description

The interest rate on a variable rate mortgage is based on the base rate of the large Canadian banks. The borrower will pay a rabais over this base rate. A variable rate loan is always quoted as the base rate less some kind of percentage.

Example: “Base rate less 0.90%”. In this case, if the base rate is 6.00%, the client will pay 5.10% on his loan (6.00%-.90%) for the period of this base rate. A few months later, if the base rate is 5.25%, the loan rate will be 4.35% (5.25%-.90%) for the period of the new base rate. The Bank of Canada fixes the rate 8 times per year. This does not mean that the rate will necessarily change 8 times per year, but it is possible.

Advantages

- The variable ratestrategy has been the best choice over recent years, especially in the periods of falling or unchanging interest rates.
- It permits one to take advantage of falling rates during the period of the mortgage.
- Payments are normally lower.
- There is a lower penalty fee than with other loans.
- Many lenders offer this loan choice.

Disadvantages

- The rates are variable, so they can go either up or down, adding an element of risk.
- Payments can vary with the interest rate. (It is possible not to be subject to variations n your mortgage payment-see below.)
- You have to follow the interest rates of the Bank of Canada several times a year.


When to Use this Strategy for the Long Term

It has been shown that the variable rate policy is most often the best choice, especially if interest rates remain stable or decrease. But since we can never know for sure if interest rates are headed up or down, you have to keep close track of rate adjustments at least 8 times per year.

You can switch to a fixed rate option when you have a variable rate loan, but you have to be careful about the new fixed rate. Some lenders (your mortgage broker should be familiar with which ones) increase the fixed rate when the conversion option is being chosen.

The explanation for this is simple. Obviously, when a client wants to convert, it is because the interest rates have increased. If the bank has not put any proviso for the conversion rate in the original engagement letter, they can give the client the highest fixed rate, such as the posted rate or the rate with a rabais. This is not the best rate that usually can be obtained by a mortgage broker. So the client has to decide which makes more sense over the long run, variable or higher fixed.

Certain lenders (all of the ones we recommend to our clients) promise in the loan engagement letter that when the client makes the choice to convert, he will receive the best broker rate for the loan for that day. You have to carefully choose your lender if you are going to use the variable rate strategy.

Can a borrower avoid fluctuating mortgage payments?

The idea that the mortgage payments can increase or decrease with a variable rate mortgage makes a lot of people uncomfortable. There are two solutions:

You can opt to have a fixed payment, no matter if there are changes in the rate. What will happen is that the amortization amount will change instead.

You can raise your initial payments up to the higher level of a fixed rate loan and then any increases in the variable interest rate will be covered. This is the solution I recommend, since you will not be increasing the balance due on the mortgage.

How do you stay on top of the interest rate direction?

Due to the fact that the rate on your mortgage will vary with the base rate, it is important to keep an eye on the base rate. It is not very difficult to do this.

First of all, the base rate can only change 8 times per year (it’s not every day), that is, when the Bank of Canada adjusts it directeur rate. When the bank changes the rate, this announcement is broadcast throughout the media: newspapers, radio and television).

In addition, we provide for our clients (free of charge) an email subscription service that allows them to follow the change in the base rate each time the Bank of Canada meets. In this way, our clients know the change in the interest rate the same day it occurs, and they also receive predictions for the coming months

Variable rate with Ceiling option

Certain lenders can give a variable rate with a ceiling. That is to say, if the variable rate increases to more than the ceiling, your mortgage will be adjusted so that your rate will be equal to the ceiling. In other words, the ceiling rate is the maximum rate for your mortgage.

Conclusion

The variable rate strategy should be given a lot of thought. It is a strategy that can save a borrower thousands of dollars in interest rate costs. But it is important to keep these three things in mind:

1. It is important to have a good lender, since there are many types of variable loan.
2. Make sure you obtain a conversion option that will guarantee you the best fixed rate at conversion.
3. Stay on top interest rates or make sure that your mortgage broker stays in touch with you to advise you of changes.

The variable rate is the strategy which has performed the best over the last 50 years.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothèque, please visit: Mortgages - hypothèques

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/the-fears-of-mortgage-lenders.html http://www.articletrader.com/finance/mortgage/the-fears-of-mortgage-lenders.html Tue, 19 Jun 2007 00:00:00 -0500
Once you understand what mortgage lenders don’t want to face, you will better understand whether or not your application will be viewed in a good light by the mortgage lenders you apply to - taux hypothecaire.

A home lender has two major fears:

To lose money

No lender wants to forfeit his capital or the interest on a home loan. Loan defaults can and do happen - taux hypothecaire, and from the lenders perspective, it happens all too often.

When this happens, the lender has even more losses because he has to cover the fees of a lawyer to start the proper steps for the foreclosure of the home.

Then the mortgage lender has to hope that the current market value of the property is high enough to pay off the principal (taux hypothecaire), the late interest payments, and the legal costs.

Loss of time

The steps necessary to repossess a property is a great loss of time as well as money to a lender. The lender is primarily interested in collecting mortgage payments and earning interest on the capital lent. Taking care of a home while it is in foreclosure proceedings is not the opportune use of a lender’s time; he just considers it lost time.

There are instances where the lender does not lose money on the house because it is a loan that is guaranteed (taux hypothecaire), for example by CMHC. Even so, the lender will want to do everthing he can to assure that the loan is a good loan and the borrower is a good risk rather than have to foreclose.

Many times, people ask “Why won’t the lender give me a mortgage-they have my house as security?”

Well, they don’t want your home, only your mortgage payments - taux hypothecaire.

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Gregory is an Accredited Mortgage Professional (AMP) with Mortgage Intelligence. If you need more information about Mortgage rates - taux hypothecaire, visit: taux Hypothecaires - Mortgage Intelligence

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/should-you-work-with-a-mortgage-broker-a-mortgage-marketer-or-a-bank-representative.html http://www.articletrader.com/finance/mortgage/should-you-work-with-a-mortgage-broker-a-mortgage-marketer-or-a-bank-representative.html Thu, 14 Jun 2007 00:00:00 -0500
• The representative of the local bank branch: The reps only offer loans, and have a number of other duties besides mortgage loans, are salaried, and perhaps receive an annual bonus.

Traditionally, it is the local bank branch representative who acts as the mortgage consultant. He is the only one who is able to make a mortgage application for borrowers - taux hypothecaire. The world of mortgage financing has changed and almost all lenders offer their mortgage products through mortgage brokers and, in certain cases, through mortgage marketers. The bank representatives continue to offer mortgage loans (as well as other financial products) but only for the bank they work for.)

• The mortgage marketer: He only offers loans, and his specialty is mortgage loans. The bank or lender he works for pays him a commission (taux hypothecaire).

Banks now hire local reps to be able to serve the clients better. A mortgage marketer will go to the client, but he is still only works for the one bank that hired him and pays his commission (based on the amount of the mortgage of the borrower.)

• The mortgage broker: The broker can offer the loan products of many lenders. He specializes in mortgages and works for commission, which he receives from whatever lender takes the loan.

Mortgage brokers have been around for a while (thirty years) but have only recently become an important factor in the home loan market. A mortgage broker will work with many lenders (thirty or more) and has the flexibility to deal with any one of them to find the best deal for a client - taux hypothecaire. There are more than 12,000 mortgage brokers in Canada, and they represent 27% of the total home loan market).

(NB: I try to be neutral on this issue, but since I am a mortgage broker, I want to let you know that I believe that a mortgage broker is the best individual to deal with for a mortgage - taux hypothecaire. Otherwise, I would have chosen one of the other fields!

Of this you can be sure: the expertise and integrity of whatever consultant you work with will make a critical difference. Of course, there are expert local bank branch representatives, expert mortgage marketers and expert mortgage brokers. And then, there are many who do not fully understand this field.

It is the person in the position that is most important.

No matter what, it is the integrity and expertise of your mortgage consultant that will make the most difference. There are very good local bank branch representatives, very good mortgage marketers and very good mortgage brokers. Of course, there are very bad ones as well. It is the individual in the position who will make the most impact in the long run - taux hypothecaire.

Mortgage brokering has become more popular

In 2004, a survey conducted by the CMHC indicated that over 26% of all of the mortgages in Canada were financed through the intermediary of a mortgage broker (taux hypothecaire). But remember, it is the individual you work with, his integrity and expertise that counts.

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Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothèque, please visit: Mortgages - hypothèques

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/is-it-better-to-work-with-a-mortgage-broker-a-mortgage-marketer-or-a-bank-representative.html http://www.articletrader.com/finance/mortgage/is-it-better-to-work-with-a-mortgage-broker-a-mortgage-marketer-or-a-bank-representative.html Thu, 17 May 2007 00:00:00 -0500
• The representative of the local bank branch: They only offer loans, and have many other duties besides mortgage loans, are salaried, with a possibility of an annual bonus.

Traditionally, it is the local bank branch representative who acts as the home loan consultant. He is the only one who is able to make a mortgage application for borrowers - taux hypothecaire. The world of mortgage financing has changed and almost all lenders offer their mortgage products through mortgage brokers and, in some cases, through mortgage marketers. The bank representatives continue to offer mortgage loans (as well as other financial products) but only for the bank they represent.)

• The mortgage marketer: He only deals with loans, with a specialty in mortgage loans. He is compensated by the bank that he originates the loans for.

A recent trend is for banks to hire local reps in order to serve the clientele best. A mortgage marketer (taux hypothecaire) will go to the client, but he works for the bank that hires him. He is paid a commission on the amount of the loans he originates.

• The mortgage broker: He offers the loan products of many lenders, specializes in home loans and works only for commission (paid by the lender).

Mortgage brokers have existed for thirty years, but have only become a major factor in the mortgage market over the last few years (taux hypothecaire). Mortgage brokers work directly with many lenders (more than 30) so that they can offer the best solution to their clients. Today, there are more than 12,000 mortgage brokers in Canada who represent 27% of the market.)

(NB: I would like to be neutral on this issue, but since I am a mortgage broker, I want to let you know that I believe that a mortgage broker is the best person to deal with for a mortgage - taux hypothecaire. Otherwise, I would have gone into one of the other fields!

Of this you can be sure: the expertise and integrity of whatever consultant you work with will make a critical difference. Of course, there are expert local bank branch representatives, expert mortgage marketers and expert mortgage brokers. And then, there are many who do not fully understand this field.

It is the person in the position that is most important.

One thing is certain. It is the expertise and integrity of the advisor that will make the difference - taux hypothecaire. There are excellent local bank branch representatives, excellent mortgage marketers and excellent mortgage brokers. However, the opposite is also true.

The service of the person with whom you will work is most critical.

Mortgage brokering has become more popular

A survey by the CMHC showed that in 2004 more than 26% of home loans were financed with the help of a mortgage broker (taux hypothecaire). No matter what, it is the individual, his integrity and his expertise that will make the difference.

--
Gregory is an Accredited Mortgage Professional (AMP) with Mortgage Intelligence. If you need more information about Mortgage broker - courtier hypothecaire, visit: Hypotheque - Mortgage Intelligence

Source: http://www.articletrader.com ]]>