Money Matters Toronto

Do you have a mortgage in Toronto? Are you in the market looking for a mortgage right now? Here are 5 questions you should know the answer to about your mortgage.

Click here to view the article by Ellen Roseman in The Toronto Star

As expected the Bank of Canada announced this morning that they would leave the prime interest rate unchanged, citing economic development to be proceeding as expected. The Bank of Canada has also reiterated it’s commitment to keep the prime rate unchanged until at least July 2010,
pending controlled inflation. Click here to read the full Press Release.

What does this mean to you?
Your monthly mortgage payment will remain unchanged. There is very little risk of the prime rate changing over the next 9 to 12 months.

Should I lock in?
Surprisingly, very few people heeded our words of warning offered in the last Ratewatch to lock in. Rightly so! Although fixed rate mortgages spiked at the beginning of June, up to 4.49%, today you can lock-in around 4.19% and lenders are offering 3.99% on new mortgages. This means that it is only a matter of time before we will see the standard fixed 5 year rate below 4% again. With a very clear downwards trend of fixed rate mortgages and low risk of the prime rate changing, there is no need to lock in your variable rate mortgage at this time.

One of our favorite lenders Merix Financial is now offering 3.99% for a fixed 5 year mortgage through their exclusive mortgage broker channel in Toronto. The mortgage must fund before Oct 30th, 2009.

Merix Financial is a true leader in the Canadian mortgage market. Not only do they consistently offer the most competitive rates in the mortgage market, they also offer the most innovative products, like their 3 year variable rate mortgage (2.35%) and their awesome 50/50 mortgage . Not to mention they have excellent customer service.

Here are the Top 10 reasons to use a mortgage broker in Toronto:

#1- Get Independent Advice On Your Financial Options. As an independent mortgage broker in Toronto, I am no tied to any one lender or range of products. My goal is to help you successfully finance your home or property. I’ll start by getting to know you and your homeownership goals. I’ll make a recommendation, drawing from available mortgage products that match your needs, and together we will decide on what’s right for you.

#2- No Cost To You. There is no charge for my service on a typical residential mortgage transaction. So how do I get compensated? Like many other professional services, as a mortgage broker I am paid a finder’s fee when I introduce a creditworthy, dependable customer to a financial institution. These fees are quite standard and nearly industry – wide so that the focus remains on you, the customer. There is no personal gain for me if you choose one lender over another.

#3- Save Time With One-Stop Shopping. It could take weeks for you to organize all the appointments necessary to get to know the products and options differentiating the competing lenders in the market – and I know you’d rather spend your time house hunting! I work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. Together we can review the shortlist to make mortgage shopping fast, easy and convenient.

#4- Get Expert Advice. When it comes to mortgages, rates and the housing market I’ll speak to you in your language. I can explain to you the various mortgage terms and conditions so you can confidently choose which mortgage suit you best. As a mortgage broker I have successfully completed all 14 educational requirements of the ministry of finance.

#5- A Long Lasting Professional Relationship. The successful completion of your mortgage transaction does not mean the end of my commitment to you. Just like you use a professional like a dentist, doctor, financial adviser for your on going personal well being, I am part of your team to ensure that you continuously get the mortgage support and advice you need.

#6- More Choice Mean More Competitive Rates. I have access to a network of major lenders in Canada, so the options I can present to you are extensive. In addition to the Big 5 banks you are already familiar with, I also know what’s being offered by Credit Unions, trust companies, and other non-traditional sources.

#7- Ensure That You’re Getting The Best Rates and Terms. Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, doesn’t mean that you have to stop shopping! With so many lenders in the market let me explore what other options are available for you which may suit your needs.

#8- Get Access To Special Deals and Add-Ons. Financial institutions are always competing for your business, which is why they often offer incentive to attract creditworthy customers. These can include retail points programs, discounts on appliances, shopping club and more.

#9- Things Move Quickly. In mortgages, a lot of attention needs to paid to details. Every ‘t’ needs to crossed and ‘i’ dotted. My eyes have reviewed 100s of mortgage documents and I know where the pitfalls lie and what to look out for. I will make sure that your mortgage transaction takes place on time and to your satisfaction.

#10- We Negotiate On Your Behalf. People often get intimidated or bullied by their bank and don’t feel comfortable negotiating with them. As a mortgage broker I negotiate mortgages each and every day on behalf of my clients. You can count on my market knowledge to secure competitive rates and terms that benefit you.

ING Direct has introduced a new rate hold tool for Mortgage Brokers which allows ING qualified brokers to secure their clients excellent rates for 120 days.  The new rate hold for brokers tool only requires qualified mortgage brokers to submit a few details including the client’s contact information, and the approximate amount they want to borrow.

This is a great tool for borrowers and mortgage brokers alike. The trend in the mortgage industry has been towards the gradual elimination of pre-approvals and rate holds. The ING Direct rate hold tool for Mortgage Brokers allows the broker to secure a rate even if you are not ready to submit and application for a pre-approval or mortgage.

If you would like to secure a rate with ING Direct over the next 120 days give me a call to discuss. Christopher Molder 416.461.0204ext2 or email chris@tridacmortgages.com

Recently I have been getting a lot of questions and interest regarding the Merix 50/50 mortgage available for financing in Toronto. This product is only available through select mortgage brokers in Canada. The current effective rate for this mortgage is 3.37% for 5 years… an amazing deal!

The Merix 50/50 Wise Mortgage is a closed mortgage that lets borrowers take advantage of low fixed rate and low adjustable rate products all in one mortgage. 50% of the mortgage is in a 5 year fixed rate and 50% of the mortgage is in a 5 year Adjustable rate. The Adjustable rate can be locked in at any time to a fixed rate for the remainder of the term of the mortgage.

If you would like to find out more about this product and how you can use it, please call Christopher Molder, Toronto Mortgage Broker at 416.461.0204ext2.

Fixed rates are like one bullet.

Have you been burnt with a variable rate mortgage in Toronto in the past? Don’t think of variable rate mortgages as a long term strategy. There is a feature built into variable rate mortgages which allows you to lock into a fixed rate mortgage with no penalty and no extra cost.

Think about fixed rate mortgages like having one bullet in a gun. The moment you fire that bullet you forfeit the ability to lock in at any other rate. If you lock in off the get go, yes you are protected from rising rates but you also lose the ability to lock in at a lower rate… so lets look at the trend. At the beginning of July the fixed 5 year rate was 4.49%, at end of July the fixed 5 year interest rate was 4.39%, by the time August rolled around the rate was 4.29%, today most banks are posting a rate of 4.19%, today I can get you an approval  at 4.09%, and some banks are comfortable enough to sell you 3.99%… what does that tell you? Rates are coming down… so much so that the bank is comfortable enough to sell you 3.99% because they know that by the time you close your mortgage 3.99% is going to be the new norm.

If you had closed at any point during the last 2 months you would have forfeited the ability to lock in at a lower rate today or tomorrow.

Talk to me about our fantastic 3 year variable special 2.40%! Christopher Molder 416.461.0204ext2

Toronto Interest Rates

Fixed 3year – 3.39%

Fixed 5year – 4.09%

Variable 5year- P+.30% (2.55%)

Variable 3year – P+.15% (2.40%)

Canadian 5 yr bond yields -0.06 bps to 2.56 – Four weeks ago it was 2.67%. The spread, based on 5 yr fixed rate mortgage of 4.29%,  is at 1.73%.

Pressure on fixed 5 year: down
Financial Post – Markets

Lenders typically like to keep a NEW spread of 1.65% to 1.85% between their fixed five year rates and the current 5 year bond yield. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.