Any mortgage specialists in the house?

[KyleM]

I have a few questions.....

Gettin royally screwed around with TD tryin to set up a mortgage.

 

Any virgin home purchasing tips are always welcome.

[scuro]

I have a few questions.....

Gettin royally screwed around with TD tryin to set up a mortgage.

 

Any virgin home purchasing tips are always welcome.

 

-buy with 25% down...it saves you a chunk of change.

-look around...I've had a few mortgages, sometimes there is a real difference.

-if credit history is a problem, I have heard that BMO is the best to deal with.

[holdfast]

Yup shop around definately. Im no Morgage specialist but I did alot of Reading 12 years ago and went with this Attitude. Pay as Much as You Possibly can While you are Younger and Working. Ask my Wife, we lived day by day and suffered ie bought a Hyundai Pony instead of an SUV, a canoe for 20 years instead of a power boat, a snow shovel instead of a snowblower. But its all worth it as my house is payed off in 2 yearsfrom now. Im working where I want. I have a trailer 3 hours north, drive a power boat, and own a Ford Ranger truck. Only because I went with a 15 year Morgage instead of a 25 or 30 year. My only regret is that I never bought earlier in life. I would say buy now or you may end up like a lot of people (over Seas) buying hoping your Kids , Kids are going to finally own the house long after your worm food.

[holdfast]

One last thing. We also went with the 5 year rates for a piece of mind. If we went yearly we would of saved thousands. But you never know what may happen to interest rates. Its killed people before here in Canada, and now look at some places in the states. Again Im not no Morgage specialist, but read up on it and get different opinions, not just your Banks. Of course we were never Millionaires either or borrowed or given money from family or friends. We had to dig deep. Good luck on your first house and pay for a home inspector no matter what your agent says because your still stuck with the morgage.

[Clampet]

Have yer wife an yerself borrow 20K each from the bank as an RSP.

Combine the 2, to make a 40K deposit on the house.

Now you have a 15 year interest free loan which acts as a tax shelter, as well as a device to lower your yearly taxable income.

[pikehunter]

Bridgewater Bank or Bridgewater Financial in Calgary is decent to deal with.

[kayak fisher]

I have worked for several large mortgage lenders. What is your question?

[kayak fisher]

send me a pm if you like

[Gerritt]

BMO (MCap) gave us the best rate when we first did our mortgage... when the mortgage came up for renewal we shopped around, and Wound up getting the best rate through Wells Fargo..

 

You best bet in purchasing a first home would be to use a mortgage broker, they will find the best rate for you.. and you dont pay them a dime; The mortgage companies pay them.

 

Not sure if this applies in AB or not.. but wait until after January as Land transfer taxes will be eliminated for fist time buyers... atleast here in Ontario..

 

I should add paying off your mortgage bi-weekly will pay do your mortgage ALOT (Years) quicker... go for 5 yr fixed.. then in 5 years shop for a better rate...

 

 

G

Edited December 16, 2007 by Gerritt

[OhioFisherman]

Definitely not a specialist and I no longer have a mortgage. Go in with as much money down as you can, I never bought a home without 20% down at least.

 

Unless you are able to predict the future don`t get a variable rate loan.

 

Stuff happens, don`t mortgage yourself to death, save money and try to have a years payments in the bank.

 

Don`t buy a home because you want to, make sure you can afford it.

 

15 year loan will save you a bunch of interest, 10 year even more.

 

LOL I have had 2 new cars, 1 in 73, 1 in 79, a home that was paid for was more important, I didn`t need a new car to park at work, a beater usually got me there and back.

 

1 new boat in 89, you can catch fish without a new boat and be able to afford to go more often.

 

Study the mortgage crisis here in the states, most seem to have leaped without looking, 94% increase in foreclosures since the same time last year. Home values in a lot of area have dropped, like 2.4 million homes being foreclosed on have flooded the market.

 

The biggest investment in most people lives, do it wisely. Nice to be able to keep a roof over your head if you become unemployed or disabled, I haven`t worked since 2003. Still could afford the home.

[Cookslav]

Kyle,

 

I'm no Mortgage Specialist but I can tell you I've been getting the run around from TD these last few months as well....

I just sold my home, and bought a new one closing on the 28th of this month.

Hard ball is the only way to play those Jerks.

Get rates, and terms from every institution in town and then some....then play them against each other.

Use your RRSPS, and accounts as leverage as well.

Or better yet...

Higher a broker to do that for you...it costs you NOTHING!!!!

(the banks pay them)

 

As for TD Canada Trust...If I had the time, and could get a better rate I would go ANYWERE else!

But that is a personal/personnel service "thing" that’s got me pissy with them.

 

My advice which may or may not apply...

DO NOT LOCK IN for more then a year right now unless you can swindle 5% or less...you'll kick your self later.

The banks just lowered prime in an attempt to halt the Canadian dollars climb, and it didn't even slow it down.

The dollar is expected to climb again over the next year as high as $1.10/US, after a slight post Christmas slump.

(Trust me friend that rate is going down over the Spring/Summer. )

 

The banks are well prepared to drop the rates further to slow it down as it rises.

You have 90 days to lock a rate and of course if the rates drop, you can re-lock a lower rate.

 

On the flip side...and I am wrong

The penalty for breaking your mortgage 6 months into a 12 month term is pretty minimal....

If you locked in at 5% for a year, and the rates started to climb, you can break the mortgage, pay a couple grand on the top of the new mortgage, and lock in at a safe rate your comfy with and not feel any major pinch.

 

I was lucky enough to get 5.005% rate for a one year fixed term as of this past Wednesday....not a bad rate considering the posted rate is 7.59% for 5 years closed.

A few percent may not sound like much but that 2% discount lowers my payments by $200 bi-weekly so now I just apply that extra $200bi-weekly to the principle....and whammo! I just cut years off the mortgage balance.

So I plan to watch the rates like a hawk this year, and then lock in the lowest rate I can between October and November 2008 for my next term....hopefully those rates will be low enough I will feel comfortable to lock in for 10 years and be done with paying a mortgage

 

Some good news for home owners came this summer as well.

The CHMC just changed their policy this past summer lowering their exclusion rate to 20% from 25% which is nice but for most first time buyers that doesn't help much considering the Average down payment people can afford is 5%

And the CHMC fee is 3.75%(last time I checked)

 

Good luck bud,

[Cookslav]

Its funny that most people say go in with as much of a down payment as possible....its totally true, and I don't disagree, but I am quick to point out that having to take a higher interest rate, on a "No down payment Mortgage"

is still better then renting by about 100% IMO

 

Its always better to be earning equity back into your own pocket then paying a land lord...even if it is a slow climb.

I bought my first house for $118,000 on a no down payment mortgage, and paid an 8.5% interest Rate when the posted rate was about 6%

 

I took out a line of Credit at 9% interest, and renovated the house top to bottom...

put in a new Gas Fireplace, high efficiency furnace, Central air, New roof, upgraded the electrical panel to 120amp service with breakers(was fuses) Put in a dishwasher, all new High efficiency windows, all new ceramic & Laminate floors, New Toilets, and Bathroom vanity, an awning off the deck, and basically painted the cupboards and styled the place up a bit.

I did it all myself with the help of my Brothers, and Father over the past 5 years.

 

3 years into my term the rates dropped to 4% so I broke the mortgage, and paid a $3000 penalty to do so.

I put the penalty and the balance of my line of credit off onto the new mortgage at 4%.

 

That consolidated my debt, but dropped my biweekly payments $200!!!

I then maintained my original payment level(putting that $200 biweekly directly on the principle)

For the past 2 years and paid my mortgage down significantly....

 

I just sold that same house for $221,000 5 years later, and walked into my new home with a $130,000 down payment.

 

Like I said...

Your WAY better off getting into the Market then you are paying some one else’s mortgage.

There are very few investments someone can make that will pay off better then Real estate right now.

 

That’s my 2 cents

[lookinforwalleye]

Personally I have been a customer of TD for 25+ years and have no complaints.

 

I would agree on the lenght of term,the trend looks like it is down you may get a better rate in a few months.

 

Just my thought on mortgage brokers just be careful I know a couple brokers and one will get you a big mortgage that you can`t afford and the other will set you up with a mortage that makes sense for your situation.

[JohnF]

I've been a realtor in Ontario for 32 years so I guess that qualifies me as something of an expert. In my experience it's not the major banks like TDCT that are the problem, it's the people you have to deal with locally. Sometimes they're new at the job, sometimes just overly concerned with CTOA (covering their own a--), and sometimes they just haven't explained the options etc to you as well as you need.

 

PM me if you want to talk specifics. I'd be happy to help out any way I can. Especially today as we're getting dumped on and I have no plans to go outside except to blow snow.

 

JF

[crappieperchhunter]

I agree 100% with JohnF. It's not the institution just the particuliar idiots you maybe dealing with. That goes for any business not just banking. Sniff around and get as informed as you can...for most of us it is the single biggest purchase you will ever make.

 

Kyle I sent you a PM. Just let me know if Debbe can answer any questions for you, and good luck with everything.

[Guest skeeter99]

go with a variable rate mortgage

 

will save you thousands of dollars

 

 

if the rate does go down in the new year your rate through a variable drops also

 

and if the rates get higher and you feel a little uncomfortable you have to option to lock in at any time

 

it is a fact that variable rate mortgages save you more money in the long run (banks wont tell you that) my friends wife is a bank manager an even she says variable rates are the way to go, less money to bank in turn saves you money

 

my tourney partner has a master degree in business and finance and even he says it is the way to go

 

even when I renewed from my fixed mortgage, the girl looked at me and said wow you are not the norm people would rather pay a fixed amount and pay more for their house etc.. than a variable rate that would save in my case $27000 roughly as compared to a fixed rate mortgage over the life of the mortgage

 

and this is a fact ***the variable rate has only been higher than a posted rate in a 5 year term 2 TIMES IN 50 YEARS **and it was only for a month each time !!!

 

 

yes your payment will vary at times mine only 22 dollars, but this is math and the numbers betweeen fixed and variable on interest paid are quite alot different

 

you have to look at the big picture

 

but !!!!!

 

if you are a first time home borrower without 20% down your mortgage is guaranteed by chmc (yes there is a fee) hence they will not allow you to have a variable rate mortgage, but after (not sure) 5 years maybe less depending if you got 3 or even 1 year etc... you can go out and get any mortgage you wish

Edited December 16, 2007 by skeeter99

[crappieperchhunter]

I personally think the soundest advise that anyone can give about saving $$$$ on mortgages is start out with a 15 year ammortization instead of the standard 25. If you find things a little tight you can always change the ammortization latter to give you move freedom. But my experience is you always scrounge up enough money to pay the mortgage...you may not have a few toys that others have....but you can sure treat yourself down the road when you are mortgage free after 15 years instead of 25.

[KyleM]

Wow, thanks a bunch guys this is all good info.

 

Howd you know it was a service thing with TD?

I get a different answer from everyone in the building (when they actually pick the phone up)

 

I cant wait long enough to save up 25% on a 240-300k home.

If I dont get in within the next couple months, I will never own a home here.

Prices are low, there is a glut of homes on the market right now.

Once they are snagged up, everything will shoot up another 40% again (its a regular 5-6 year trend here)

 

 

Like cookslav said, its better then puttin money into the landlords pocket.

[SlowPoke]

I agree with skeeter 100% regarding fixed vs. variable.

I believe he is also correct about CMHC regs, without 20% (was 25%) equity you are required to hold a 5yr term fixed rate.

Don't sweat the low down payment or the amortization.

A high down payment and 15 yr amortization will save you lots of borrowing costs but could cost you peace of mind. When we bought we went with about 8% down over 25 yrs. This afforded us the option of my wife staying home with the kids for 8 years. It's now been 10 yrs 7mo and we will be mortgage free in 4 more years by making subtle changes at our first renewal (variable rate capped), paying bi-weekly and switching to full varible rate at our second renewal.

You can have your cake and eat it too by learning for yourself which mortgage product will work best for you.

-Brian

[bigfish1965]

I had less than 25% on my home and wasn't required to have a five yr term. Was on a variable till interest rates got to 4.5% and locked it in for three years.

Best I can do now for five yeers is 5.65% through ING Direct.

I will be putting as little down as possible on my next house..here's why..

My current RPP earns me around 12% (average five yrs) each year. If I put the money there instead of in my house I get a better return at current interest levels. So I can keep rolling the cash that is in the RPP over untill I get to the point where interest rates catch me and then take the money and dump it back into the mortgage. Wage inflation also helps reduce the mortgage cost each year.

 

It is tricky and there's many ways to do it.

[pigeonfisher]

i signed my last one ( a second mortgage) at 5.25%. The new one in the states which is higher interest will be in the neighbourhood of 6%.

 

I agree with Rick. Use your money, cash is best spent making cash or making fun.