Personal Finance

Mortgage Matters and Rates

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  • Mar 8th, 2011 8:04 am
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Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada

Mortgage Matters and Rates

I have been securing & funding Residential Mortgages for home buyers for past 15 years. My clients & products include:
1. Self employed, Business for Self
2. New Immigrants
3. First Time Buyers
4. Repeat Buyers
5. Refinance to pay off debts
6. Home equity Line

I work for a Bank as a Mortgage Specialist but my answers will be impartial.

I am here to answer questions and suggest how you can approach your Financial Instutions on Mortgage Approval, mortgage realted questions, & Mortgage Rates.

Ask away?


Please ask me questions on Residential Mortgage approval related issues?

Your situation could be that you are self employed, business for self, new immigrant, refinancing to pay off debts, or First Time home buyer and looking for some guidance to secure financing for home purchase.

I have been in the industry over 15 years & my answers may help you dealing with YOUR FINANCIAL INSTITUTION on your Home Financing loan approval.
19 replies
Sr. Member
User avatar
Aug 31, 2008
721 posts
1203 upvotes
North of T.O.
surendran1000 wrote: Govt of Canada is implementing several changes to High Ratio insured mortgages as of March 18, 2010.
Refinancing for equity take out is limited to 85% of property value. Many refinance to pay off other unsecured debts.

Anyone has a question on how this affect them?

I am not sure what I need to ask other than I have about 20,000 worth of debt (not quite but rounded up) and I have a variable closed 5yr mortgage, sitting at 2.50 percent right now with RBC, I want to roll this debt into my mortgage very soon as the 0 percent balance transfer I did through RBC is over in May. Is this generally easy to do? I purchased my home in 2004 and I owe 119,000 right now, down from 156,000 when I purchased it.

Thanks,
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
Halifax55 wrote: I am not sure what I need to ask other than I have about 20,000 worth of debt (not quite but rounded up) and I have a variable closed 5yr mortgage, sitting at 2.50 percent right now with RBC, I want to roll this debt into my mortgage very soon as the 0 percent balance transfer I did through RBC is over in May. Is this generally easy to do? I purchased my home in 2004 and I owe 119,000 right now, down from 156,000 when I purchased it.

Thanks,

You seems to have good equity in your home. RBC offers "Homeline" in which one can mainatin 5 different credit segments including mortgage and credit lines. If you qualify it will be easier to roll this into your existing mortgage.
Sr. Member
User avatar
Aug 31, 2008
721 posts
1203 upvotes
North of T.O.
surendran1000 wrote: You seems to have good equity in your home. RBC offers "Homeline" in which one can mainatin 5 different credit segments including mortgage and credit lines. If you qualify it will be easier to roll this into your existing mortgage.
Thank you for that, I guess there are fees, RBC tried to talk me into this when I last renewed my mortgage, in order to get "rid" of this debt (roll it up or in) I will need to go in and negotiate another mortgage, most likely a fixed one as my variable closed has just over 2 years left. This is all so darn confusing so I do appreciate any advice, I don't want to pay fees if at all possible, and wonder what does a home appraisal cost and look like?

Thanks very much!
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
Halifax55 wrote: Thank you for that, I guess there are fees, RBC tried to talk me into this when I last renewed my mortgage, in order to get "rid" of this debt (roll it up or in) I will need to go in and negotiate another mortgage, most likely a fixed one as my variable closed has just over 2 years left. This is all so darn confusing so I do appreciate any advice, I don't want to pay fees if at all possible, and wonder what does a home appraisal cost and look like?

Thanks very much!

Actually pretty staright forward. You can increase your current mortgage amount by the debt that you want to refinance for the balance of term, until 2 years. You do not need to break the term of the mortgage. It is also possible to keep the same rate, please ask. This feature is called "Port and Add On". The appraisal fee at RBC might be about $190. There may be fees for refinancing which you can also negotiate. This fees is for cost of registering new mortgage amount. Your current business relationship number of products that you have with the Bank will enable your banker to, if possible, absorb some cost. Good luck.
Sr. Member
User avatar
Aug 31, 2008
721 posts
1203 upvotes
North of T.O.
surendran1000 wrote: Actually pretty staright forward. You can increase your current mortgage amount by the debt that you want to refinance for the balance of term, until 2 years. You do not need to break the term of the mortgage. It is also possible to keep the same rate, please ask. This feature is called "Port and Add On". The appraisal fee at RBC might be about $190. There may be fees for refinancing which you can also negotiate. This fees is for cost of registering new mortgage amount. Your current business relationship number of products that you have with the Bank will enable your banker to, if possible, absorb some cost. Good luck.
Thanks so much for your advice.
Sr. Member
Jun 3, 2005
852 posts
2 upvotes
just curious where did you buy the house for 156000 ?
Shiiii.....................
Sr. Member
User avatar
Aug 31, 2008
721 posts
1203 upvotes
North of T.O.
I own a small 2 bedroom, 1088 square ft townhouse, mostly brick, some siding on back upper half, on small discreet Court. Year of build: 2001
Newbie
Feb 16, 2011
81 posts
5 upvotes
gta
i have a question

i am being offer either mortgage open variable P+0.25% = 3.25% for 3 years term

or

line of credit P + 0.5% =3.50% <~ i have heard someone got P+0% = 3.00%


my question is what's the difference line of credit or mortgages? from what i know line of credit basically is i can get the cash and spend it on *anything i want* but mortgage is for condo/property until i buyout/payoff the owing balance from the bank

my borrow amount is $300,000.00

at this moment i can pay all for this property that will be closing around MAY


the reason why i am borrowing money because i want to hold extra cash on hand
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
ghset wrote: i have a question

i am being offer either mortgage open variable P+0.25% = 3.25% for 3 years term

or

line of credit P + 0.5% =3.50% <~ i have heard someone got P+0% = 3.00%


my question is what's the difference line of credit or mortgages? from what i know line of credit basically is i can get the cash and spend it on *anything i want* but mortgage is for condo/property until i buyout/payoff the owing balance from the bank

my borrow amount is $300,000.00

at this moment i can pay all for this property that will be closing around MAY

the reason why i am borrowing money because i want to hold extra cash on hand
I assume your question is what is the difference between line of credit & variable rate mortgage?

Mortgages loan will have a set monthly/biweekly/weekly payment which includes Principal and Interest.
Line of credit -- minimum payment is monthly interest. The minimum payment will not include any amount to pay down the loan.

SURENDRAN1000
MTG SPECIALIST.
Newbie
Feb 16, 2011
81 posts
5 upvotes
gta
surendran1000 wrote: I assume your question is what is the difference between line of credit & variable rate mortgage?

Mortgages loan will have a set monthly/biweekly/weekly payment which includes Principal and Interest.
Line of credit -- minimum payment is monthly interest. The minimum payment will not include any amount to pay down the loan.

SURENDRAN1000
MTG SPECIALIST.

sorry my mistake my borrow amount from the bank is $200,000.00

currently i do have cash to pay off the property which is $300G.

the reason i am borrowing money is just incase something happen that i have liquid cash on hand, basically i am saying i do have $300G cash on me to buyout the property that i will be closed on MAY

if you were me what option do you consider going for mortgage for 3.25% or line of credit 3.50% or just basically pay off and sell it at once??

just want to get some thought/advice
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
ghset wrote: sorry my mistake my borrow amount from the bank is $200,000.00

currently i do have cash to pay off the property which is $300G.

the reason i am borrowing money is just incase something happen that i have liquid cash on hand, basically i am saying i do have $300G cash on me to buyout the property that i will be closed on MAY

if you were me what option do you consider going for mortgage for 3.25% or line of credit 3.50% or just basically pay off and sell it at once??

just want to get some thought/advice

I am sure what is your intention of purchasing this home? your comment "pay off and sell it once". I can not guess what your intention is.
If you are purchasing to sell it off in a very short period then get line of credit.

if you are planning on living in the home for a few years then mortgage would be better. A variable closed mortgage can be obtained at Prime - 0.75 or less.

Again, if you are not planning on living in the home then Line of Credit is okay because there will be NO prepayment charge applicable when paying it off.


surendran1000
Mortgage Specialist (bank)
Newbie
Sep 4, 2009
10 posts
Toronto
Hi There

I have a question. I will be buying a property in which the close date will be BEFORE the close date of my existing property.

In these cases most people just take out a "bridge loan" but i heard that interest and admin fees on them can be quite high.

What would be the benefit or difference with someone just taking out an "Open" variable mortgage versus a Bridge Loan ? I heard open mortages have lower interests and u don't need to pay it off completely after u close.

Any comment ?
Newbie
Feb 16, 2011
81 posts
5 upvotes
gta
surendran1000 wrote: I am sure what is your intention of purchasing this home? your comment "pay off and sell it once". I can not guess what your intention is.
If you are purchasing to sell it off in a very short period then get line of credit.

if you are planning on living in the home for a few years then mortgage would be better. A variable closed mortgage can be obtained at Prime - 0.75 or less.

Again, if you are not planning on living in the home then Line of Credit is okay because there will be NO prepayment charge applicable when paying it off.


surendran1000
Mortgage Specialist (bank)

i might sell off after closing in MAY

my bank offer me to do mortgage for variable open 3 year term P+0.25% = 3.25%

i told my bank i would like to do line of credit for P+0.5% =3.50%

BUT she said mortgage is better for me.... clueless why??? comment?

my case i do have liquid cash of $300G to pay off my closing in MAY. for my CONDO

the reason i am borrowing money from the bank for $200G because i want extra cash on hand and rate are historically low...

at this moment i am confused..also undecided what to go for either 'line of credit' or 'mortgage variable 3 year terms open'

right now the bank told me to go for vairable open ..why the bank want me to do that??
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
ghset wrote: i might sell off after closing in MAY

my bank offer me to do mortgage for variable open 3 year term P+0.25% = 3.25%

i told my bank i would like to do line of credit for P+0.5% =3.50%

BUT she said mortgage is better for me.... clueless why??? comment?

my case i do have liquid cash of $300G to pay off my closing in MAY. for my CONDO

the reason i am borrowing money from the bank for $200G because i want extra cash on hand and rate are historically low...

at this moment i am confused..also undecided what to go for either 'line of credit' or 'mortgage variable 3 year terms open'

right now the bank told me to go for vairable open ..why the bank want me to do that??


I am not sure what your question is?
Narrow it down to what you want to do and ask so that I can help.
Bank may have advised you to go Variable open based on what you have told them.
Again, If you do not need the mortgage don't take it.
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
kamiomat wrote: Hi There

I have a question. I will be buying a property in which the close date will be BEFORE the close date of my existing property.

In these cases most people just take out a "bridge loan" but i heard that interest and admin fees on them can be quite high.

What would be the benefit or difference with someone just taking out an "Open" variable mortgage versus a Bridge Loan ? I heard open mortages have lower interests and u don't need to pay it off completely after u close.

Any comment ?

Take the bridge loan -- this is a temporary loan.

Cost is very much higher to set up a Open Variable mortgage as opposed to a Bridge loan.

Bridge loans are almost like personal loan so that rate is higher. Again bridge loan is temporary for few days or maximum 60 days until your sale is closed.

Bridge loans are taken on the property that you are selling to raise funds required for down payment on your new purchase.


I hope this will help.
Newbie
Sep 4, 2009
10 posts
Toronto
surendran1000 wrote: Take the bridge loan -- this is a temporary loan.

Cost is very much higher to set up a Open Variable mortgage as opposed to a Bridge loan.

Bridge loans are almost like personal loan so that rate is higher. Again bridge loan is temporary for few days or maximum 60 days until your sale is closed.

Bridge loans are taken on the property that you are selling to raise funds required for down payment on your new purchase.


I hope this will help.


Do u know what the standard rates are for Bridge Loans right now ?

what are the costs associated with opening up a open variable mortgage ? there are initial costs as well to open a bridge loan too i would imagine

thanks
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
kamiomat wrote: Do u know what the standard rates are for Bridge Loans right now ?

what are the costs associated with opening up a open variable mortgage ? there are initial costs as well to open a bridge loan too i would imagine

thanks
Bridge loan rates are not standard -- it could be between 7% to 14%.

Open Variable Mortgage is a Mortgage. Lawyer need to register it & this includes lawyer fees & drawing up mortgage contract fees, registration fees, it is almost taking a new mortgage. And when you pay off there may be a discharge fees.

For temporary purposes Bridge Loan is fine.
PLEASE ASK YOUR FINANCIAL INSTITUTION OF THE COST OF BRIDGE LOAN & COST OF SETTING UP A MORTGAGE.
Sam Surendran
Residential Mortgage Specialist (Bank)
Good Advice To Meet Client Needs and Fast Approvals
Newbie
Mar 4, 2011
37 posts
3 upvotes
Toronto GTA, Canada
surendran1000 wrote: Bridge loan rates are not standard -- it could be between 7% to 14%.

Open Variable Mortgage is a Mortgage. Lawyer need to register it & this includes lawyer fees & drawing up mortgage contract fees, registration fees, it is almost taking a new mortgage. And when you pay off there may be a discharge fees.

For temporary purposes Bridge Loan is fine.
PLEASE ASK YOUR FINANCIAL INSTITUTION OF THE COST OF BRIDGE LOAN & COST OF SETTING UP A MORTGAGE.

What is the best rate 5 year closed variable?

Now one can easily get 5 year closed variable at (Prime - 0.75) to (Prime - 0.85) depending on the lending institution. Pricing is determined by number of other products one will hold with that Lender.

Any thoughts?
Sam Surendran
Residential Mortgage Specialist (Bank)
Good Advice To Meet Client Needs and Fast Approvals
Deal Addict
User avatar
Apr 6, 2008
1613 posts
125 upvotes
Toronto
ghset wrote: i might sell off after closing in MAY

my bank offer me to do mortgage for variable open 3 year term P+0.25% = 3.25%

i told my bank i would like to do line of credit for P+0.5% =3.50%

BUT she said mortgage is better for me.... clueless why??? comment?

my case i do have liquid cash of $300G to pay off my closing in MAY. for my CONDO

the reason i am borrowing money from the bank for $200G because i want extra cash on hand and rate are historically low...

at this moment i am confused..also undecided what to go for either 'line of credit' or 'mortgage variable 3 year terms open'

right now the bank told me to go for vairable open ..why the bank want me to do that??
If I understand your question correctly, you are buying a condo in 15-45 days time and would like to sell off the same in May. It that's the case, then you should go with the HELOC option rather than variable open as even with variable open, some banks may have admin fee for paying down the mortgage completely in the very first year. But then again it depends on the bank you are dealing with. Even if you do not sell the condo, you can still pay down the HELOC with the extra cash you have and save in interest costs and can also have access to the money should you need it again. You can not do this with variable open mortgage. If your bank does not give you HELOC at prime +0.5, then go with National Bank's ALL IN ONE program and you will get the rate of prime+0.5% through a broker.

Good Luck.
Pramod Chopra
Mortgages and Investments

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