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Mortgage Renewal Question

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  • Aug 12th, 2013 8:54 pm
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Deal Guru
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Mar 31, 2008
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Mortgage Renewal Question

Hi all,

My wife and I have our mortgage renewal coming up soon.

Currently:
Scotia
Closed 3-yr Variable = Prime - 0.75
Expires: Sept 27, 2013

Mortgage since 2006.

Question 1: Since we got married a few years back, I didn't get my name added to the Deed of the house. So far, for mortgage purposes, my name isn't on anything either.

Would it be better (more leverage to get a 'better' than posted rate) if I sign on as a co-signer for the mortgage thus getting the benefit of my income being recorded/credit score (>800), or it won't really make a difference given my wife's good/adequate credit score, and history of already having a mortgage?

Question 2: Seems like Fixed rate is the way to go nowadays? Given the small spread between Fixed vs Var, and rising short-term rate pressure?

Thanks in advance!
3 replies
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Sep 13, 2011
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Providing your wife qualifies on her own, your income or credit will have no impact on the rate or approval at all.

A few months ago, there was no question fixed was the way to go and it had been that way for the past few years. Now we are starting to see deeper discounts on variable rate mortgages and higher fixed rates increasing the spread between them. Lowest variable rate right now is prime -0.55% (2.45%) compared with the lowest 5 year fixed rate of 2.99% (30 day quick close with limited prepayment privileges). Lowest 120 day close is 3.19%. The question is... is the discount deep enough to justify going with a variable rate? I personally think it is right on the border, so it really comes down to whether you are comfortable with more risk (variable rate) or if you are more comfortable with the security the fixed rate has to offer.

One thing we no for sure is that the global economy isn't going to be improving any time soon and as long as we are in this situation, rates will most likely remain relatively low. Prime rate hasn't changed since September 2010, although anything can happen of course.
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
Deal Guru
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Oct 24, 2012
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at1212b wrote: Question 1: Since we got married a few years back, I didn't get my name added to the Deed of the house. So far, for mortgage purposes, my name isn't on anything either.
No
Good for you, your wife makes a load of money to qualify alone.
Or you guys bought a really cheap house.
Either way, you guys are financially responsible!

In the end, you may want to be added to the deed for "unpleasant" unforseen events, such as divorce. If you pay half the mortgage, it may as well be fair that it is official.
As it is, you aren't on the deed OR the mortgage (you can be on either one without being on both). So in case of splitsvilles, you'd get NOTHING since she probably had the house before you came in the picture ;)
But that's between you and her. Leave the poor bank employee out of that discussion okay? I've been that bank employee before and it's really... awkward when some gold dig'ee comes in with his/her gold dig'er asking if it's a good thing to add gold dig'ee as joint owner to whatever account.

at1212b wrote: Question 2: Seems like Fixed rate is the way to go nowadays? Given the small spread between Fixed vs Var, and rising short-term rate pressure?
Fixed is the way to go, not because of rising rates pressure, but because there isn't a big discount on variable anymore (I got prime - .90% for another 3 years!!! YAY!!!).
You'd be lucky to even get prime - 3%.
Deal Guru
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Oct 24, 2012
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AaroAari wrote: If in Ontario and this is the matrimonial home, it's still divided equally regardless if she owned the house before he came in or if he pays nothing into the mortgage. ;)
Gold digger's heaven!

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