Mortgage Blog - Mortgage Products
What You Should Know About Your Mortgage
July 23, 2010 by Dania Spillett
As Fiona Anderson of the Vancouver Sun writes, mortgages are about more than just the interest rate. This is definitely true although rates tend to still be considered the biggest and most important factor. With interest rates still being at near historically low levels, even after the Bank of Canada increased the overnight interest rate, now is still as good a time as ever to apply for a mortgage. As I mentioned in a previous blog, adjustable rate mortgages will change as the Bank of Canada increases rates but fixed rates follow the bond market. With yields currently at a ...
Read more »Benefits of Portability
June 29, 2010 by Dania Spillett
Many mortgage holders forgo certain mortgage features in favour of a lower interest rate . If this is your strategy, and if you’re planning on moving before your mortgage term is up, you may want to make sure portability isn’t one of the features you’re giving up.
A portable mortgage is one that allows you to transfer your existing mortgage — with all its terms and conditions — to a new property. So if interest rates are going up, you can keep your existing rate on your new home. If the new property costs more than the first, the extra ...
Read more »Have You Considered Mortgage Prepayments?
June 25, 2010 by Dania Spillett
People tend to be concerned with the length of amortization on their mortgage and think, “35 years? That’s way too long to be paying for my house.” Ultimately, the amortization you choose while applying for financing is not the be all, end all. If you choose to get a longer amortization, the lenders will approve you for a higher mortgage amount. This means you will have more flexibility when searching for the ideal home. If you apply for a mortgage with an amortization of 20 years, you might only be pre-approved for $250,000 (depending on your down payment ...
Read more »Benefits of Non-Bank Lenders
June 21, 2010 by Dania Spillett
If Canada’s five chartered banks were the only institutions allowed to lend money in the form of mortgages in this country, rates would be sky-high, and the selection of mortgage products would be rather slim. Thankfully, we have non-bank lenders to keep the Big Banks on their toes. While these lenders may not invest the same number of dollars in fancy advertising campaigns, they’re nevertheless an excellent option for savvy consumers who are looking for a good mortgage deal.
Because non-bank lenders don’t have to support the overhead costs of brick-and-mortar branches, and instead opt to go ...
Read more »Get the mortgage facts - don't "zone out"!
March 4, 2010 by Gordon McCallum
I happened to come across a very interesting article about mortgages and how most Canadians completely tune-out the important details of their mortgage.
Everyone seems to want to know the interest-rate, because that’s the score-card I guess, but beyond that most people don’t seem to care or appreciate the finer points, things like:
- Amortization period
- Pre-payment privileges
- Accelerated payment options
- Early repayment penalties
- Assumability
- Portability
- Bona-fide sales clauses
- etc.
There is a lot of fine print out there folks, so I’m not going to be bashful about this: If there’s something you don’t understand or ...
Read more »New Canadian Mortgage Rules
February 14, 2010 by Gordon McCallum
Wow – a very exciting morning to say the least. The mortgage and housing industries are abuzz with news from Finance Minister Jim Flaherty about new mortgage rules in Canada.
As a quick summary, here are the new rules:
1. First-time buyers need to pass a new qualification test: can you afford this home at the 5-year fixed rate?
The basic premise here is that some first-time buyers choose a variable or adjustable interest rate which floats, or a shorter term fixed rate that will need to be reset once the term is up. The danger there is for first-time buyers ...
Read more »Canadian Mortgage Lessons for America
January 25, 2010 by Gordon McCallum
I just read a great analaysis by the Financial Times by Robert Pozen of the key differences between the Canadian and US housing markets.
Pozen gets into the three main differences between the two systems, which he contends are the largest reasons why the Canadian real estate market has stayed relatively strong when compared to the utter collapse of real estate markets in many US States.
The three biggest differences, according to Pozen are as follows:
1. Canadian lenders require at least 5% down, and often more, in order to purchase a home. (I guess nobody told him that lenders ...
Read more »The Variable Rate Is a Great Deal - Or Is It?
October 15, 2009 by Gordon McCallum
If you’ve followed our blog for very long you probably know that we’ve been big fans, at least intellectually, of the variable and adjustable rate mortgage products out there.
Realistically, it’s hard to ignore the widely reported facts from the York University study done by Moshe Milevsky that cemented the variable as a money saver, nine times out of ten over fifty years.
That said, these are unusual times. We always ask the people we’re working with if they can “sleep at night” knowing that their interest rates and payments might go up. Surprisingly, most Canadians ...
Read more »Adjustable Rate Mortgages and Variable Rate Mortgages
September 23, 2009 by Gordon McCallum
What’s the difference between Adjustable Rate and Variable Rate?
If you’re thinking about opting for a floating mortgage that is influenced by the Prime rate, rather than a fixed-rate mortgage, you might be surprised to know that there is more than one option available.
Adjustable Rate Mortgages change when Prime changes. This can be as much as eight times per year—when the Bank of Canada makes its scheduled announcements. Depending on the Bank’s decision, your monthly mortgage payments can increase, decrease or remain the same.
Variable Rate Mortgages are still reliant on Prime but, depending on ...
Read more »Tips for Paying Off Your Mortgage Faster
August 26, 2009 by Gordon McCallum
While it may seem like a gargantuan task right now, one day you will be mortgage-free. To help that day come a little sooner, abide by some (or all) of the following steps:
1. Make a payment more than once a month.
While it may take a little bit of getting used to, paying weekly or bi-weekly rather than once a month can save you thousands in accumulated interest costs and shave years off the life of your mortgage.
2. Pay the five-year fixed rate on your variable rate mortgage.
Historically speaking, variable rates have generally remained significantly lower than ...
Read more »Recession Mortgage Blues? Get a Helping Hand...
August 25, 2009 by Gordon McCallum
Times are tough right now for some—and many Canadians are feeling the pinch. If you’ve recently found yourself in a financial position that could prevent you from making your mortgage payments, it’s important to know that there are resources available to help you.
Canada’s lenders and mortgage default insurers have recently ramped up their efforts to assist homeowners. If you think you might be on the brink of missing a mortgage payment, it’s best to contact your lender right away.
Some of the mortgage default insurers have expanded their home ownership assistance programs to assist ...
Read more »Should You Refinance?
August 24, 2009 by Gordon McCallum
With the recent Bank of Canada interest rate cuts , and the noticeable savings passed down by the banks, the thought of refinancing has probably crossed your mind. But does it make sense to pay a hefty penalty to get out of your current mortgage?
Well, that depends. To figure out if it’s truly worth it, you’ll have to employ a bit of math – is the cost of the penalty less than the amount of money you’re going to save? If you’re looking to free up some cash, and you’d be saving more in the long ...
Read more »No-Frills Mortgages - Right For You?
May 20, 2009 by Gordon McCallum
‘No frills’ products aren’t all they’re cracked up to be. Many mortgage brokerages right now are offering ‘no frills’ mortgage products—products that offer customers a lower rate while taking away the benefits of lump sum payments, portability and assumability.
It’s understanding why these products might be appealing. After all, during these economic times who has the extra cash to put down a huge lump sum payment? And who needs a portable mortgage if they’re not planning on moving until the market picks up?
The thing is, you can still obtain great mortgage savings without giving ...
Read more »Mortgage Product and Rate Announcements
May 1, 2009 by Gordon McCallum
It certainly is busy around here with half of Canada calling to see about refinancing their mortgages into a nice low interest rate.
Lenders are getting very competitive and the latest examples of this are:
- A 21 month mortgage. (OK – it’s weird, but it’s unique!). Want something that is one year and nine months long? All of the savings of a 1 year fixed, with nine months extra? Pick the 21 month mortgage. It’s longer than a one year! It’s shorter than a two year! It’s hard to market!
- A new variable / adjustable rate mortgage ...
Read more »New VALUE Mortgage Announced
April 27, 2009 by Gordon McCallum
We’re happy to announce that one of our lending partners has introduced their “Value Mortgage” today.
The Value Mortgage is a 5 year fixed at 3.59% (currently) that offers mortgage borrowers an exceptionally low rate.
For those who are most budget conscious and are absolutely positive that they will be staying in the home for at least five years, and are not interested in making any pre-payments, then this might be the product for you.
As with anything, however, there are some restrictions, so contact a First Foundation Mortgage Associate to make find out if this product is ...
Read more »Gord is Cool
March 6, 2009 by Shayla Damery
The 2009 CMP Canadian Mortgage Awards are taking place on April 3rd, 2009, and the finalists for all the different award categories were just announced. The contenders for the different awards were nominated by their peers (outside of the nominee’s company), and are from all across Canada.
First Foundation has been nominated – and is a finalist for – the Merix Financial Award for Best Customer Service from an Individual Office!
Thanks to all our customers for your support and business. Without you, we wouldn’t be a finalist for the Best Customer Service Award!
Read more »Monday Morning Mortgage Humor
March 2, 2009 by Shayla Damery
The following is an email that’s been floating around on the internet, and we thought it would be nice to share it with everyone, especially considering how the Edmonton housing market and home values have been behaving. We hope you have a good laugh!
Your house as seen by:
Yourself
Your buyer
Your lender
Your appraiser
Your tax assessor
Mortgage Renegotiation in Today's Market
February 13, 2009 by Shayla Damery
Recently, interest rates have been at historical lows. For some mortgage borrowers whose mortgage currently carries a higher interest rate than current rates, it could be worth refinancing. However, banks are starting to make it less and less appealing for home owners to break their mortgages.
In a Globe and Mail article published on February 12, it’s mentioned that banks are now changing how they calculate the penalty they charge when a mortgage borrower breaks their mortgage. Previously, lenders and banks would charge the equivalent of three months’ interest payments, but now they’re starting to move towards what ...
Read more »Don't Believe the Panic
February 7, 2009 by Gordon McCallum
Isn’t the media great? Doesn’t it uplift your spirit to read the newspaper and watch the TV news every day?
I’ll admit it. I’m a news junkie. I have been since I could read. It was a family habit to read the newspaper every morning – that is, once we got morning delivery in Saskatoon. For the first few years of my life it came after school…but I digress.
I find myself with such a distaste for the news these days that I can’t enjoy it anymore. The sensationalism, the bloodlust, the hype about everything ...
Read more »Managing Your Mortgage Through the Recession
February 4, 2009 by Shayla Damery
Canada has officially been declared in recession, and we’re seeing some of the lowest mortgage interest rates in history. This brings up a few concerns and questions from mortgage consumers, whether they be first time home buyers or current homeowners.
One major concern is that with the interest rates so low, a mortgage borrower won’t be able to qualify to keep their mortgage upon renewal at the end of their mortgage term. While this can be a valid problem, there are ways to avoid this happening, such as qualifying the borrower on a higher interest rate, or placing ...
Read more »Time for a New Fireplace!
January 27, 2009 by Gordon McCallum
As part of today’s federal budget announcement, we learned that home owners will be eligible for a 15% rebate on home renovations between $1,000 and $10,000, up until February of 2010.
That’s not a bad incentive to refinance and renovate your basement, re-do your kitchen, or look at doing some of the other eligible renovations.
With mortgage rates as low as 3.75% for 3 years, and a 15% rebate, that’s pretty cheap money.
Read more »Rate Reductions and Refinancing
January 22, 2009 by Gordon McCallum
3 year fixed rate @ 3.75%...contact us for details.
One of the questions we get a lot these days is, “Is it better for me to refinance my mortgage and pay a penalty for breaking the term early to get a lower rate, or to stay where I am for now?”.
The answer is, “That depends”. Every case is unique. The best way to know for sure is for us to do an analysis of your current mortgage, the penalty that your current lender says they’ll charge you, and what we can save you by making a change ...
Read more »Mortgage and Real Estate Myths
January 9, 2009 by Shayla Damery
Seeing how hot the Edmonton housing market was back in the Summer of 2007, you’ve probably heard many real estate myths. Do you think you don’t need money to invest in real estate? Maybe someone told you that buying the worst house on the block means automatic money in your pocket. Or perhaps now that the market has slowed down, you’re waiting to buy so that the market can decrease some more.
Whatever you may have heard about investing in real estate, Million Dollar Journey recently addressed seven of the most popular real estate myths. If you ...
Read more »First Foundation Wishes for 2009
January 5, 2009 by Gordon McCallum
Happy New Year!
Well, it was certainly an interesting year in 2008...and 2009 is shaping up to be no less intriguing.As a firm believer that we have more control over our destiny that we think, I've put together a top-10 list of wishes that I have for our country, our dear province of Alberta, and for all of you.
Here we go in no particular order:
- A rebound in the economy led by solid fundamentals and not another bubble (of any kind)
- Few, if any job losses. All of the macro stuff seems less important when you ...
Variable or Fixed - Common Questions
December 10, 2008 by Gordon McCallum
With the recent Bank of Canada announcement we've been getting a lot of questions lately from people who are trying to time the interest rate market. Sigh.
Folks, I have to tell you, in the time we've been in business I've never seen anyone successfully time interest rates becuase of skill. Luck sometimes...but never skill. The reality is that you have no control over interest rates and very little ability, if any, to predict where they're going to go. There are a few things you should know, however, about the relationship between fixed rates and ...
Read more »HELOC at Prime Still Available
October 17, 2008 by Gordon McCallum
Most lenders out there have increased their HELOC or Home Equity Line of Credit rates to Prime +1% or Prime +2%. The good news is we still have at least one lender out there currently offering this product at Prime (currently 4.5%). That's hard to find...but that's our job here at First Foundation - to find you the best deals on the market. If you're interested give us a shout and we can set it up for you.
Read more »First Foundation Announces No Frills Mortgage
May 7, 2008 by Shayla Damery
5.19% -- WOW!
First Foundation is proud to offer, in conjunction with one of our lending partners, Merix Financial, a No-Frills Mortgage that provides a significantly lower interest rate than a typical 5 year mortgage.
The Merix No-Frills mortgage is a 5-year closed term, fixed rate mortgage that is able to provide a lower interest rate by offering fewer prepayment privileges than are normally offered on a fixed rate mortgage. One prepayment privilege that remains is the option to increase mortgage payments by up to 10% of the original registered amount each year. Like most fixed rate mortgages, the No-Frills ...
Read more »The Advantage of ARMs and VRMs
March 10, 2008 by Shayla Damery
In light of the recent announcement that the Bank of Canada has cut its overnight lending rate by 0.5%, it's appropriate to write a bit more about the benefits of adjustable/variable rate mortgages (ARMs and VRMs).
Adjustable/variable rate mortgages are mortgages whose interest rate fluctuates as the prime lending rate changes. The prime rate is tied directly to the Bank of Canada's overnight lending rate (unlike fixed mortgage rates, which are based on bond prices). While choosing a fixed rate mortgage will lock in your interest rate for your mortgage term, a variable/adjustable ...
Read more »Consumers Win with First National's Self Insured Mortgage
June 18, 2007 by Gordon McCallum
Increasing competition in the Canadian Mortgage Market has again resulted in an opportunity for Canadian home buyers to save money. Just recently, First National Financial (*one of First Foundation's favourite lenders) announced that they will offer a self-insured mortgage through its broker network.
What does that mean to the typical home buyer? Well, on a typical mortgage of about $250,000, it could save...
...you over a thousand dollars!
This product is ideal for home buyers who have a 5% down payment. Rather than paying a 2.75% insurance premium to CMHC or Genworth Financial, you now only need ...
Read more »Don't Burst My Bubble
September 1, 2006 by Gordon McCallum
A TD Economics report published today concludes that housing activity in Central and Atlantic Canada has cooled down without prompting a price correction. However, select urban centres in Western Canada are “flashing warning signs” that suggest the recent pace of price gains has been unsustainable.
“Canada’s real estate markets appear to be in good shape and market conditions are becoming more balanced. Key exceptions are Vancouver, Calgary and Edmonton,” said Craig Alexander, Deputy Chief Economist of TD Economics, who co-authored the report with fellow economist Steve Chan. “The recent dramatic price gains in Calgary and Vancouver are unsustainable over ...
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