Paying Off Your Mortgage Faster

The good news is - A subject removal is a Great Safety Net, when it comes to buying real-estate. The other good news is -

I’m going to give you some great tips today that will help you avoid some of the typical problems I see, when it comes to subject removals.

First of all

What is a Subject removal?

A subject removal is a date in time in the future that you as a buyer, have requested from the seller in order for you to get your affairs in order.

Make sure your financing’s in place

Make sure your inspection’s done

If you’re buying a strata unit, make sure you’ve read the minutes & form B

To do everything that you need to do to be sure because when you remove subjects the contract becomes firm & binding

Now lets talk about removing subjects, if you don’t remove subject on time you risk losing the home to another buyer. If you remove to quickly and can’t complete, then you risk losing your deposit and potentially a lot more.

So what can you do to make this go smoothly?

The MOST important point when it comes to subject removal

is TIME

And don’t put a subject removal on a weekend or stat holiday

The Banks aren’t open

And remember.

just because you have a pre-approval for financing

doesn’t necessarily mean it going to speed up the process

and if you’re buying a condo

you need time to receive and go over the strata minutes & form B

As you can see there are so many variable involved and some you have NO control over

Everyone means well but at the end of the day

You MUST allow yourself enough time

I look at Financing your home

kinda like taking an airline flight cross country.

When you start on your trip
you have no idea how the trip will go.
Neither does the pilot!

You could run all different types of turbulence,

or you could have a smooth flight and land on time.

Certainly the pilot will try to use his or her experience to navigate around the storms and go for the smoothest flight plan,

but if they’re honest,

they can’t promise a turbulent-free trip.

Their job is simply to get you to your destination
in the least time
with the least aggravation,
while keeping you informed throughout the trip.
As your Personal Mortgage Consultant,
I see myself as the pilot of the your plane.
My job is to assist you in getting your mortgage
for the lowest cost,
in the least time,
with the least aggravation.
I can’t promise you a turbulence-free ride,
but I can promise you
that I’ll utilize my experience and expertise
to take you on the smoothest flight that I can.
And if we do hit turbulence,
I won’t bail out on you .
Remember, If you have any questions
it’s as easy as

taking out your phone

looking up my number

and dialing

604-273-2002

Mark Fidgett | 604-273-2002

“Your Personal Mortgage Consultant….For Life!”

PS – Please Don’t Keep Me a Secret

A REFERRAL is when you INTRODUCE someone you care about to someone you TRUST!

T 604.273.2002 | F 604.522.2072

W http://www.notapennydown.com

An independent Mortgage Specialist associated with the Verico Mortgage Network.

With rates  back down, the temptation to ditch your old mortgage can be sweet, but be wary of complicated calculations

Have you ever wondered why the banks list posted mortgage rates that are ridiculously high?

One reason is that it could result in you paying $10,000 or more in extra penalties should you ever break your mortgage with them.

Here is the scenario:

Many people have, at one time or another, looked at breaking their mortgage in order to get a better rate.

With interest rates dropping to historic lows, it is more and more common for homeowners to think about the benefits of breaking their mortgage, paying a penalty, and locking in to a new lower rate mortgage.

Traditionally, the mortgage penalty on fixed rates is either 3 months interest OR something called the Interest Rate Differential (IRD) – whichever is higher. On a closed, variable rate mortgage, it is usually simply 3 months interest.

While the 3 months interest is pretty easy to understand, the IRD is a little mysterious. For help on this, I went to TD Bank’s mortgage website. RBC has a similar section.

They both show the following formula:

Let’s say you have a mortgage at 4.75%, and it comes due in 2 years, and it has a current principal owing of $400,000. TD’s current 2 year posted rate is 4.1%. Let’s say that you were offered a 0.5% discount off the 2 year rate. The math would work as follows:

.0475 (A) – .0385 (B) = .009 (C)

.009 (C) * $400,000 (D) * 24 (E) / 12 = $7,200 (F)

While $7,200 seems like a lot of money, if you can lock in a 5 year mortgage today at 4%, you are benefiting from 2 years of a 4% interest rate instead of 4.75%, but you are also guaranteeing three additional years at 4%, when it is quite likely that in two years, a 5 year fixed mortgage rate will be a lot higher.

Here comes the evil part.

At many big banks, they don’t use your existing 4.75% rate. What they do is take the posted rate at the time you took out your mortgage. This is a rate that has no relevance to you, as you never paid it. In fact, it likely isn’t listed anywhere on your mortgage contract. Remember the ridiculously high mortgage rate we talked about at the beginning of this article? Now you see what it can be used for.

If we take the same IRD formula, but replace the actual rate of 4.75% with a posted rate of 6.25%, the IRD becomes:

.0625 (A) – .0385 (B) = .024 (C)

.024 (C) * $400,000 (D) * 24 (E) / 12 = $19,200 (F)

Because of this sleight of hand, you would now owe the bank an additional $12,000!

If you try and fight the calculation, you will likely face a long line of staff who don’t understand the calculation themselves. A few months of complaining through the right channels might get you your money back.

In the March budget, the federal government said it would “bring forward regulations” to standardize the calculation and disclosure of mortgage pre-payment penalties. (This applies to federally regulated lenders.) We are still waiting.

This is exactly the type of situation where a good financial advisor can help you avoid or manage. The situation on IRD calculations as it currently stands with the big banks is rotten to the core.

The sad part of all this, 85% of mortgage holders simply sign their renewal document without speaking to a Mortgage Broker.

Like playing Russian Roulette?

Call me to discuss 604-273-2002

Mark Fidgett | 604-273-2002

“Your Personal Mortgage Consultant….For Life!”

PS – Please Don’t Keep Me a Secret

A REFERRAL is when you INTRODUCE someone you care about to someone you TRUST!

T 604.273.2002 | F 604.522.2072

W http://www.notapennydown.com

An independent Mortgage Specialist associated with the Verico Mortgage Network.

Juat because you’re pre-approved doesn’t mean financing is guaranteed.

Always be aware of your credit & treat it VERY carefully.

Call me to discuss 604-273-2002

Mark Fidgett | 604-273-2002

“Your Personal Mortgage Consultant….For Life!”

PS – Please Don’t Keep Me a Secret

A REFERRAL is when you INTRODUCE someone you care about to someone you TRUST!

T 604.273.2002 | F 604.522.2072

W http://www.notapennydown.com

An independent Mortgage Specialist associated with the Verico Mortgage Network.

How does the Home Buyers Plan (HBP) work?

Each purchaser may withdraw up to $25,000 from their RRSP to buy or build a qualifying home. If you buy the qualifying home together with your spouse or other individuals, each of you can withdraw up to $25,000 to a combined maximum of: $50,000. You must be a resident of Canada; you may participate only once in your lifetime and must be considered a first time home buyer. You are considered a first time home buyer if you haven’t owned a home at any time during a specified period. Generally, a five year rule applies. The funds must have been in the RRSP for at least 90 days prior to withdrawal to be eligible under the program. Nothing beats the RRSP vehicle for 1st time buyer’s. The payback is over 15 years, with no interest expense, plus you received a tax deduction each year when making the original contributions. A simple and tax effective way to get your $50,000.00 down payment into the real estate market.

Call me to discuss 604-273-2002

Mark Fidgett | 604-273-2002

“Your Personal Mortgage Consultant….For Life!”

PS – Please Don’t Keep Me a Secret

A REFERRAL is when you INTRODUCE someone you care about to someone you TRUST!

T 604.273.2002 | F 604.522.2072

W http://www.notapennydown.com

An independent Mortgage Specialist associated with the Verico Mortgage Network.

Choosing a Realtor

When you decide to buy or sell real estate you will have no difficulty finding a realtor, there are lots! It’s finding a good one that will take some work.  After nearly two decades of helping people sell and buy real estate I offer you some free advice on the best way (and the worst) to choose a realtor in helping you with one of life’s biggest emotional and financial decisions.

Choose a Realtor that has been recommended by family or friends. Family or friends who’ve had a good experience with a realtor are your best referral source. A good realtor will keep in contact with their past clients and ask them for referrals. This is a great place to start when choosing a realtor.

Choose a busy Realtor.  Realtors are busy when they are successful at their work. Ask about their experience. Experience and a steady track record are invaluable in terms of marketing and contacts. Ask how many homes they have sold this year and last. Ask how many they currently have listed.

Interview two or three Realtors. Tell the sales rep you are interviewing other Realtors. Let them know who they are competing against. Analyze their differences and pick the one that you feel most comfortable working with and whom you feel will best represent your interests or needs based on their skill level and experience.

Choose a full time Realtor.  Some realtor’s work only part time.  For them, your largest financial and emotional decision may be a second career. Choose a realtor who treats this as a business. You wouldn’t choose a part time surgeon to operate on you. A full time realtor means better market knowledge, better service, better marketing and better negotiating which means a better price for you, whether buying or selling.  Ask how often will you hear from them.  Do they have support staff to help them, help you? To do a thorough opinion of value for a client it takes me between one and two hours of my time and my staff’s time.

Choose a knowledgeable Realtor.  The realtor you choose should be able to explain the market as it relates to your sale or purchase. Have they sold or listed homes in your area? They should take the time to educate you as to the present market conditions and show you the best way to sell or buy given those conditions and the competition.  They should back up their explanations with current market data and be honest with you in interpreting that data. You should be able to understand what they are doing and why it is in your best interest.

Don’t pick a Realtor based on price.  When realtors are competing for a listing, some will give an inflated price just to try and get the listing, only to ask you for a price reduction a few weeks later. Realtors don’t determine the price for your home, the market does that! Realtor’s that don’t have much to offer in terms of experience tend to compete on price.  In other words, what you may gain on a cheaper commission fee, you will likely lose in overall sale price due to poor marketing and weak negotiating.  Part of a Realtor’s job is to interpret hundreds of sales as well as active listings. Therefore your prospective realtor should be able to explain to you what your specific market range is for buying or selling. A good realtor knows that every house has a price range which is determined by the seller’s motivation to sell and the buyer’s need to buy. Did you know that 70% of whether or not a property will sell is decided when the price is established. The other 30% is based on the realtor’s level of competence and negotiating skill.

Choose a Realtor based on their knowledge and success rate. All Real estate companies have good and bad realtor’s. Choose a successful company. A company with more agents and a larger market share will result in your property getting more showings and more exposure.

Choose a Realtor based on their marketing program.  How much time, how much money and what kind of marketing is your realtor suggesting for your property?  Every property is different and needs a tailored marketing program to sell it and attract the best buyer willing to pay the highest price.  People don’t buy bricks and mortar, they buy a lifestyle, an environment where they can raise their kids or a location where they can retire in style, with amenities they can use and enjoy.

Check References.  Ask the realtors to provide references and phone numbers of their most recent clients and then call them!

Pick one Realtor to work with. If you pick one realtor and they know and understand that you are working only with them than that realtor knows that if they can sell your property or help you buy one that is right for you they will get paid.   Not paid just once, but numerous times from the referrals you send them over the years because the realtor did a great job for you.  If the realtor knows you are working with 5 or 6 other realtors they figure they have about a 15 to 20% chance of ever getting paid and that’s about the amount of effort they put into helping you.

Call me at (604) 273-2002 & I’ll answer any questions you might have.