Just when we thought interest rates couldn't get any better, they have. Historically low actually. Whether you currently have a mortgage and own a house or if you are renting these low rates are reason enough to take a look at your current situation. If you own and are locked into a mortgage
call your mortgage broker and find out when your mortgage is up for renewal and if its worth while to pay a penalty and re-finance early.
Many people think of a mortgage as something you have to pay off. They have a goal to be ‘mortgage free’. There is nothing wrong with that-its great actually, but I look at it a bit differently. I like the idea of having your money work for you. Freeing up equity and using it to basically create more equity. Equity is the market value (what you could expect to sell your home for right now)less any debt/mortgage you have owing on it. If you have a lot of equity in your home you may want to consider taking some of it out and pay off credit cards, car loans etc… If you are fortunate enough to not have that type of debt you could take that money out and use it as a down payment on a 2nd home. I will give you an example, because I love examples.
You have owned your home for a number of years, its now worth $300,000 and your mortgage is $100,000. You have $200,000 in equity just sitting there. With todays low interest rates you could take $50,000 out and re-finance your current home leaving it with a new $150,000 mortgage, chances are your new monthly payment will not be much higher as rates have gone down so much. You can take that $50,000 as a down payment and purchase a $200,000 rental home. At 3.49% (5yr fixed term) a $150,000 mortgage would have monthly payments of about $670, factor in $200 a month for property taxes and as long as you can rent it for $900 per month you are laughing!
Whenever you tap into your home equity you want to be sure you are using it to increase your wealth- buying another property or renovating a current one, starting a business or if you have alot of debt maybe consolidating.
RENTERS- If there ever was a time this is it! If you contact a mortgage broker you can easily find out how much you need for a down payment and what kind of monthly payments will work for you.
Saving for a down payment can take a long time. If you don’t have RSPs to borrow against you may want to think about talking with family about a loan/gift down payment. If you have a child currently renting and are in the position financially, helping with a down payment and the purchase of their first home may be the best gift you could ever give. The sooner someone can become a homeowner the sooner they can begin to grow equity in their home.
Yes, house prices have been down for the last few years, but we need to look at home ownership and revenue producing properties as long term investments - not short term. In the long run over time housing prices always go up.
A mortgage broker can shop around to all the banks and get you the best rate, you don’t pay them any extra commission, they get paid by the lender. A mortgage broker may also work in the evenings, weekends and have more flexbible hours and communicate easily by phone and email for your convenience. Banks are great too! And if you have a great relationship with someone at your bank that’s great, just make sure you are getting the best rate out there!
Here are a few options for mortgage brokers
Dominion Lending http://www.dlccoastalmortgages.ca
coastalmortgages@dominionlending.ca
Michael Campagna
http://www.northvancouvermortgagebroker.ca
Victor Anasimiv
http://www.islandmortgagespecialist.ca
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