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This is what our clients say about the Mortgage Professionals:
The continued market updates have provided
excellent insight into economic indicators and aided us in making longer term decisions.The
last report sent out confirms our original belief that the interest rates will continue
to stay low and even reduce further.We are pleased that we took your advice and went
with a variable rate. regards Jeff
and Amanda
March 8, 2004
Thank you, for your patience and great service.
You can quote me " I found your service faster then a local mortgage broker,
I used last time. The miles did not impede the personal service. Your knowledge and
professionalism brought me a mortgage rate and funding exceeding my best expectations.
A man's home may be his castle but, without the right financial guidance his bed
might be floating in the moat.
Brian Martin Vancouver B.C. "
" Just wanted to thank you for the effort you put into the
e-mail newsletter. I find them really helpful and appreciate the fact that you work
them into your busy schedule. After sales service on a financial product is a very
unusual item and separates you and your company quite significantly from the rest
of the pack. Just when I see some snippet in the press that makes me nervous, along
comes one of your "commonsense" straight-talking newsletters. Well done,
and thanks again.
(This is an unsolicited letter of appreciation and may be used for marketing and
publicity purposes.)
Roger
Roger Martin, Ph.D.
Editor"
"Thanks Brian for being so informative!
I feel like finally I am in touch with the market. I probably am with a great number
of people who are basically economically controlled by the market with no understanding
of what is going on with our money. The banks never inform you of any changes whatsoever,
or where there could be a better vehicle for your mortgage".
"We would like to thank you for the
terrific service you provided us. It was stellar by anyone's standards (especially
ours, which tends to be often too high!). Your office was fast, efficient and extremely
professional and I wouldn't hesitate to recommend you to anyone. We notice service
probably more than the average customer, since we often must rely on e-mail, faxes
and phone calls to get our business done and that is where we notice those who we
can count on to do what they say. You certainly lived up that!" July 2004
-Denise & Joe, Switzerland
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recommend a better mortgage product to you that will save you money and/or give you
better prepayment features and benefits,you will know you have the best available
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 Interest Rate Roulette-Put Your Money on Affordability
The most difficult decision facing buyers
when considering a mortgage on a home is whether to chose a short term mortgage or
whether to chose a long term mortgage. You could listen to economists, your lawyer,
your real estate agent, your accountant, your banker, your parents your friends;
all of them will have an opinion, but they don't pay your mortgage payment, you do.
Your underlying concern should be affordability and with this as your guide the process
becomes easier.
Many people gamble by choosing a
short term or variable-convertible style mortgage hoping for a drop in long term
rates before they lock in. This is an effective strategy in a falling rate market,
but you have to constantly be aware of mortgage rates in order to lock yourself in
at the most opportune time. You must also remember that history has shown that any
number of economic circumstances can derail a falling rate market and send rates
on the upswing. When this happens, rates go up much faster than they go down and
if you miss the bottom, you may have foregone the long term savings you would have
had by locking in at the outset.There is also a theory that over the long term a
variable rate mortgage will average out at less than a fixed rate model.This theory
is given more credence by statistics at the Bank of Canada web site which illustrates
the average 5 year fixed mortgage rate over the last 10 years, compared to the prime
rate during the same period.In addition,prime is near it's lowest point now in 40
years and the spread between a discounted variable rate model and the 5 year mortgage
rate affords some upward rate protection.
Choosing the short term or variable
rate route is not a good gamble if your mortgage payment is on the borderline of
affordability and a rate increase would make a dent in a strained budget. IF
on the other hand ,your mortgage payment is well within your budget and you don't
mind waiting to lock in or if you choose to go variable as a long range strategy,the
variable rate mortgage or sitting in a variable indefinitely, can save you a lot
of interest ,especially with the attractive introductory rates available on several
products. With a low introductory rate,you actually have a substantial reduction
in the principal of your mortgage in the first three months to 9 months,compared
to a normal fixed 5,7 or 10 year term.Because most variable rate products are based
on some formula associated with the prime rate and because the prime rate changes
are covered so well by the media,you can stay on top of any anticipated changes up
or down.If you are a customer of the Mortgage professionals,we keep you up to date
by email.
Another important factor concerning
variable rate products is the ability to convert to a longer term mortgage at no
cost and at a preferred rate.Many institutions will give you what seems to be a good
deal up front, but you get a surprise when you go to lock in as their rate is not
the best discounted rate available.Even if you shopped ever bank yourself,you would
still not be assured of getting the best deal out there,when it comes to a variable
rate product.Some products look good but compound their interest monthly ,instead
of semi annually so your actual interest cost is much higher.Some products offer
monthly payments only.A new product has emerged in the midst of a very competitive
interest rate market called the "Variable capped rate mortgage".Again,there
are various models of this product,each with it's own pro's and con's.A Mortgage
Professional can guide you to the product that will best suit you.
At the Mortgage Professionals,we can
guide you through the features and benefits of a wide range of variable products
and ensure that if and when you decide to convert,there are no surprises.We even
have a lender who will guarantee in writing that you will receive the best published
discounted rate available on conversion.The same rate we offer our clients on a day
to day basis!There is one very simple undeniable truth when shopping for a mortgage
with the bank's yourself and that is that the bank's work in their benefit to make
more money for their shareholders.I know that for a fact because I used to be one
of those bankers.At the Mortgage Professionals we work for you and the bank's pay
us to do so and the number of people that turn to us is growing each day as bank's
merge and focus on their profitability instead of customer satisfaction.
Some home buyers today are choosing
a 10 year term mortgage. Interest rates are near the lowest point that they have
been in 40 years and a 10 year term mortgage allows you to fix your cost without
any worry about what goes on with the economy or the interest rate market .If you
move again down the road ,you can port the balance of your 10 year term ,thereby
providing some interest rate insurance toward any new mortgage you may need down
the road. The ten year rate is also a popular product for people renewing their mortgages.
Many people renewing today probably have a higher rate currently in effect on their
mortgage than that available now, so they can significantly shorten their remaining
amortization period remaining by keeping their current payment and choosing today's
lower rates. By choosing a ten year rate many people are able to lock their rate
for the balance of their amortization period.
Does it pay to stay in a variable?
If in doubt, put your money on affordability and choose a long term mortgage
to keep your payment fixed. If you are more adventurous, consider the convertible
options available to you. One of our Mortgage Professionals can help you choose the
right options for you so call us today. It costs nothing to talk and it could save
you thousand's!
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