Lethbridge, AB

There's more to a mortgage than a low rate

by Talbot Boggs
Monday, September 28, 2009provided by

(Special) - Homeowners and buyers are in a rather enviable position these days. Interest rates are at historic lows and the cost of borrowing for a home is about as low as it can get.

That's great news. But it's not the only thing homeowners and purchasers need to think about their mortgage.

There are a number of other features to consider before signing up for a mortgage and what is probably the largest debt that most Canadians will ever take on in their lives.

"When it comes to choosing a mortgage, getting a good rate is just the tip of the iceberg," says Mary Gronkowski, regional sales director with Mortgage Intelligence Inc., a national mortgage brokerage company. "You have to be aware of all the other features that may lie below the surface. All features of a mortgage should fit a homebuyer's personal goals, both now and down the road."

One type of mortgage to consider is an assumable mortgage.

An assumable mortgage means it can be transferred to another borrower. It allows a purchaser to take on your mortgage's terms and payments as part of the sale of your home. With extremely low interest rates today, that could be a big selling feature to a potential buyer in the future.

Given the low rates today, many homeowners are thinking about refinancing their mortgage.

Whether you should refinance your mortgage in a period of low interest rates depends on how much it will cost you to break your existing mortgage compared to how much you will save in interest payments.

If you break an existing mortgage you will have to pay the greater of three month's interest or the interest rate differential (IRD).

An IRD is a penalty for early prepayment of all or part of a mortgage outside of its normal prepayment terms. Usually this is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principal outstanding and the balance of the term.

For example, if you had a $100,000 mortgage at nine per cent interest rate with 24 months remaining and wanted to renegotiate your mortgage at 6.5 per cent for 24 months, your IRD would be $5,000 ($100,000 x 2.5% $2,500 x 2 years $5,000).

It may only make sense to refinance your mortgage if the interest rate savings over the remaining life of your mortgage exceed the value of the IRD.

Another strategy is to take a variable rate mortgage. If interest rates go down and you keep your mortgage payments the same, you will be paying off more of your principal with each payment and will pay down your mortgage faster.

Many borrowers are taking advantage of low interest rates by accelerating payments on their mortgages. Many lenders will allow you to double up payments periodically or make lump sum payments of up to 20 per cent of the principal once a year.

You should make sure you understand the size and frequency of payments your lender will allow before you sign up.

Some mortgage lenders will have an option to skip a payment without penalty, which may come in handy in today's economy.

Another option that many mortgages have is portability.

This allows you to transfer your existing mortgage over to a new property, another big advantage if you have a mortgage at current low rates.

Not all portability features are the same, however. Some lenders allow up to 120 days to transfer the mortgage while others allow for only a few days or a week.

"Choosing the right mortgage involves considering where you are now and where you may be three to five years from now," says Gronkowski. "Working with a professional can help you make sense of the many options available to you."

Thinking about selling your house?

Think you will save money by trying it on your own and without professional representation?

The desire to sell your own home comes from wanting to save money. Many people estimate how much their home is worth and then figure somewhere between 4 to 7% of that would be paid out in commissions to call up their neighborhood real estate pro. The thought of paying 5, 10, 15 thousand dollars to have someone sell the property for you sometimes seems excessive.

I agree, it is a substantial amount of money. However, there are some reasons that paying this commission can be the right decision.

1. Listed homes sell faster

-while there are no great sources for facts on for sale by owner properties, the reality is that the majority of them eventually give up or else eventually call in professional help, often after an average of 60 to 90 days. In the Lethbridge market, a properly priced home listed on MLS and marketed reasonably well, can expect an offer in less than 30 days.

2. More Money

-Listed homes almost always sell for more money than comparable for sale by owner properties. This is due to the fact that the home is exposed to more buyers and also to the best type of buyers. The best type of buyer is not the guy who lives down your block, it is someone who needs to buy asap, often a relocation or someone who has just sold their home. These people are working with a real estate professional 100% of the time. If you want to sell your house to a motivated buyer who will pay top dollar for the right home, you need to get it in front of these buyers. Listing it is the only way.

3. Advice, Knowledge, and Insurance

-I like to throw all 3 of those in the mix. A professional real estate person will know the value of your home in the current market, The should be aware of what you can do to the property and for marketing in order to achieve maximum selling price and to attract the best offers. Also, licensed real estate professionals carry insurance which helps to protect YOU should there be something unfortunate happen during the transaction. This insurance alone can often be well worth the value paid in commissions.

When I sell my own real estate, I use a real estate professional to help me, even though I could do it myself. I also pay top dollar commission and price my property to sell. My listing attracts both real estate professionals but also the best buyers in the marketplace. Keep in mind, any real estate person can list your home, but only the best real estate people can get you maximum dollar for your property in the least amount of time.

Call me anytime for no obligation conversation about your real estate needs. This is what I do! Let me show you how to maximize the dollars in your pocket by making smart real estate decisions.

This has been a crazy month for me so far. I have been interviewed by 3 major media outlets who were gathering info for various articles they were writing.

Canadian Real Estate Investor Magazine was the first to make contact with me a couple of weeks ago. They often write pieces about various regions in the country and what the rental and revenue market is like. I really enjoyed talking to this reporter, as it made me even more aware of the things that investors from outside our area are interested it.

As a long time resident of Lethbridge, it is easy to not have noticed how rapidly our population grew, how much more development has come in recently, to not see our marketplace changing dramatically. Speaking with the reporter about rental properties in Lethbridge made me realize just how great our market is and how fortunate our local investors are.

The second contact came from Inman News. Around here, nobody would recognize that name, but Inman News is 'THE' major player when it comes to Real Estate news in the US marketplace. According to their website, "Inman News is the leading source of independent real estate news, information, advice, research, opinion and commentary for industry professionals and consumers alike."

The 3rd call came late this week and was from CTV news. These guys are a staple of the Canadian media and I have actually spoken to them in the past. With the Alberta marketplace seemingly weathering the economic downturn rather well, we are attracting national and international attention. I was thrilled to be the positive voice on this issue and to contribute some opinion and facts regarding how things are going. I personally believe that much of what happens in the market is a creation of the mindset and attitude of consumers, real estate professionals, and the media.

If we want a strong economy and real estate market, we need to focus on the successes and on the good news that is around us. Sure there are a few hardluck stories and there are some markets elsewhere in which things are still not going well. Lethbridge is doing great though. Alberta is still going strong. Canada in general is still one of the leading marketplaces in the entire world.

So I just wanted to brag a bit about these media requests I had received. Hopefully my contributions will be informational, educational, or at least entertaining. Thanks so much for reading.

For the past 15 years, I have had many real estate clients who arrive to live and work or retire to Lethbridge from various locations across Canada and the world. In the past, I used to provide these clients with a package in advance of their arrival to the area. This bundle was referred to as a 'relocation package'.

Stuffed into this package of info was always a map, lists of schools and recreational activities, economic projections, housing stats, and lots of other dry stuff that really was just in there to make the pack look much more extensive and helpful. The reality was though that the majority of those packages probably went unopened or only looked at for less than a brief moment.

As much as some of this information seemed useful, most of it was statsitics and stuff that the average person really doesnt' care about. Most of it was not tangible real life stuff.

Who cares who the 3rd biggest Lethbridge employer is, or who is on the City Council, or how many days below freezing there are?????

What people really want to know is stuff that matters to their real lives. Stuff that matters day to day. Stuff like:

-is there a place I can get Japanese food?

-is there a gun club?

-is there a waterpark for kids?

-where do you go to buy car insurance there?

-which shopping center has the best stores?

-which streets or areas have lots of crime?

The real valuable relocation package comes not from some branch of the government or the City of Lethbrige. It comes from living in the community, raising a family here, participating in sports and cultural events, shopping, dining out, and entertaining friends and visitors here. The real relocation package is experience and not statistics.

If you are considering moving to Lethbridge and southern Alberta, give me a call and lets talk about the real relocation package and about the things that matter to you and your family. Robert May 403-330-3039 or robertmay (at) gmail (dot) com.

We went out last Friday (Sept 18/09) to Henotic. Henotic is a restaurant that is located in downtown Lethbridge in a building that was formerly a firehall decades ago. If you are looking for a night out in Lethbridge, you might want to check it out. Since we are very social people and dine out at least a few times each week, I consider myself a pretty fair judge of what makes a good restaurant and will give you my honest opinion of the place.

We had been meaning to go try the Henotic restaurant for some time and just never seemed to have time or always ended up going someplace else that was prearranged by one of our friends, etc. However, after joining the Henotic Restaurant facebook group and receiving several emails about live entertainment they were hosting, we decided we would give it a try.

The entertainment that attracted me that evening was a burlesque dance troupe from Calgary called the "Kabuki Guns Burlesque", or the KGB for short. I have seen these ladies perform several years ago as an opening act to a late night full participation screening of 'The Rocky Horror Picture Show' and so I knew what to expect. These girls are phenomenal. They give a brief history of burlesque, put on a show, and entertain the crowd. (For those who dont know what Burlesque is, it is dance and Tease part of 'Striptease')

There was also an opening act, whom were a Calgary based rock band by the name of 'Dirty Girl Social Club'. They put on a decent show, although they were a little overpowered for the venue and the crowd lacked enthusiasm for all songs except a Micheal Jackson medley.

Restuarant Review

The location of the restaurant not great for Lethbridge. It is downtown in an area that has seen many businesses leave and buildings get knocked down or burned down. It is the oldest and original downtown area of the City of Lethbridge. Despite that, the building that the restaurant is in is actually a cool old building and has a great history for those who are interested.

The interior of the building has not changed much through its last 5 or 6 incarnations as a couple of bars and a few different failed restaurant ventures. If you look around you will still be able to find renovations that I helped do to the space about 10 years ago, lol. Still, the space is wide open, easy to navigate, and a mix of historic charm and modern art.

We sat in a both in an area which was actually the original DJ booth back when the space was first renovated into a modern commercial building. I have to mention that the bankette seating was a bit of a do-it-yourself piece of construction, and in this rare case I wasnt the one who made it.

The service was prompt, friendly, and attractive. The young lady who served us was right on top of things, made notes, and never messed up all night. The menu offered a decent selection of items, including a few unique dishes that you don't find at a ton of restaurants (eg. Buffalo steak). Prices were great with a meal ranging from $12 to $14, which is comparable to Moxies, Earls, Cheesecake type restaurants. Alcoholic Beverages seemed to round out to about $5 a piece.

A couple of personal pet peeves of mine when it comes to dining out, and things which this restaurant completely scored big points on were: heavy cutlery, cloth napkins, free pop refills. Those are my 3 big ones and any restaurant that doesnt have those 3 is of suspect reputation in my book, lol. Henotic scored perfect on all 3.

We did have a bit of a wait for our food due to us coming in right behind a very large group and it did not bother us as we were staying all evening. What was nice though, is that our server and the manager on duty both came over to us and explained that there was a bit of a delay. Nice touch. I don't ever mind waiting if I am not left wondering. Great service on this point.

When the food did come, it was beyond my expectations. The presentation on the plates was far above average for a Lethbridge restaurant. It actually appeared to be put onto the plate by someone who cared and not by a guy in a paper hat. Further to that, the quality of the food and the taste was exceptional. I kept having to second guess myself and make sure that I wasn't drunk on either the Whiskey or the fact that I had heavy cutlery and cloth napkins, but it was absolutely delicious.

Grand total: $32 ridiculously low for the meal we had, so we had to tip it up to $40.

Summary

Henotic exceeded my expectations in every way. The service was perfect. The food presentation, quality, and selection was fantastic. And even the little details were spot on excellent. Nowhere else in Lethbridge can a couple get a $100 meal for $40. In addition, the live entertainment was wonderful and did a great job.

Lethbridge does have some nightlife, you just have to get off the couch and come find it.

*I hope to return to Henotic very soon for another meal and to catch some more of their nightly entertainment. If you read this article and find yourself going there for a meal or a show, feel free to let them know that you read my review on the internet. I think many people would be suprized at just how much we rely on this sort of info these days.