A common misunderstanding among many clients is that a pre-approval by a lender gives them the ok to start house-shopping, and guarantees that they can purchase a new home.
Oftentimes, this is NOT the case.
Most lenders will base pre-approvals ONLY on salary – not considering true stated income, credit history, or down payment verification. This gives a FALSE ASSURANCE that misleads many homebuyers, consequently wasting your time in the process. The true value of a pre-approval is in who did it, and if it was done properly.
THINGS TO KNOW: A pre-approval only guarantees the current mortgage rate for 120 days • ensure you always add a mortgage contingency to your real estate offer.
MY BEST ADVICE? Ask your clients if they have done a proper pre-approval with a mortgage broker. If not, have your clients contact me to get them rolling on the home-buying bandwagon. Your time is valuable, and I can give them the confidence they need to make efficient decisions when buying their home.
Helping you make sense of it all,
James C. Tworek
Partner, Director of Corporate Development
Trimor Home Finance
403.850.8050
james @ trimormoney . com
Trimor Home Finance has a fantastic opportunity to save our clients thousands of dollars!
Due to the significant decrease in variable rate mortgages, many clients have saved over $10,000 in interest on their current mortgage! Over the past 18 months, as a result of the economic crisis in the United States, variable mortgage rates have sky rocketed to as high as prime +1.0%, but recent changes have brought variable mortgage rates back down to as low as prime -0.7%!
Here’s an example of how this can have a positive effect on your personal finances:
Current mortgage amount: $300,000
Current mortgage at prime +0.5%
New variable mortgage at prime -0.7%
Term remaining: 4 years
Total interest savings over 4 years: $13,989.72
Total additional principal paid: $4,613.40
Overall savings: $18,603.12 – $2,568 (pay out penalty) = $16,035.12 in savings
How is this done?
Quite simply, we will transfer your mortgage to another lender who is able to offer you the better rates than your current lender. There will be a nominal pay out penalty charged by your current lender, however, the cost is insignificant compared to the savings you will receive. The best part is that there are NO FEES charged to you, the lender will pay for all of the legal costs associated with your transfer!
Contact us today to take advantage of this tremendous opportunity, and consider it an early Christmas gift!
Helping Canadians save money on their mortgages every day,
James C. Tworek and the Trimor team!
403.802.7207 begin_of_the_skype_highlighting 403.802.7207 end_of_the_skype_highlighting
I'm a part of this Real Estate Investment Community here in Calgary: www.CanadaREIC.com It's a great way for like-minded Real Estate professionals and investors to get together and share ideas about different financial concepts, investment ideas and the like... Jarek, the gentleman that runs the community, is a professional investor himself and does a very good job in actively seeking opportunities for investors.
One alliance that he's created is with a group out of Ontario: CanadaPREIG. This month, Navtaj Chanholke, the investor behind that group, is holding a seminar in Edmonton about Alberta aroperty foreclosures and the opportunity to scoop up properties at a discount. As a professional courtesy, I'm happy to forward on Navtaj's Facebook post here to anyone in the ActiveRain network as well:
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Alberta Is On Sale......You can make a fortune with Alberta foreclosures that have been to the sale and that doesn't include the thousands of homes that haven't. Homes with mortgages in default, some in foreclosure, some not yet. All with desperate panic sellers looking for an answerDon't think about this. Just reserve your spot while you can. We will be full.Our class size will be extremely small to get personal attention.to re...serve your seat,please surf over HERE
100% Canadian Content! World Wealth Builders offer practical and interactive solutions to the common “fear factors” that keep most investors feeling trapped rather than forging ahead with confidence.Let World Wealth Builders walk you through first step at no cost to you.
Date: October 31st, 2010
Time:1:00pm-4:00pm
Location:Radisson Hotel Edmonton South 4440 Gateway Boulevard , Edmonton AB T6H5C2
Telephone: (780) 437-6010
Are you ready to move forward? Get a Seat @ our LIVE 3 Hour Seminar at No Cost. Cliick here for reservation confirmation.
Looking forward to see you in person.
To your success!
Navtaj Chandhoke
1-416-409-7300
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... just in case anyone was interested!
To your growth and success,
James C. Tworek
Did you know?
In addition to the provincial and municipal rebates that you may be eligible for when you upgrade your home (windows, furnace, roof, etc…), you could also save on your mortgage default insurance premiums if you buy a green home or upgrade your current one?
CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers. If your higo-ratio mortgage was insured by CMHC whe you purchased an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium may be available. You could also have the added flexibility of an extended amortization (up to a maximum of 35 years) without a premium surcharge.
Is there a catch at all?
Here’s how it works:
If You’re Thinking of Buying or Building an Energy-Efficient Home.
If You Own a Home and are Thinking of Renovating to Make your Home More Energy-Efficient
Although the guidelines are quite general, I called over to CMHC this morning and reviewed a few questions with them about the rubber hitting the road with “green’ home mortgage submissions:
Q: Is it very popular?
A: In the past, it really hasn’t been. They anticipate that it is growing and being a crown corproation they have a vested interest in energy-saving and environmentally-friendly initiatives.
Q: If you’ve owned your home for a few years, can you request a rebate back although you’re not actively refinancing your home at this point in time?
A: The work should be completed within a ‘reasonable time period’ from the date of possession to the time that the work is completed and rebate requested. This is ‘normally within 24 months from the possession date’ but exceptions have been made in rare circumstances.
Q: What’s the largest rebate that you’ve ever seen?
A: They couldn’t tell me specifically (darned privacy laws!) but I was told to imagine the two scenarios below:
Scenario 1: ‘normal income, 5% downpayment’
$300,000 purchase price, $15,000 downpayment. 35-year amortization.
Standard CMHC fee: 2.75% + 0.40% for the extended amortization to 35 years = $285,000 x 3.15% = $8,977.50
Scenario 1, ‘Greened’:
a) Discount #1 -Waive the extra premium for extended amortization. Savings: 0.40% x 285,000 = $1,140.00
b) Discount #2 – 10% discount on the standard CMHC premium. Savings: 0.10 (2.75% x 285,000) = 0.10% x $7,837.50 = $783.75
Total savings for the ‘average joe’ starter home in Calgary: $783.75 + $1,140.00 = $1,923.75.
Not too Shabby!
Scenario 2: ‘Self Employed (no proof of income), 10% downpayment’
$300,000 purchase price, $30,000 downpayment. 35-year amortization.
Standard CMHC fee: 4.75% + 0.40% for the extended amortization to 35 years = $270,000 x 5.15% = $13,905
Scenario 2, ‘Greened’:
a) Discount #1 -Waive the extra premium for extended amortization. Savings: 0.40% x $270,000 = $1,080
b) Discount #2 – 10% discount on the standard CMHC premium. Savings: 0.10 (4.75% x 270,000) = 0.10% x $12,825 = $1,282.50
Total savings for the ‘average joe’ starter home in Calgary: $1,080 + $1,282.50 = $2,362.50.
The savings are even sexier for those of us that are self-employed!
It’s obvious that the savings are available and valuable to both your pocketbook in the initial purchase as well as over the long run as your energy bills drop. Are they likely to offset the entire cost of the renovation? Not likely, but every bit helps! Don’t forget to push for manufacturer, city, provincial and national rebates to compound your savings wherever possible too!
Are you purchasing a new home and want to weigh the differences between going green and not? Maybe you have some questions about how to green your current home that you’re renovating? Contact one of our mortgage specialists today and we’ll be happy to help with your questions and getting you on the right track with the best mortgage product for your needs and the best rates in the market!
To your homebuying success,
James C. Tworek and the Trimor team!
403.802.7207 begin_of_the_skype_highlighting 403.802.7207 end_of_the_skype_highlighting
Considering that at the heart of what we do is to help clients become financially free (or at least better off from a net worth perspective), it’s a bit ironic that we help clients acquire property via mortgage loans… That’s only step 1. Step 2 is really educating borrowers on how to pay their mortgage off before their contract says they can.
Here are four small-but-effective ways that you can save on your mortgage beyond just having a low rate:
1) Make accelerated payments instead of regular monthly payments. The calculation of simply switching your payment frequency from Monthly to Bi-Weekly Accelerated on a $200,000 mortgage (4.00% interest rate, 25 year amortization) would only save you $614.53 in interest over 5 years, but you would kill off an extra $5,874.73 of the principal balance of your mortgage in the same time period. The faster your mortgage is gone, the better off you are!
2) Spending $4 per day on your mortgage: that’s only $120/month, or $1440 per year as ‘forced savings’ if you upped your minimum payment OR put it down against the mortgage as a lump sum annually. There isn’t a GIC or government bond out in today’s market that would provide you with the same rate of return as your mortgage is costing you!
Along the same lines, think of maybe rounding off your monthly payments to the next hundred-dollar figure. Your mortgage commitment may show that your payment only has to be $835.63 per month, but would you REALLY miss the extra ~$64 per month from your ‘arbitrary spending fund’ if you were to round your mortgage payment off to $900 monthly? Probably not, but you won’t miss your mortgage once it’s gone, now will you?
3) Roll your RRSP and overall tax refund, pop bottle return fund and other ‘extras’ into an annual lump sum downpayment. Chipping away at your mortgage’s principal bit by bit may not feel like a big ‘win’ each time that you do it, but the end result could be that you finish paying the mortgage off in 15 years instead of 25.
… and at that time, what would you be able to do with another $900 per month?
4) Don’t settle for the rate that your current lender throws your way as your mortgage term comes to an end. We wrote a similar post a few months back that covers the ins and outs of how just signing on the dotted line can cost you thousands.
Want to get a free, non-obligational check-up on your mortgage and learn about how much you can save? Contact us today and we’ll help you on your way to becoming mortgage-free sooner than you knew were possible!
Committed to your financial success,
James C. Tworek and the Trimor team!
Self-Employed Professional in Personal Finance, Sales and Marketing with 11 years' experience. Partner, currently working as the Director of Corporate Development for Trimor Home Finance.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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