Mindset
New Member
I like the idea of Manulife One. I think thats the best way it you want to pay-off your mortgage as quickly as possible. Yes I know the rate would be higher than a variable mortgage, but overall interest paid would be less.
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Mortgage Payments
- Thread starter argos
- Start date
ckash16
New Member
nfitz
Superstar
I think he was referring to what happens at the 5-year point.
argos
Active Member
Something weird just happened in the past week.
On Feb 2 i received a Mortgage Rate Adjustment/Update... my rate went down to 1.25%!! I felt like i won the lottery!
However, on Feb 6, i received the same letter and the rate went to 2.65%!!
All this happened within a week timeframe.
Could this have happened due to system error??
On Feb 2 i received a Mortgage Rate Adjustment/Update... my rate went down to 1.25%!! I felt like i won the lottery!
However, on Feb 6, i received the same letter and the rate went to 2.65%!!
All this happened within a week timeframe.
Could this have happened due to system error??
dpylyp
Active Member
Eliminating Mortgage
You could also take out a (eg) $10,000 credit line. Pay the entire amount on/ to your mortgage. Use your monthly cash flow over the next year to repay (eliminate) the credit line and then repeat the process the next year.
Using this method could shorten a mortgage duration by half, and avoid huge compounded interest calculations by paying simple interest on the credit line.
(reduces the effect total yeild on the mortgage)
Yes, this will take discipline.
The best mortgage is no mortgage.
You could also take out a (eg) $10,000 credit line. Pay the entire amount on/ to your mortgage. Use your monthly cash flow over the next year to repay (eliminate) the credit line and then repeat the process the next year.
Using this method could shorten a mortgage duration by half, and avoid huge compounded interest calculations by paying simple interest on the credit line.
(reduces the effect total yeild on the mortgage)
Yes, this will take discipline.
The best mortgage is no mortgage.
cabbagetowner
Active Member
only a good idea if the cost of the credit is cheaper than the mortgage. which is hardly ever the case.
cacruden
Senior Member
I am on variable rate right now, and it is usually the better option - BUT - if a fixed rate is 5.25% and variable 3.5% you should really pay as if you have the 5.25% interest to reduce the principal quickly. Most mortgages have the option of paying down an additional 15% of the ORIGINAL principal - which you should seriously consider doing to reduce the risk of an interest rate spike in a few years. Paying more frequently - lowers the amount of interest that you have to pay during the term.
I believe interest rates (variable) will remain low for the next 2 years, but after that - there is a high risk interest rates will start going up rapidly.
I believe interest rates (variable) will remain low for the next 2 years, but after that - there is a high risk interest rates will start going up rapidly.
northstar
New Member
This is the thing I think a lot of people are missing. BOC Interest Rates are at 1% - and could go lower.
This means a lot of people's Line of Credit is at 5% or 6%, which is possibly lower than many people's mortgage rate.
Notwithstanding doom & gloomer's rants, much of the reason for increases in house prices over the past decade
is due to the fact that mortgage carrying costs are significantly lower than they were in the 1980's and 1990's.
While I'm certainly not suggesting that house prices will continue to climb,
people are misguided if they think house prices are going to plunge off a cliff.
30 year mortgage rates in the US are now below 5%, and this expense is tax deductible!
Much of the reason that more houses aren't selling in the USA is because banks have virtually stopped lending money.
If Obama ever succeeds in getting banks to start lending again, then I'd expect many houses in the US will be snapped up in a hurry.
With US Federal interest rates close to 0% - it will be unquestionably cheaper to have a mortgage than to be paying rent.
Fence sitters who salivate at the prospect of lower house prices, may ironically be kicking themselves in a few years for missing the opportunity to buy when both the price of a house as well as the cost of a mortgage were at a low point in the economic cycle.
cacruden
Senior Member
There was a massive housing bubble in many high-population areas in the US (California, Nevada, Florida, etc.). Forclosures force house prices to correct (actually over correct, since they are almost auctioned off). House prices in these states have to correct back to the standard affordability rates (average over time) before the economy will bottom - and the earliest you will see a bottom is September. There are around 19 million units available on the market now, annual attrition (without purchases) - is around 750,000 - 1,000,000 due to fires, floods, etc., the current construction of new units is around 500,000....... there is still a massive oversupply that must be brought down first.
jetsme
New Member
It's not just about interest rates. With the huge job losses we have been seeing and will likely continue to see, it doesn't really matter how low the interest rates are - people with no jobs simply can't buy properties.
Therion
Senior Member
Here's a question to the mortgage experts.
I inquired into breaking my current 5-year fixed mortgage (which is at 5.24% and has 3.5 years left) and refinance at the current lower interest rates. I was under the impression that the penalty for breaking a mortgage is 3 months' interest. It is actually the percentage difference between my rate and the current rate, multiplied by the time remaining on the mortgage, so it makes no sense to refinance.
However, what would happen if I bought a new house? Can I pay off the old mortgage with the money I got when I sold my current place without the huge penalty, and refinance the new purchase with a fresh mortgage?
I inquired into breaking my current 5-year fixed mortgage (which is at 5.24% and has 3.5 years left) and refinance at the current lower interest rates. I was under the impression that the penalty for breaking a mortgage is 3 months' interest. It is actually the percentage difference between my rate and the current rate, multiplied by the time remaining on the mortgage, so it makes no sense to refinance.
However, what would happen if I bought a new house? Can I pay off the old mortgage with the money I got when I sold my current place without the huge penalty, and refinance the new purchase with a fresh mortgage?
taal
Senior Member
Quick question,
after you sign an agreement to purchase a condo what happens if:
1) You do get approved for all financing within the initial period and the contract is made official BUT:
2) You lose a job or something along those lines.
Is there a way of backing out with or without penalty?
after you sign an agreement to purchase a condo what happens if:
1) You do get approved for all financing within the initial period and the contract is made official BUT:
2) You lose a job or something along those lines.
Is there a way of backing out with or without penalty?
taal
Senior Member
Thanks! I got the details now:
1) You will lose you deposit in most circumstances
2) Sometimes ... once the unit sells, if it sells for less then what you were offering the owner can sue for the difference!
1) You will lose you deposit in most circumstances
2) Sometimes ... once the unit sells, if it sells for less then what you were offering the owner can sue for the difference!
Yossi Kaplan MBA
Realtor
Porting a mortgage
Most lenders will let you "port over" the mortgage, while adjusting to current rates.
Most lenders will let you "port over" the mortgage, while adjusting to current rates.
Yossi Kaplan MBA
Realtor
Lost my job - what's about my deposit?
1 - you can negotiate before signing and ask for a "lost job" clause. especially these days.
2 - if you are stuck and did not have the clause, you can try and assign your unit and recover your deposit.
3 - if all fails, ask the builder for their help. if the value of your unit is higher now then when you purchased it, they may give you your deposit back - have seen this happening.
4 - call your lawyer (for all cases)
thx
1 - you can negotiate before signing and ask for a "lost job" clause. especially these days.
2 - if you are stuck and did not have the clause, you can try and assign your unit and recover your deposit.
3 - if all fails, ask the builder for their help. if the value of your unit is higher now then when you purchased it, they may give you your deposit back - have seen this happening.
4 - call your lawyer (for all cases)
thx