Michael Fallah Mortgages
1010 Ranch Park Way V3C 2H1 Vancouver, BC, Canada

http://www.cmhc.ca/en/co/moloin/index.cfm

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Banks maximizing mortgage penalties again but there’s a bright side.. July 4, 2013 Steve Garganis BankstersIn case you haven’t heard, Fixed rates are up around 0.50% over the last 3 weeks. But the Banks haven’t increased their posted rates How can that be?? And how does that affect you?... The BIG SIX BANKS have played the rate guessing game for as long as I can remember.. This time, they’ve added another twist to ensure you will be paying those inflated penalties even longer.. By not increasing the posted rates, they ensure themselves any existing BANK customer will pay the same inflated penalties. Look back to 5 years ago when fixed rate discounts we around 1.10% off Bank posted rates.. Now fast forward to May 2013. Rate discounts reached an all-time high of 2.25%. And whether it was by design or not, this inflated your penalty by the same margin. (I’ll let you decide if this is just good old BANK luck yeah, right.) You see, if you took a BIG SIX BANK fixed rate mortgage, and you had to exit your mortgage early for any reason.. let’s say you to sell your home, or you had to refinance early, your penalty is calculated using whatever discount they gave you. The bigger the discount, the bigger your penaltyget it? Record level of discounting equals record level penalties click here to read more on how the penalties work. This is why you are seeing penalties in the $15,000, $20,000, $25,000 range and higher. But now the bright side. For those of us that still insist on getting a Fixed rate mortgage through the BIG SIX BANKS, these new rates will reduce the amount of your discount. Which, in turn, reduces the amount of penalty. It’s not much of bright side, but it’s something.. Maybe, this is the wake up call for loyal BIG SIX BANK customers Maybe this will make BANK customers think twice about just taking the BANK medicine maybe they’ll get a second opinion from an unbiased Mortgage ExpertYou don’t need to pay any form of inflated penalty. There’s always been a better option. I’m still amazed at how many consumers think their local BANK branch is the best option There are several other NON-BIG SIX BANK lenders offering superior mortgage products with superior terms and privileges including FAIR penalty calculations with incredibly competitive rates usually better than the BIG SIX. Take off the BANK handcuffs. When and if you ever need to sell, or refinance, or exit your mortgage early, you won’t have to deal with these inflated penalties In other words, don’t put yourself in the position of being exposed to these crazy BANK penalties. Speak with an experienced Mortgage Broker than can offer you options from a number of Lenders and Banks Your best interest is my only interest.

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Beacon score info you may find useful

why you should use a mortgage broker and not a mortgage rep from the bank http://www.theglobeandmail.com//your-bank-/article8434388/

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Follow these 5 commandments to help boost your retirement savings 2013-02-06 Everybody says you should save for retirement. The problem is they don’t tell you when to save, where to save, or what to save. So here are my 5 Commandments to Retirement Saving: 1. Thou shalt save a lot when you can, but not when you can’t. This means there are periods in your life when saving is much easier than others. Don’t feel so guilty about not being able to save much during your most expen...Continue reading

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Strategy: Inflating Your Mortgage Payments A meagre 1 in 4borrowers made extra principal payments on their mortgage last year. That small percentage could be explained by: Lack of disposable income Better uses of cash elsewhere... Perceived hassle of making prepayments Indifference; and/or, Misunderstanding the compounding benefit of principal payments. Whatever the case, there are easy ways to make extra payments and erase your mortgage many years sooner. What follows is a basic strategy to shorten your effective amortization dramatically, and barely make a dent in your bank account. The idea isn’t fancy. All you need to do is increase yourmortgage payments each year to match the rate of inflation. Over the long-haul, inflation has come in at about 2% on average. Two percent also happens to be a reasonable expectation of annual wage growthat least according to long-term averages and income growth forecasts. If you’re a typical Canadian family earning $68,860* a year, 2% wage growth suggests you’ll make about $1,377 more next year. So, given the above, let’s consider the median Canadian family with a typical mortgage (e.g., a $250,000 loanfixed at 3.99% interest, with a 30-year amortization and $1,187 monthly payments). If a borrower proceeded down this path and simply paid this mortgage as required, he/she would fork out more than $177,000 in interest over 30 years. But suppose that person increased his/her monthly payments to match inflation every year. With a 2% annual payment increase, the payments would look like this: $1,187 Initial payment $1,211 Monthly payment in year 2 $1,235 Monthly payment in year 3 $1,260 Monthly payment in year 4 etc We’re only talking about a $24 a month payment increase at year oneor just $288 a year. That should be within reach for most people (assuming their annual income rises accordingly). That seemingly insignificant bump in monthly payments does wonders for one’s amortization. Instead of coughing up $177,458 in interest over the life of a mortgage, this borrower would pay just $135,505 and slash his/her mortgage payoff time by eight years. If you have a 30-year mortgage and applied a similar strategy, your mortgage could be paid in full in just 22 years. Even better, if you can afford to increase payments by 3% a year (just $35.62 on top of your regular payments after the first year), you could shrink your amortization down to 19.75 years. As this example shows, tiny mortgage prepayments can have a dramatic compounding effect. Moreover, there aren’t many ways to get a better risk-free return on your disposable income. Prepaying a 3.99% mortgage is like earning a ~6% pre-tax return (for those in a 33% marginal tax bracket). ________________________________________ * Sidebar: $68,860 is the latest median family income data from StatsCan. It’s actually data from 2008 but it suffices for illustration purposes. ________________________________________ Rob McLister, CMT See more

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BC first time new home buyers bonus.

Why use a Mortgage Broker November 24, 2011 SG There was an article in the Globe and Mail recently entitled ‘Why use a mortgage broker?’. No, this image wasn’t part of the article but it’s an image that many will conjure up when we hear the word ‘Banker’.... The article talks about why Financial Planners and other professionals will recommend, and work with, a Mortgage Broker vs. having the client go directly to the Bank. Here’s a few quotes from the article that make it easy to understand. It’s the most efficient way to get the best-priced and best-structured mortgage. So rather than shopping at multiple financial institutions and negotiating with each financial institution and arm wrestling them to give you the best deal, it’s one phone call and they do the rest for you. And here’s some facts from a Bank of Canada review published in February 2011 entitled ‘Competition in the Canadian Mortgage Market’: This one is no surprise. The results also indicate that borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly. Here’s one that may surprise many of you The results also indicate that higher income households pay higher rates, on average, than lower-income households. And here’s another one Banks also offer larger discounts to new clients than to existing clients. I’ll add a few more of my own. A broker shops the marketdoesn’t work for any one lender but instead works for the borrower.. and provides the borrower with clear, neutral and unbiased advice. Brokers save borrowers money and will continue to shop for better rates at renewal and throughout the life of the mortgage

The Best Mortgage Brokers There’s been a debate underway in Saturday’s thread about what characteristics comprise the best mortgage brokers. Someone said that the best brokers were not salespeople, but educators. That was shot down by another, more cynical reader who felt commissions are our master.... For what it’s worth, here’s our take on the whole thing The reality: Brokers are not created equal. To say that we are is like saying lawyers never overbill or mechanics never fix things that aren’t broken. There are thousands of mechanics, lawyers and brokers that are good people and put their clients first. It’s those bad weeds that spoil the garden. Despite that, the fact remains that the best brokers make their interests subordinate to their clients. (Note, that "best" as used here, doesn't refer to simply the highest volume brokers.) "Best" refers to the brokers most capable of delivering: a) the lowest overall borrowing cost (not just the lowest rate), and/or b) the most satisfying mortgage experience. Consumers are not all the same. Far from it. Some folks value things like time savings, certainty of closing, long-term debt-reduction/wealth-building strategies, credibility, and hand-holding throughout the process. Others would rather climb Everest to shave 10 basis points off their rate. God bless them all. Per above, we can’t speak for all mortgage advisers, but we know one thing: the best ones never recommend inferior mortgages because they pay more. There are at least three reasons for that: First, many mortgage professionals prefer to earn an honest living. That tends to make it easier to get out of bed in the morning. That’s why the best brokers quote the lowest rate they have available, right out of the gate. Some, albeit the minority, even refer clients to RBC, BMO, and HSBC when that best serves the homeownereven though those lenders only pay commission to their bank employees. Secondly, doing the right thing makes good business sense. People can detect from a mile away when someone is "selling" them versus "helping" them. It's therefore much easier to meet a client's "smell test" if you, the broker, would choose your own recommended mortgage plan for yourself, were you in the borrower's shoes. Otherwise, you do things (often subconsciously) to sabotage your client relationships. Lastly, it can never be overstressed that brokers live off of referrals. The fact is, people don't refer business to those they don't like, respect and trust. Making it long-term in this biz means exceeding expectations in those three areas. That and adding uncommon value are what define the best of the best brokers. Rob McLister, CMT