15 Jun

Could a Purchase plus Improvements be the answer?

General

Posted by: Garth Chapman

Turn the house you like into the Home you will buy!

Government restrictions on refinance guidelines have reduced the equity homeowners can access for renovations. High ratio buyers especially, in a market with slow growth value, may wait years before the house has appreciated enough that an 80% Loan to Value refinance provides any money. If home buyers want to do upgrades the time of purchase may be the only opportunity where they can add the cost of the renovations to the mortgage.

Use the Purchase plus Improvements to:

  • Add a new or updated kitchen
  • Develop the basement for more living space
  • Update or replace the carpeting or maybe adding hardwood
  • Add a garage or workroom
  • Add a media room or “man cave”
  • Add an additional bathroom
  • A new roof
  • A more efficient central air or furnace system
  • Add new siding, eaves or fascia
  • Replace or updating doors and windows
  • Add major landscaping

If the property isn’t exactly what you want: renovate, add, or upgrade it!

There are specific requirements for the purchase plus improvements program, please call to learn the details. Exceptions to the generally understood parameters are available. Renovating up front may be a buyer’s best option.

15 Jun

Is A Variable Rate Mortgage Wise In Today’s Economy?

General

Posted by: Garth Chapman

Ever since the variable rate mortgage was introduced, the question became do I choose the fixed or variable rate mortgage.  With the recent rate increases, borrowers will usually choose the security of a fixed rate mortgage.  This does, however, come with a premium as variable rate mortgages are generally 0.75% less than their fixed counterpart. On a $350,000.00 mortgage, this translates to a payment difference of about $135.00 per month. You as the borrower can take the lower payment and use it for purposes such as:

  1.  Debt reduction –  Paying down higher interest rate debt such as credit card, lines of credit or accelerating loan repayments on personal loans.
  2.  Savings–   Invest in RRSP’s or RESP’s for your children’s future education or just keep it in liquid savings for future use.

 

The preferred method of using the payment savings would be to increase the payment on the variable rate mortgage to that of the fixed rate mortgage. The increased payment portion will assist in the faster reduction of the principal on your mortgage. This will help to reduce the impact of prime rate increases over the term of the mortgage.  If the prime rate does increase according to what the economists are predicting, we can anticipate increases in the prime of approximately 0.25% six months for at least the next 18 months.  This would now bring the variable rate mortgage to the same rate as what your fixed rate mortgage would have been.  With having to use the increased payment you would still be ahead, as initially, you had the rate savings plus the increased reduction in your principal.  If the prime continued to increase by the same 0.25% every six months, it would take over 3 years for the variable rate mortgage not to outperform the fixed rate mortgage.  If the prime rate increases don’t occur as predicted, then the pendulum swings greater in the favour of the variable rate mortgage. The variable rate mortgage also offers the same prepayment options as other mortgages plus you have the benefit of lower payout penalties should the need to sell arise.

The variable rate mortgage does have the inherent risk of the prime rate increases, so if you the borrower feel the need for security opt for the fixed rate mortgage. Jencor Mortgage Corporation will be able to assist in getting you the borrower, the best rate for your individual circumstance.

12 Jun

Why Use a Mortgage Broker?

About Mortgage Brokers

Posted by: Garth Chapman

A professional mortgage broker has your interests in mind. They have the knowledge and experience to save you time and will act as a valuable partner throughout the entire mortgage process, expertly handling complex details with the real estate agent, lawyer, lender, and the credit agency. We have the negotiating power and expertise to offer you the best choices available for your specific needs.

  • Jencor Mortgage is independently owned and operated; working for you, not the banks. We believe in unbiased independent advice.
  • Since we’re not affiliated with any one lender, Jencor can offer you the widest choice of mortgage options from dozens of different sources. That includes Canada’s largest banks, insurance firms, pension funds, private lenders and more.
  • Because we place thousands of mortgages each year with different lenders throughout Canada we can obtain rates that are consistently lower than many other Canadian brokers.
  • Because we specialize in mortgages and nothing else, we’re always aware of the latest products on the market. If a mortgage that suits your needs becomes available, we’ll know about it immediately and make sure it’s part of the choices we offer you.

And…all this comes at no cost to you, as we are paid directly by the mortgage lenders.