- On August 15, 2013, Sutton Group – Incentive Realty Inc.* will be hosting their 10th annual fundraising golf tournament and welcome public participation. This golf event plus their community barbeques have generated approximately $50, 000 for the cancer care centre at Barrie’s Royal Victoria Hospital since 2003. Prior to the development of [...]
Delta, BC – one brave Sutton REALTOR® is willing to put his mouth where his heart is (so to speak)! Ben Lim volunteers in his spare time as a dog walker at the Richmond Animal Community Shelter and plans to participate in the SPCA’s Paws for a Cause walk in September. He has pledged to [...]
Although there is a growing trend towards alternatives, lawns remain the dominant landscape feature of many Canadian homes. Lawns provide open views and a wear-tolerant soft surface for active recreation and they are relatively inexpensive to install. [...]
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5 tips for throwing a fun and successful garage sale
It happens every year. As soon as the weather starts warming up, the urge to purge the junk begins. This summer why not put the “someone else’s treasure” adage to the test and throw a garage sale? It’s a surefire way to get rid of the stuff you don’t need, help someone else find that perfect-something and make a little pocket change to fund your summer vacation. Read on for our 5 steps to make your garage sale a success. [...]
Today I am here to chat about mortgage penalties. Why I’m getting a lot more questions about mortgage penalties from clients in the past couple of months? What is the normal mortgage penalty range you could expect? Also, will it be worth it for you to cancel your current mortgage, pay the penalty, and get something at today’s lower rate?
1. How come mortgage penalties seem to be coming up in the news?
You may have heard your friends and family talking about this. That’s because interest rates have remained so low for such a long time. Alot of people thought that interest rates were going to be rising back up over the past years and the economic situation just hasn’t allowed for that. Interest rates are still super low and people are finding that it’s a great time to be refinancing or to be switching out your mortgage. If you’ve got a higher interest rate of 4 or 5% and you’re looking at today’s interest rates at 2 or 3% and thinking “why am I paying 2% extra”?
An average mortgage penalty depends on the mortgage that you have. Every bank and lender is different in how they calculate mortgage penalties. They should have explained it to you when you got your mortgage and they should have gone through exactly what your needs are. If you wanted a long term mortgage, they should have explained exactly how the mortgage penalty is calculated, and that it could be a large penalty or if it’s only going to be very small, then you might be in something that’s perfect. If you’re now going to your bank and you’re checking and you’re surprised to find that you’ve got a really large mortgage penalty, something has gone wrong. You shouldn’t be caught off guard like that.
In general, for a variable rate mortgage you might get a 3 month’s interest penalty. So that’s just maybe 1.5 mortgage payments as a sort of a ballpark of what your penalty would be. For a fixed rate mortgage nowadays, it’s usually the interest rate differential, not always, sometimes it’s also the 3 months of interest. The interest rate differential is exactly what the name implies. It’s the difference between your interest rate and the current interest rate. If you’ve got a higher interest rate, you’re basically paying the difference to cancel your mortgage so your penalty could be as small as a couple thousand dollars and as high as 15-18 thousand dollars. Very large penalties could occur.
We did a blog post in the past regarding a poor gentleman who had an incredibly large mortgage penalty, so go back in the archives and look for that if you want to see what the upper limit of this is and be aware when you’re getting a mortgage. When you’re signing it on, exactly what penalties are calculated and if you’re ever going to run into the scenario, if you’re ever going to be susceptible to paying mortgage penalties, maybe you should be looking at a different mortgage product or term.
2. How do you know if your mortgage penalty is worth to pay off?
It’s pretty easy for us to calculate. I do suggest you contact your local mortgage broker to get the proper calculation or call us here at Finder Financial Services because you want to make sure that you’re taking into account the penalty itself as well.
If your penalty is going to be added into your mortgage, so even if you’re paying a lower interest rate, you’re now paying a larger mortgage amount, you’re paying more interest each payment, and each payment is going to be larger because you’re paying an extra 10 or 15 thousand dollars on the total mortgage.
A lot of people forget this. If you go to your bank and they do a comparison, a lot of times, this is missed out and you think that you’re getting a great deal, you’re going to be paying off your mortgage really quick, and your penalty is going to be paid off soon, but a lot of people have completely forgotten to take into account the penalty as well. It’s got to come from somewhere.
If you’re interested in this, just give us a call at 1-866-924-5244. I will be free to do a comparison calculation for you.
Today I’m here to invite you for our next upcoming meetup. We are going to be meeting up on November 17 in Burnaby, BC.
We’re going to be chatting about financial planning. This has always been an interesting topic for us. We’ve got a great guest speaker lined up and we’ll share with you those details if you go to meetup page.
We wanted to chat about financial planning because the whole aspect of investing in real estate, buying a home for you to live in, is part of your financial planning. We wanted to know if in this strategy. Would this be something that you can count on as part of your retirement? Are other vehicles, like investments or RRSPs, better options than investing in real estate? How does that really fit into your future plans?
We’ve got an expert guest speaker lined up to join us on November 17. Check up our meetup page for the full details.
Thursday, Nov 17, 2011
2nd Floor – 3012 Boundary Road Burnaby, BC Visit our website!
A quick Bank of Canada benchmark rate update:
The Bank of Canada benchmark rate did increase to 5.29%. If you’re not sure what that means, check out some of our old blogs, call us at 1-866-924-5244 to see how does a Bank of Canada benchmark rate change affects you. Are you making a down payment less than 20%? Are you making a 5% down payment or 10% down payment? This might really affect how much mortgage you can get. We’ll also tell you how you can get around that.
Welcome to the Sutton Member Program booth at the Sutton National Conference in Las Vegas at The Mirage!
I just wanted to invite you here and give you a glimpse of what we’re doing with Finder Financial Services. We’ll put clips of the different booths that are going on. There’s lots of fun to be had and it’s really interesting!
Today we have some mortgage news for you guys. The benchmark rate in Canada, the Bank of Canada benchmark rate, should be dropping down to 5.19%. That’s a drop from 5.39% down to 5.19% which is quite a big difference. For those of you qualifying for mortgages and you have a smaller down payment, you could actually qualify for a larger mortgage right now.
If you would like more information, give us a call at 1-866-924-5244.