Mortgage Guide

Antonio Redford asked:


A sudden financial shortage can be difficult to handle even for people who have invested sufficiently for their future and planned ahead for their every financial need. It becomes especially difficult for a retired, senior citizen who needs to spend his remaining life on saved income as the regular inflow of money stops with the retirement from active service. However, raising financial support can be an easy task if you own your own home. The traditional home loans are one way of dealing with a financial need but the more feasible option is the reverse mortgage on property. The multiple benefits of such a loan plan makes it a much preferred option for most retired, elderly people. However, no matter how tempting the offer, be sure to find out all about the terms and conditions and the reverse mortgage rate before you finalize any financial deal such as a mortgage agreement.

The reverse mortgage rate differs from lender to lender and you may need to hunt around for the lowest terms that you can get on such a deal. Such a deal is the preferred choice as you need not repay the amount of the loan for as long as you remain in the mortgaged property. The reverse mortgage rate may be either fixed or variable and you need to make a choice according to your comfort level and long term benefits. One limitation of the fixed rate reverse mortgage is that the borrower must take the whole amount of loan as lump sum payment whereas in variable rates, he may opt for a monthly installment system. Even line of credit is not allowed in the fixed rate of interest on a mortgage deal as the comparative risk on such rates is much lower for the lenders.

Many elderly house owners prefer to opt for the monthly installment form of payment of the mortgage loan and as a result opt for the variable reverse mortgage rate. However, if you have bad credit history then you may want to consider the fixed rate as such form a mortgage will not consider a bad credit history in the past of the borrower and makes it easier for people with a poor credit rating to get a loan. So even low-income group citizens can easily opt for a reverse mortgage on a home for which they have paid themselves and accordingly select the rate of interest.

The borrower can get a low reverse mortgage rate if he can fully utilize the advantage of competition between the various mortgage lenders. Each lender’s rate will vary depending on their margin, which is the amount that they charge as the interest over and above the amount of variable treasury-based mortgage rate. So, the reverse mortgage deal can be a feasible option for you to get a loan against your property provided you have done your homework well. A through background research on the various mortgage rates and the lenders and the terms and conditions of the deal will help you opt for a deal that fulfills your requirements in the best manner possible.

Roland

Flea asked:


Will mortgage rate fall below 5% in the new year, will inflation raise greater than 3% will the US dollar ever match the British pound what do you think? Serious educated discussion please.

Esther

TJR asked:


I’m looking for a better home loan mortgage rate than I currently have with my bank. So I am seriously considering refinancing. Does anyone know where I can currently check for the lowest refinance home mortgage rates?

Cecil

RateSupermarket.ca asked:


In a nutshell, a mortgage broker acts as the ‘go-between’ a mortgage borrower (you) and the lender (typically the big Canadian banks).  Mortgage brokers act on your behalf offering their expertise and contacts for free, and receive their commission from the lenders only once a mortgage is arranged.  There may be charges for their services if you have an exceptional situation, such as very poor credit, as they may need to spend more time on your application.
Mortgage broker’s are able to get the best rates for homebuyers and their rates are typically discounted when compared to the big bank’s posted rates because they arrange so much volume for the lenders (almost $50B last year).  As a result, many times the banks and other lenders compete amongst themselves to offer the broker the best rate in order to secure their business.  Many deal with over 65 lenders, and this is the reason why they can get the best rate for almost any person’s situation.
The residential mortgage market is extremely lucrative and competitive, as there were $191B worth of mortgages approved last year by 80+ lenders.  As a result, mortgage brokers are becoming more popular as more people are turning to them to find the lowest mortgages, representing an estimated 25-30% of mortgages being arranged according to Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals (CAAMP).
Many people aren’t sure where brokers actually source the mortgages from.  A recent report by Canada’s leading mortgage systems supplier, showed that mortgage brokers secured home loans through the following channels through their network in April 2008:
·         Banks:                    50.68%
·         Mortgage Banks:      41.92%
·         Sub Prime:                4.25%
·         Credit Unions:   3.14%
The actual mortgage rate arranged by the broker, could be influenced by many factors, some of which are:
·         What type of mortgage (open or closed) are you looking for?
·          Is it a fixed rate mortgage or variable rate mortgage (adjustable rate mortgage ARM)
·         Is this a single home mortgage loan?
·         Or do second or third loans exist?
·         How long do you want the mortgage amortized over?
·         Is this is a refinanced mortgage?
As is the case with brokers in other industries such as insurance, mortgage brokers are generally former employees of the lenders such as banks. As a result, they know the ins and outs of the industry, who to contact and where to find the rates across Canada.  If you’re looking for help arranging your next mortgage, a mortgage broker, may just be a sound option.

Raymond

Keith George asked:


Very low mortgage rates have been instrumental in increasing the purchasing power of millions in the US, Europe and around the world. For one year mortgage rates are on the rise and home prices leveling out. Foreclosures are becoming more common, especially in the American Midwest, but it is still on a low level. We can now expect a gradual rise in mortgage rates the coming year. The 30-year rates will likely continue to rise in the upcoming months, but should not go past 7% in the US. In Europe the 5 year interest rate is around 5-6%. So if you plan to get a fixed rate loan, you should act quickly because mortgage rates are predicted to push past 7% in the US over the next few weeks.

The second mortgage rates on high loans to value loans above 90% on real estate investment properties can come close to 20%, even if you have a very good score. It might be a good time now to refinance your home or get a mortgage loan with attractive rates. Search the Internet and you will find a lot of online companies offering low mortgage rates all over the country.

A survey that was performed recently shows that there is a increase of foreclosure rates and delinquent mortgage payments across the country. Also lenders, just like consumers, feel the effects of a slowing economy and rising mortgage interest rates. No wonder we hear lots of discussions about rising mortgage interest rates.

A forty-year mortgage rates offer lower monthly installments, which suits the needs of first time home buyers as well as borrower who otherwise do not qualify for any other option. Of course there are many factors that can affect the mortgage rates but mortgage rates should be relatively stable for the foreseeable future.

Some persons prefer to have a fixed mortgage payment to maintain their peace of mind. Then you should have it and if you took the loan a couple of years ago you certainly made the right choice. For others there are a wide range of options currently available.

With an adjustable rate, the rate of interest is linked to factors like the Prime Rate. There are also other variations of the adjustable interest rate. As said before, if the market appears to be on a longer rise, locking in a fixed rate now can save you money in the future.

It is impossible to mention the rates individually, as there are a wide number of factors and statistics involved and they vary from day to day. It also depends on when you happen to read this article. Often the credit companies are also skeptical in offering the forty-year mortgage rate option to their customers as there are other existing ways of reducing monthly payments.

Searching on the Internet, using lowest mortgage rates as keyword, will provide you detailed information on Compare Low Mortgage Rates, Lowest Commercial Mortgage Rates, Lowest First Mortgage Rates, Lowest Fixed Mortgage Rates and more. That is an excellent way to get the basic facts for the time being and will give you a better understanding of which plan to choose.

Robert

Cutman asked:


When the Feds cut rates, short term debt like credit cards and HELOCs go down. But why do mortgage rates increase?

Sue

MT asked:


I am looking for a FHA 30 fixed loan and want some lenders with the lowest rates. It is usually around 6% but if you have a lender that can offer lower I want to know. Please only Colorado lenders because each state has different laws.

Nancy

cardinalfanusa asked:


I keep hearing that mortgage rates will probably hold steady until mid-2008. They’ve already increased from 6.15 to 6.75 in the past 6 weeks. I’m building a house, and won’t be able to lock in a mortgage rate until probably mid-August. Should I “buy” my mortgage rate at 6.75% now for $750, or should I hold off?

What are the odds that rates will top 7.25% within the next three months?

Eddie

The House Team Of Mortgage Intellingence asked:


“Lower than prime,” you heard someone say. Like most Canadians, you were probably first skeptical and then confused. We tend to think of the prime lending rate as the invisible “floor” of lending rates. The very best customers can get very close to that floor. It is theoretically possible, we reason, to actually be ON the floor, but not possible to be below it.

Nevertheless, Canadian lenders offer mortgages at prime minus 0.5% to even minus 0.7%. So the floor isn’t the lowest you can go. There’s something under the “floor”. The rate known as “prime” has been the popular benchmark for lending in Canada. When business reporters talk about interest rate movement, they usually talk about what’s happening with prime. But there are other benchmarks in money rates, though they are typically for use by professional money managers. The most significant of these is the Banker’s Acceptance rate.

While “prime” is a set rate which is offered to a lender’s best customers, the Banker’s Acceptance is the rate which financial institutions use to lend money to one another. And it’s typically well below the prime rate. Look for the “Money Rates”section of your favourite newspaper, and you can compare Prime with the Banker’s

Acceptance rates for yourself. “Interesting,” you think, “but why does it matter?” Well, as new lending institutions begin to offer a slate of innovative new loan options, a new mortgage has emerged that is based on the Banker’s Acceptance rate: offering a mortgage rate of 1% over the 3-month Banker’s Acceptance.

If you compared the rock-bottom prime-based variable mortgage rate - prime less 0.5% to 0.7% - with the new adjustable BA-based rate, you would find that the BA-based rate would have delivered significant savings over the past several years, as rates were dropping. There are two reasons for this. Firstly, the BA-based rates have historically been considerably lower than prime. Secondly, the prime rate tends to be “stickier” in an environment where rates are falling. Often, the more fluid, market-based BA rates deliver the rate change more quickly.

Any variable- or adjustable-rate Ontario mortgage is an excellent option when interest rates are either dropping or stable. Not surprisingly, they’ve been a very popular choice in the past few years. There are some rumblings now that rates may begin to increase, but flexible-rate mortgages still remain an excellent choice for those looking to save some interest.

As always, you should consult with a mortgage professional to find the mortgage that suits your personal financial needs. An independent mortgage broker can provide you with information on a broad range of mortgage options from a wide variety of lending institutions, so you can compare features and options at a glance.

And remember, it’s worth taking some time to look beyond prime and explore what’s “under the floor” in mortgage options!

Lillian

Jessie-James asked:


I come out of a fixed deal in August 2008. What are my chances of the mortgage rates being a bit better by then?
I live in the UK.

Colleen