name: nilson nilson Jack
Mortgage Rates GOING UP FAST!
22 June, 2009
I have been following mortgage rates for a while. About two-three weeks ago, a person could get 3.50-3.65% for 5
-year-fixed (historically low). Right now most major banks are offering 4.50-4.55% for 5-year-fixed.
That is one full percentage increase in less than a month!!! However, there's life besides 5-year fixed!
Those of you who are thinking of purchasing, please do yourself a favour by getting pre-approved by a bank so you can lock-in your rate for 60-90 days. Most lenders will guarantee you the lowest rate during the pre-approval period.
Some lenders, such as HSBC are still offering 3.50% for 3-year fixed. It's not a bad alternative. I believe Scotia has a good 4-year fixed. Shop around!!
For investors who are looking at short-to-mid-term inestment horizon, it is ideal to do 3-year fixed for now and then switch to either home equity line (interest only payment option) or variable rate mortgage (hopefully by then it would be prime minus). Keep your options open when it comes to revenue property (short term strategy).
Another great strategy is to lock in your principle residence with fixed-rated (such as 5-year fixed); and choose shorter fixed rate term or variable for investment property. So when you sell your investment property in 2-4 years time, you can avoid or minimize early payout penalties to maximize your profits. Plus, most lenders also allow you to make 10-20% bulk payment towards principle. So it would be a good time to pay down the mortgage of your own residence since the interest is not tax deductible.
GOOD LUCK INVESTING OR BUYING!!
Debt Consolidation
Home Equity
That is one full percentage increase in less than a month!!! However, there's life besides 5-year fixed!
Those of you who are thinking of purchasing, please do yourself a favour by getting pre-approved by a bank so you can lock-in your rate for 60-90 days. Most lenders will guarantee you the lowest rate during the pre-approval period.
Some lenders, such as HSBC are still offering 3.50% for 3-year fixed. It's not a bad alternative. I believe Scotia has a good 4-year fixed. Shop around!!
For investors who are looking at short-to-mid-term inestment horizon, it is ideal to do 3-year fixed for now and then switch to either home equity line (interest only payment option) or variable rate mortgage (hopefully by then it would be prime minus). Keep your options open when it comes to revenue property (short term strategy).
Another great strategy is to lock in your principle residence with fixed-rated (such as 5-year fixed); and choose shorter fixed rate term or variable for investment property. So when you sell your investment property in 2-4 years time, you can avoid or minimize early payout penalties to maximize your profits. Plus, most lenders also allow you to make 10-20% bulk payment towards principle. So it would be a good time to pay down the mortgage of your own residence since the interest is not tax deductible.
GOOD LUCK INVESTING OR BUYING!!
Debt Consolidation
Home Equity
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