Canada First Mortgage

I’d like to discuss an important issue that has been leering over the shoulders of banks, lenders, and brokers.  All of these parties have a responsibility to perform their due diligence with every valued client.  There is one step that is overlooked by many, but should probably be held in the highest of interests - and that would be placing our clients into a mortgage that will be serviceable in the FUTURE.  Tough?  Yes and no.  You see, really all it takes to do this is an estimation of your balance at the end of the first term, and wager against what the future rates might look like.  What do we know right now?  Rates will go up…of course.  How much - we don’t know exactly.  If we wager a bet that rates will be up 3% - 5% in the next 5 years, it stands to reason that we’re doing our best to limit your risk into entering into a “said” mortgage for today.  We can take your opinion on what your expected salary will look like in 5 years from now (or whatever initial term you’re partial to).  From that perspective, we can harness a ‘likelihood’ of what your future mortgage will look like.  At the very least you’re going in with your eyes open to what may happen to be the biggest investment of your life.  Could we be off in suggesting 3% - 5%?  YES!  Perhaps they’ll be up 6% - 8%.  When we’re providing a looking glass towards the future, nothing is set in stone.  The important factor here is that we want you to go into this investment with both eyes open and strategize in various ways towards different scenarios.

When a bank or broker tells you what you can qualify for on paper as a MAXIMUM mortgage…I highly recommend that you consider letting us play the scenarios - first!  It’s easy to get starry eyed with how much you can afford on paper…today.  If we can protect your risks today, for tomorrows uncertainties…wouldn’t that be worth the time it takes to figure out a scenario or two?  That’s our job

We are seemingly in a market where the threat of rising interest rates are virtually non-existent….for now.  Even though the rates are extremely attractive, it doesn’t take away from the importance of obtaining a pre-approval to hold your rate!  During the rate hold period (which is anywhere from 90 - 120 days depending on the lender), if the lenders interest rate drops, you will automatically get the lower rate.  Should the rates move upward, you are protected by having your rate “held” for you. 

As we near the housing “Spring Market”, another reason to get yourself geared up with a pre-approval is to beat the rush!  It’s a fact that lenders are busier during these upcoming months, and a pre-approval introduces you to them…before you make your move!  That, plus the obvious; I’m sure you would like to know exactly what your purchasing power is…wouldn’t you?

Let me know if you have any questions about your current mortgage position, or if you’re thinking about a future alteration to your mortgage!

Sincerely,

Dan Mass, AMP

Verico Canada First Mortgage

dan@canadafirstmortgage.com