Posted on: 10-02-07 00:22:18
We need to close by mid march and I had an appointment with a lender today. Here is the rate he is giving us for 5 year variable closed.
its prime - .9 which comes to 5.1%, upto 15 % prepayment per year, can double up every month. Penalty for leaving the lender is 3 months interest. I have the option of acc. biweekly and other usual things like assumability and portability. One thing I forgot to ask was what would be my lock in rate in case I want to convert ( they usually say best or something )
Question is is this good ?? Am I missing anything ( are there any strings attached that I should be looking for ). If this is a rip off ??
Your help is appreciated
Thanks
Quote:
Originally posted by vasuroh
We need to close by mid march and I had an appointment with a lender today. Here is the rate he is giving us for 5 year variable closed.
its prime - .9 which comes to 5.1%, upto 15 % prepayment per year, can double up every month. Penalty for leaving the lender is 3 months interest. I have the option of acc. biweekly and other usual things like assumability and portability. One thing I forgot to ask was what would be my lock in rate in case I want to convert ( they usually say best or something )
Question is is this good ?? Am I missing anything ( are there any strings attached that I should be looking for ). If this is a rip off ??
Your help is appreciated
Thanks
If you are taking a variable rate mortgage then you need to ask the bank:
How is the mortgage interest compounded - monthly or semi-annually? Generally a prime -0.85% rate with semi annual compounding would work out better than a prime -0.90 % rate with a monthly compounding interest.
Is there any surcharge on CMHC insurance premium if the mortgage is CMHC insured?
What type of discounted rate you would get should you decide to lock in fixed rate mortgage any time in future?
Variable rate mortgage arranged by us would get you up to prime -0.95%, with semi annual interest compounding, no CMHC surcharge on high ratio mortgage and a written guarantee of the 'best discounted rates' at the time of conversion to a fix term in future.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by Pramod Chopra
Quote:
Originally posted by vasuroh
We need to close by mid march and I had an appointment with a lender today. Here is the rate he is giving us for 5 year variable closed.
its prime - .9 which comes to 5.1%, upto 15 % prepayment per year, can double up every month. Penalty for leaving the lender is 3 months interest. I have the option of acc. biweekly and other usual things like assumability and portability. One thing I forgot to ask was what would be my lock in rate in case I want to convert ( they usually say best or something )
Question is is this good ?? Am I missing anything ( are there any strings attached that I should be looking for ). If this is a rip off ??
Your help is appreciated
Thanks
If you are taking a variable rate mortgage then you need to ask the bank:
How is the mortgage interest compounded - monthly or semi-annually? Generally a prime -0.85% rate with semi annual compounding would work out better than a prime -0.90 % rate with a monthly compounding interest.
Is there any surcharge on CMHC insurance premium if the mortgage is CMHC insured?
What type of discounted rate you would get should you decide to lock in fixed rate mortgage any time in future?
Variable rate mortgage arranged by us would get you up to prime -0.95%, with semi annual interest compounding, no CMHC surcharge on high ratio mortgage and a written guarantee of the 'best discounted rates' at the time of conversion to a fix term in future.
Good Questions and thanks for the response. Yep, I have two quest on my list
- lock in conditions
- compounding period
I don't think i have any CMHC surcharge since its not high ratio.
Apart from that I believe what i am hearing is that rest of the conditions all look OK. Is it ??
Thanks
Quote:
Originally posted by vasuroh
Quote:
Originally posted by Pramod Chopra
Quote:
Originally posted by vasuroh
We need to close by mid march and I had an appointment with a lender today. Here is the rate he is giving us for 5 year variable closed.
its prime - .9 which comes to 5.1%, upto 15 % prepayment per year, can double up every month. Penalty for leaving the lender is 3 months interest. I have the option of acc. biweekly and other usual things like assumability and portability. One thing I forgot to ask was what would be my lock in rate in case I want to convert ( they usually say best or something )
Question is is this good ?? Am I missing anything ( are there any strings attached that I should be looking for ). If this is a rip off ??
Your help is appreciated
Thanks
If you are taking a variable rate mortgage then you need to ask the bank:
How is the mortgage interest compounded - monthly or semi-annually? Generally a prime -0.85% rate with semi annual compounding would work out better than a prime -0.90 % rate with a monthly compounding interest.
Is there any surcharge on CMHC insurance premium if the mortgage is CMHC insured?
What type of discounted rate you would get should you decide to lock in fixed rate mortgage any time in future?
Variable rate mortgage arranged by us would get you up to prime -0.95%, with semi annual interest compounding, no CMHC surcharge on high ratio mortgage and a written guarantee of the 'best discounted rates' at the time of conversion to a fix term in future.
Good Questions and thanks for the response. Yep, I have two quest on my list
- lock in conditions
- compounding period
I don't think i have any CMHC surcharge since its not high ratio.
Apart from that I believe what i am hearing is that rest of the conditions all look OK. Is it ??
Thanks
Do not forget about the rate?
Just for your information:
on a mortgage of $300,000 on a 5 year term at a rate of prime -0.90% the monthly payment based on a monthly compounding rate would turn out to be $ 1771.29 while on based of semi-annual compounding it would be $1761.93 which would make a total saving of over $ 860 over the term of the mortgage.
Similarly a semi annual compounding rate of prime-0.95% would save you over $1650 over 5 years which more than pays the lawyer's cost.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
