Home Owners

[ROONEY2.3]

Hey guys...how's everyone?  Haven't posted in a while...just looking for advice from home owners here.
Basically, we're about 5 months away from renewing our mortgage.  I know it's still quite a way but we're open to market around now.  My question is should we stay with the credit unions and banks or should we consider going for mortgage brokers.  We've heard that they can offer even better rates than the banks?  Anyone here renewed recently?  Any advice, help, or opinions is greatly appreciated.  thanks guys

[zoomerboomer]

Some authorized brokers can in fact get you better rates with the chartered banks than the banks themselves are offering.

[puco]

From my experience, it's an advantage to go through a broker as they have access to all the lenders. The broker can have the lenders sort of fight for your business instead of you shopping banks for the best rates yourself.   A broker will not cost you anything anyway since they make $ from the lender they sign you up with.  Also, if you shop banks yourself it may go against your credit rating as you go from 1 bank to the next; they'll see that you have applied for a loan somwhere else even though it was just the other banks checking your credit. 

[missmiel]

Rooney, I'm going to send you a PM on this.

[tonyzoomzoom]

are you going w a fixed or floating mortgage?

[Heavenclosed]

Last time I went with a broker and got a killer deal.   They shop around for the best deal.  This time I dealt directly with a bank and got an even better deal less than 3%!

If you are not sure go with a recommended broker.  Mine worked in Canada Place. 

[ROONEY2.3]

Thanks for the replies u guys.
Mr T: don't quite know where to go for yet. Our current one is a 5yr fixed @ 5.2% (ouch!)
I know rates have gone down since but this time around i really want to do my homework to get the most savings we can get.
But it looks like we might be going for a broker this time around.
Just don't know which broker yet.

[purplexity]

Shopping around does put inquiries on your credit profile.  Usually it is a good idea to go to your bank that you have been with for years and they can do a soft credit pull that does not count as an inquire on your profile and give you an idea of what they have to offer.  So it really depends on situation and credit how good of a rate you can get. Mines from TD and I give them all my business from insurance on my place and all my investments so I get a super awesome rate.   

I don't mind sharing

My Heloc is

The revolving portion is prime +1%
The fixed portion is 2.9% for 2 years.

The fixed portion is whats left owing and the revolving is what ive paid down but I can use for whatever else I want.

Most Helocs need 20% down as well.

I use the revolving portion as capital for my investments on the stock market(day trading) and it really helps when your money is working for you.  I make around after trading fees and paying the interest for what I'm using average of 4% so the heloc was an awesome option for me wanting to use most of the equity for investing and it just makes sense to make your money work for you.

[aaronlee]

You might also be able to renew/refinance a couple months early without paying a penalty. So check with your current lenders policies, you could save the difference in rate for those months.

[purplexity]

You might also be able to renew/refinance a couple months early without paying a penalty. So check with your current lenders policies, you could save the difference in rate for those months.

Even if there is a penalty it still might save you money renewing it early.

[Heavenclosed]

My mortgage was due in January 2012.  I renewed early in October.  There was a small penalty, but it was worth it to get the great rate i got. 

[ROONEY2.3]

Thanks for the input guys. We,re still about 5 months away and our bank caculated about $3000 penalty if we were to renew now. They were offering us 3.49% on a fix 5yr. The down side is the penalty cannot be added on the mortgage.  I'm not worried about about having inquiries on my credit. I'm owned 2 credit cards in the last 15 yrs of my life from which i've always paid full the next day after using it.
Bottom line for us is the most savings we can get.  3.49% isn't bad, but i'm sure there are better rates and options out there.

[serpico007]

I heard that if you switch banks, some will pay the penalty for you. Coast Capital was doing this recently.

[oracle]

Thanks for the input guys. We,re still about 5 months away and our bank caculated about $3000 penalty if we were to renew now. They were offering us 3.49% on a fix 5yr. The down side is the penalty cannot be added on the mortgage.  I'm not worried about about having inquiries on my credit. I'm owned 2 credit cards in the last 15 yrs of my life from which i've always paid full the next day after using it.
Bottom line for us is the most savings we can get.  3.49% isn't bad, but i'm sure there are better rates and options out there.

go variable. you always win on a variable. and go see a broker.

[puco]

Thanks for the input guys. We,re still about 5 months away and our bank caculated about $3000 penalty if we were to renew now. They were offering us 3.49% on a fix 5yr. The down side is the penalty cannot be added on the mortgage.  I'm not worried about about having inquiries on my credit. I'm owned 2 credit cards in the last 15 yrs of my life from which i've always paid full the next day after using it.
Bottom line for us is the most savings we can get.  3.49% isn't bad, but i'm sure there are better rates and options out there.

go variable. you always win on a variable. and go see a broker.

Variable is a win in today's economy which seems to keep interest rates going down, but for how long can it stay that way before the interest rates go back up?

[purplexity]

Thanks for the input guys. We,re still about 5 months away and our bank caculated about $3000 penalty if we were to renew now. They were offering us 3.49% on a fix 5yr. The down side is the penalty cannot be added on the mortgage.  I'm not worried about about having inquiries on my credit. I'm owned 2 credit cards in the last 15 yrs of my life from which i've always paid full the next day after using it.
Bottom line for us is the most savings we can get.  3.49% isn't bad, but i'm sure there are better rates and options out there.

a $3000 penalty VS how much interest you can save by doing it early.

3.49 fixed on a 5 year is pretty good.

Also even if you have 750+ credit rating.  You don't want more then 2 inquires a year on your bureau otherwise it makes you look credit hungry and will effect an underwriters decision and lower your credit score.

Keeping balances on your credit card more then 30% of its limit also lowers your score amongst the obvious other things.  

[purplexity]

I heard that if you switch banks, some will pay the penalty for you. Coast Capital was doing this recently.

Coast Capital isn't a bank.  It's a credit union and operates a bit differently.
They are non profit
Credit unions lack the power a bank has.

Plenty more but i won't get that far into it.

[ROONEY2.3]

Yea this is what I'm curious about cuz most banks and even some brokers tells us to go with fix as opposed to variable? Hmmm?  They're excuse is that the rates these days are very low and that variable there is no guarantee?  Seriously?  
Yeah 3.49% is not bad at all.  But then again we have been offered lower rates.  It's just a matter of going fix or variable, and who can offer us the best option.  Yes, I've heard about the penalties being waived by switching, that is a good options. So far none has offered it to us.  Also we've heard that there is a variable in which you could put a "cap" on it?  Say the interest rate goes up, you can lock it in?  Is there such thing?
All I can say is that we're not going back with our bank.  We are definitely switching.  They won't even add the penalty to the mortgage if we renew.  We're pretty chocked about that.

[Heavenclosed]

You can get a variable with a cap.  I had that once when rates were higher.

[aaronlee]

Most banks will let you "lock in" your variable mtg into a fixed. However it's not locking into your current rate, it's basically converting your mtg into the fixed rates with similar term at the time.