This Is The End…Of Low Mortgage Rates?

Jeff Evans

Well…the sky is falling. Rates have gone up with many lenders by about 0.5% over the past week due to increases in the bond market yields. We do still have rates as low as 2.99% at the moment, but I believe its quite possible those will increase at any time.

With these significant increases in mortgage rates, variable rates are now appearing much more attractive again, although with the most recent mortgage regulations, it is now much more difficult to qualify for these mortgages.

As an aside, I recently went car shopping. I spent many hours looking at different possibilities online and their prices, but the interesting thing is there is nothing like going out and trying the cars and finding out what is best for me specifically.

Now, recently there has been a lot of news and questions about rate comparison sites in the mortgage industry. These sites mostly share rates that most lenders or mortgage brokers have available from one given lender. However, you could spend weeks researching for the “best rate”, but for the majority of home buyers, that means nothing because the majority of home buyers will not qualify for that specific lender.

Beyond just mortgage rates, its very important to have someone who can find you a great mortgage and give you personalized advice that fits with your overall financial goals. Mortgage rate sites could be compared to a mortgage vending machine.

I have had many clients who have tried other places and didn’t feel they had hope before they came to me, and I was able to get them a prime rate mortgage. If someone is making their main promotional efforts “This is the best mortgage rate”, I would not feel confident with the service they would provide me.

I do have low rates, and I think it is important, but it is just one component of the overall service I provide and one of several options to make things work for you as a client.

Like me searching for a car, you can spend hours looking at websites for mortgages, but it is never the same as talking to a professional and seeing what the situation is for you specifically. Give me a call or fill out the form on my website and I will get back to you quickly and we can work together for your needs.

Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

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Among the services I provide to my clients, I consider myself to be a "first-time home buyer mortgage broker".  As a first time home buyer mortgage broker, I know how difficult it is to get into the real estate market, particularly in Vancouver, and it brings me a particular amount of job to help someone get past the challenges if being a first time home buyer.

I have recently completed an e-book and will be launching it soon.  I believe it will be very helpful for not just first-time home buyers, but for anyone who is not as knowledgeable in residential mortgage lending, about how to make your home buyer mortgage broker application appealing to a mortgage lender.

As a sneak preview, here are three tips on improving your mortgage application as a first-time home buyer.

3 Home Buyer Mortgage Broker Tips

  1. Take advantage of the home-buyers plan to fund your down-payment.  This program is not technically ONLY for first-time home buyers, but all first-time home buyers are eligible.  Under the plan, you can borrow up to $25,000 from your RRSP for the purchase of an owner-occupied residence.  If you and your spouse are both applying, then you can withdraw $25,000 each. It is a loan, so it has to be paid back over 15 years (or 1/15th of the loan will be added to income for that year).  However, there is no withholding when you withdraw it, it does not have to all be declared as income on any given year, and you don't even have to use all of it for down-payment!  You can use it for any purpose that you need it for. A good mortgage broker, like myself, can help you with some of the finer details and complex situations that often arise from these situations.
  2. Make sure you pay your bills on time. If you have a high balance on your loan, or you have a lot of debt, those also have a significant negative impact on your credit score, but you can get the bills down and there is no record of your high debt levels.  However, when you miss a bill payment, it stays on your credit bureau for 6-7 YEARS.  This not just negatively impacts your credit score, but lenders look at this when assessing risk, and they have been particularly uncompromising and (unreasonable, paranoid, strict...and other words that I cannot put in print) in the last few years.  While you likely do not have to wait 6-7 years to become bankable if you have had gone through a period of bad credit, the less negative credit on the bureau, the better. At least make the minimum required payments and you will go a long way to making yourself appealing to them.
  3. Having no credit is just as bad as having bad credit. Many people feel that not requiring credit should prove your ability to pay your bills and should be good evidence of credit-worthiness.  This is not how mortgage lenders think.  If you currently do not have any credit, then you do not have any documentation that you are an acceptable credit risk, and no matter how strong your income is, you will have difficulty obtaining a prime mortgage approval.  Make sure you have at least 3 different credit facilities in your name.  (Secondary credit cards in a spouses name are not considered acceptable for establishing your credit).

I am excited to launch my home buyer mortgage broker e-book soon, in which I go into much greater detail and give many different ideas to help home buyers prepare for home ownership, but as a mortgage broker in Vancouver, you are welcome to contact me in the meantime to discuss your circumstances and see if there are any options for you.

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This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More