To be sure you have access to the most current, most accurate mortgage rate information in Vancouver, BC, or anywhere else in Canada, you need the expertise of mortgage brokers like those at Averbach Mortgages. Their experienced and dedicated staff offers a full range of services and products for home buyers.
The trick to making a variable rate mortgage work for you is to purchase a variable rate mortgage with an option to convert to fixed rate at some point in the future. When the interest rates cycle down, switching to a fixed rate mortgage ensures you keep your payments low, even after rates begin to rise again. Do you have the expertise to time your decision correctly? Are you confident you'll receive the most competitive fixed rates available and that you are being offered sound financial advice?
Buyers often assume that the big 5 banks will treat them fairly by giving them a better discount because of their long-term relationship with the bank. What they don't know is that the big institutions and credit unions don't have any incentive or obligation to do so.
Many banks have no obligation or requirement to give you their prime market rate when you take out a mortgage loan or convert from a variable rate to a fixed rate loan, contrary to what buyers believe. Nowhere in a lender's standard contract will the consumer find a statement that they will be offered the banks best rate. Rather, when a borrower decides to convert from a variable rate mortgage to a fixed rate mortgage, they are often offered a 'posted' rate or perhaps a rate that is slightly discounted off the posted rate. For this reason, converting your mortgage loan through a bank really could cost you extra money.
Let's consider a typical situation based on a buyer having a $250,000 mortgage with a 25-year amortization. They have a five year variable rate mortgage and decide they want to lock in after one year. How much does the borrower stand to lose? Converting to a fixed rate mortgage after one year, at .25 percent higher than the best market rate equals $625 per year in additional interest costs. Over four years the buyer will be paying an extra $2500 in interest. Even more astonishing is the fact that over the remaining 25 years that amount adds up to $15,625.
Mike Averbach says, 'Buyers assume incorrectly that their big bank will treat them fairly or give them a good discount because they are long-term customers.' What buyers don't understand is that the big institutions and credit unions have NO incentive or obligation to give you, their customer, their best rate. In fact, because they need new business, they have more incentive to treat new clients better than existing ones. You are at their mercy if you refinance through them and they know it!
Mike Averbach, Accredited Mortgage Professional, makes sure the client understands the fine print and ensures that the mortgage is truly in their best interest. Unless otherwise requested, Averbach always puts their clients in a variable rate mortgage that offers the best available fixed rate at conversion. When Mike is on your side, it's won't be a matter of IF you will lock in, but WHEN.
How do you prevent paying a higher interest rate when you convert from a fixed rate mortgage? Mike Averbach advises, 'Do your research either before entering a mortgage agreement, or when renewing your mortgage.' Make sure your agreement has the crucial clause in the contract stating the 'Client will receive the best rate upon conversion to a fixed-rate mortgage.'
Many mortgage brokers work with lenders (like ING, First National, MCAP and Merix) who are willing to make a commitment in writing they will offer their clients their best rate whenever they choose to lock into a fixed rate mortgage. Even knowing this, some brokers still offer variable mortgages from the big banks purely because of brand recognition.
Mike Averbach, Accredited Mortgage Professional at Averbach Mortgages, can be contacted via email at mike@averbachmortgages.com or by phone at 604-710-2550. Averbach Mortgages' Mortgage Manager, Justin Blacklock, can be reached via email: justin@averbachmortgages.com or at 604-707-6339. Justin, Mike and the entire Averbach Mortgages Team will explain the fine print in mortgage loan documents. They will help you chose a mortgage that truly reflects your situation and respects your best interest.
About the Author:
Averbach Mortgages has proudly been serving businesses and families across Canada since 2004. Customer service is the founding pillar of the Averbach brand, our organization's success has been built entirely on referral based business.
No comments:
Post a Comment