Refinancing Your Home
The Benefits and Drawbacks of Early Renewal
The Vancouver Island real estate market continues to enjoy a steady upswing. According to the Vancouver Island Real Estate Board (VIREB) the overall average value for a single-family home within the area has increased to $444,500, an 18% increase from 2016. Apartments and townhomes are also following this trend, showing 24% and 28% increases respectively.
If you are a current homeowner, what can this mean for you? Well, you may be considering taking advantage of this upturn by refinancing your mortgage in order to make your home equity work for you.
What’s your Best Mortgage Rate?
It really depends on what your current situation is and what your mortgage term and rate is to clearly define the benefits and drawbacks of an early renewal. But overall, here are some general pros and cons:
Understanding the Recent Increase in Mortgage Insurance Rates and How to get Money Back
One of the most common questions we encounter here at Oceanvale Mortgage and Finance is “What is your best mortgage rate?” Clients expect a quick and simple answer so that they may compare and rate shop effectively. The problem is, it isn’t that simple. There are a lot of inputs to consider when rate shopping, and nowadays the new regulations are making it more and more difficult to give an answer back with just the one question asked
What is a Cash-Back Mortgage?
Once again, the homebuyers are hit with tightening from the government. This new regulation comes in the form of CMHC increasing the premiums for mortgage insurance. The effect of these premium increases are realized by the borrower as a $5 to $10 increase in a monthly payment. In the big picture of the regulations that have been taking place recently, it is a minor irritant in comparison.
Home Owner Mortgage and Equity Partnership Program
Of all the different types of mortgages available, an often less discussed type is the Cash-Back Mortgage. At Oceanvale Mortgage & Finance, and as a mortgage brokerage serving the community in Nanaimo, we’re eager to help you with whatever product fits your needs.
A cash-back mortgage offers you the flexibility to receive from 1-3% of the total mortgage amount in the form of cheque from the lender. This is a smart product to consider if you need extra cash after the mortgage closes to cover things like closing costs or moving expenses. For example, let’s say you purchase a home for $300,000 with a 5% down payment making your total new mortgage $285,000 but want a little bit of extra money to pay off some debt after your purchase completes. You could receive a cheque from the lender for up to $8,550 in this example and use it for whatever you want!
Purchase Plus Improvement
Before we completely jump the gun here and give the provincial government a standing ovation and run out the door and get ourselves into the Home Owner Mortgage and Equity Partnership Program, let us define what it is and really examine what it means for the consumer. Like all financial decisions in our lives, we should analyze it and how it will affect us. Not only in the short term but also in the long term.
New Home Construction declines sharply in Vancouver
As a first time homebuyer, it can be a real challenge to get the property of your dreams. You may find a perfect location with a less than ideal home occupying it. Or maybe as you meander your way through the home thinking to yourself, “Oh man, this place is fantastic!” you walk into the kitchen which is horrendously outdated and just a disaster. These sorts of things can really complicate the buying process. Especially in a market where those “perfect” homes sell as fast as they go up for sale. That’s where the Purchase Plus Improvement mortgage product can really be a game changer for your buying process. Having access to funds that you can use to customize a home to your liking can really broaden the scope of possibilities for a homebuyer.
The new mortgage and tax regulation adjustments that have been made to the housing market have had the desired effect in both B.C and Ontario, most notably in Vancouver and Toronto.
As a BC resident, and not being far from Vancouver, I can see what the Federal and Provincial government have been so concerned about. Housing prices have been inflating in Vancouver for years making homeownership increasingly difficult for many of us who were born and raised here.
As much as we here at Oceanvale Mortgage and Finance wish we could change the current guidelines for prepayment penalties charged to our clients for an early exit from a mortgage, it looks like we are stuck with them for now.
As most of us know, once you sign a contract it can be tough to get out, as long as it is a legal one, and breaking contracts usually come with steep costs and fees. Recently, the way that lenders protect themselves through penalties for exiting a contract early has become under attack from disgruntled borrowers...