Mortgage Broker - Saving Money Through Variable Rate Mortgages and Refinancing Strategies

It is all too common for Canadians to miss out on mortgage-related savings, whether in larger centers such as Calgary and Edmonton or smaller centers across the nation.



In fairness, most of us are simply unaware of the options and strategies that represent money saving opportunities. But with the help of a good mortgage broker, it can be easy for any homeowner to benefit from options such as variable rate mortgages and mortgage refinancing.



Variable Rate Mortgages Overview



Variable rate mortgages generally offer the lowest available rates in Canada, and a good mortgage broker will have the know-how and connections to negotiate the best rate in the nation on your behalf.



Since the variable rate mortgage adjusts as the prime rate rises and falls, your payments will adjust each month as interest rates change.



While variable rate mortgages represent the inherent risk of your payments potentially increasing, the key is to remember that:





from the start, your payments will be among the lowest available, and,

your payments could also decrease if the prime rate drops.



And should you later wish to lock in your mortgage, you can do so without penalty to any fixed rate mortgage that is equal to or greater than the remaining term on your mortgage.



There are many variable rate products available, and an experienced mortgage broker can help you decide which product may be best suited to you.



When Do You Refinance Your Mortgage?



It is not uncommon to discover that refinancing your mortgage could save you thousands of dollars.



But how do you know if the conditions are right for such savings? If the annual interest rate on your Canadian mortgage is more than 0.5% higher than the current 5-year fixed rate offered by your local mortgage broker, then it's time to consider refinancing.



Some people choose not to refinance due to the penalty and lawyers fee associated with exiting their current mortgage. But while there are upfront costs associated with refinancing, in some cases these expenses can be offset in as little as 18 months through reduced monthly payments.



And in light of the long-term savings that accumulate over the entire life of your mortgage, refinancing can prove to be a financial decision you'll thank yourself for again and again.



Here's to you saving money.

Are You Ready for a Home Mortgage Loan?

Buying a Home and committing to a Mortgage can be very scary!
A home mortgage loan is the largest debt that most Americans will take on in their lifetime. As such, making the decision to take out a mortgage is not one that most first time homebuyers take lightly. Not only will your monthly mortgage payments probably be the largest bill that you face each month, but the total amount of debt realized with a home mortgage loan can have a staggering, and sobering effect on the first time home buyer.



I can remember the months leading up to my decision to fill out a mortgage application. I had nightmares about loosing my job, not being able to keep up with my payments and finding myself homeless. And those were on the good nights when I was able to sleep at all!

Committing to a Home Mortgage Doesn't Have To Cost You Your Sleep
Get the Best Rate on Your Home Mortgage Loan

Home mortgage interest rates hit record lows in 2004 and have remained at record lows as we go through 2005.



It is possible today to get a thirty-year fixed rate home mortgage loan for under five percent, and an adjustable rate mortgage can be found for under four percent if you look hard enough!

However, record low mortgage rates do not mean that you should take the first mortgage offer made to you, even if it sounds low. On the contrary, it means that shopping around for the best mortgage possible may be even more beneficial then during a high market period.



If you solicit mortgage rate quotes from enough lenders and pay attention to economic news, you might be able to secure a home mortgage loan at an interest rate that you will not see offered again in your lifetime.

Solicit Several Mortgage Rate Quotes

In order to get the best deal on anything in America, it is important to shop around. Securing a home mortgage loan is no exception to the rule. If you are the type of consumer who likes to walk into the first store that you see and buy what you need without comparing your options, then you might also be inclined to accept the first home mortgage loan offered to you
.



Doing so would be a big mistake. In order to get the best possible home mortgage loan you will need to "shop" and compare lenders.
Having a substantial down payment on the home that you wish to purchase and applying for a smaller home mortgage loan is another way to increase your chances of getting mortgage approval. Again, this goes back to the risk involved to the lender for financing your loan.

Many mortgage lenders will require that you have a 20% down payment on the home, and then they will grant mortgage loan approval for the remaining 80% of the purchase cost.



This helps to offset the lender risk. In the event that you are unable to keep up with monthly mortgage payments and you default on the loan, the lender will have a better chance of recovering his money through foreclosing on and selling the home if the loan is a smaller percentage of the market value of the home.

Therefore, if you can save 30% or more towards a down payment on your home, you will be lowering the risk to the lender and increasing your chances of getting mortgage approval.



You May Have To Accept a Higher Interest Rate on Your Mortgage Loan
If you wish to secure a mortgage despite your bad credit history, and you do not have a sizeable down payment saved up, you may have to agree to a mortgage at a higher interest rate than that which is being offered to low risk borrowers. This is because the lender will want to be compensated for his increased risk level.
This should not necessarily prevent you from taking the loan, though.



If you secure the mortgage and are diligent about making timely payments, after paying on it for awhile you will improve your credit history. Then you can refinance the mortgage at a later date with a better rate offer.

Michael Contaro

http://www.atozonline.com

For more articles by Michael Contaro, you can go to http://www.atozonline.com

Mortgage Loans

A mortgage is a device used to create a lien on real estate by contract. The mortgage is an instrument that the borrower (called the mortgagor) uses to pledge real property to the lender (called the mortgagee) as security for a debt, also called hypothecation. The mortgage, as a rule, consists of the promissory note and the pledge. For example, when somebody wants to buy a house to live in it with his family, but does not have enough money at the moment.



Thus that person needs to take a credit. But nobody will give this person such a large sum of money, without having trustworthy and firm guarantees. But what kind of guarantee can meet these criteria? Of course it is not a word of honour or just a promissory note. But the house, which a person wants to buy, will probably be the best guarantee for the creditors.

Consequently, the person, who needs a credit, writes a promissory note, which serves as the evidence of the debt and the promise to repay money with a certain interest rate, and formalizes a lien.



This lien must be registered in the public records. After the repayment of the debt within a certain period of time, creditor returns the promissory note to the debtor and the lien becomes annulled. In the case when the debtor can not fulfill his engagements, the pledge (the house in our example) will be sold by the auction and the proceeds pass into the hands of the creditor.

Sometimes there occur such conditions, when a creditor needs money with expedition and the credit's maturity date is too late.



In that case the creditor can resell the lien to other holder, which will receive the interest rate and the credit. This kind of financing is very popular in the United States of America and there exists two governmental organizations - Home Owners Loan Corporation and Federal Housing Administration, which provide mortgage loans with very law interest rates and of course there are plenty of private loan companies, mortgage companies, credit unions etc.
There are many types of mortgage loans exist: adjustable rate mortgage, fixed rate mortgage, capped rate mortgage, discounted rate mortgage, reverse mortgage and other.



Adjustable rate mortgage is characterized by the changing interest rate. Thus "the borrower benefits if the interest rate falls and loses out if interest rates rise".

Fixed rate mortgage is characterized by the constant interest rate and, in turn, constant monthly payments.

Capped rate mortgage is the mortgage when the borrower pays the accrued interest with a constant rate, but if the actual rate falls below the capped rate, then the borrower pays on the lower rate.



Discounted rate mortgage is a mortgage when the borrower repays the loan with the discounted interest rate for a certain period of time.

Reverse mortgage is a kind of loan, when old people want to receive money while living in their homes. When the borrower dies his property is sold and the credit is repaid from the proceeds.

In order to obtain a mortgage a person should fill a loan application and prepare all the required by the lender documents (see below), and then deliver them to the lender.



Within three days the lender has to return the disclosures, required by the law - Good Faith Estimate and Truth in Lending, to the borrower.

Commonly, lenders demand for the following documents to be presented by the borrowers: - verification of income; - verification of assets; - information about the purchase; - information about the debts; - some kinds of additional personal information. Verification of income includes the following: earning statements for the two past years; profit and losses from the self-employment (if applicable) for the past three years; additional income (if applicable) such as interest or social security.



Verification of assets includes the following: list of bank accounts numbers, list of saving bonds and some other. Information about the purchase - anything that may be considered important from the point of view of the lender - copies of the purchase agreement and the sale agreement, because he is concerned a lot if the borrower is not a swindler. Information about the debts is important because in the case of borrower's bankruptcy there can occur the line of his creditors each of which has a legal priority to receive debts.



This information might contain the following: credit card bills, consumer debt bills, information about alimonies (if applicable) and some other. Lenders usually interested in the origin of the future down payments (will the borrower pay them from the salary or interest from some equity etc). Additional personal information can include divorce decree or explanation letters about any credit problems. Of course, the list of the required documents may very different from one lender to another and it will be wisely to make them more precise by the means of communications beforehand.



But borrowers should take into consideration that fact that different types of mortgage imply specific requirements (for example, reverse mortgage requires the borrower to be at least sixty-two years old). I also want to mention that there is a kind of mortgage when no or very little documents are required to be presented except for income and losses, but it can be given only to self-employed borrowers.

When the lender processes and analyses the information about the borrower, he determines the size of the loan, which he can give to the borrower.



This size depends on the borrower's ability to repay the debt. When the borrower knows the amount of the possible loan he or she can negotiate the terms of the mortgage and its type (main types of the mortgage were described above). Then it comes time to open escrow, provide title report, credit report and the appraisal of the property - in other words, to form mortgage package and send it to the lender, which would finally determine to give a loan to the borrower or not.



If the loan is approved by the lender, it is time to sign all the documents (with the signing agent of course) and deliver them to the lender. The lender reviews the document once more and funds the loan, then all necessary records are made and the loan closes.

Mortgage loan implies different additional fees for the borrower (or the lender, which is very seldom, but it depends on the prior negotiations) among of which there may be the following: discount fee (this fee usually reduces interest on the pro rata basis), loan origination fee (it is the compensation for the lender because of his operation costs for organizing the mortgage), application fee (it is usually paid when the borrower competes the application form for the debt), appraisal fee (this fee increases directly on the pro rata basis with the price of the house; it is paid for the independent appraisal of the house, which lender wants to know in order to assess how much money he can lend you; "Factors to be considered in determining market value of the property are: present cash value; use; location; replacement value of improvements; condition; income from property; net proceeds if the property is sold, etc"; moreover, lenders usually suggest a mortgage which not exceeds ninety five percent of the assessed property), credit report fee (this fee is paid for the independent assessment of the borrower's solvency), title search and insurance fee (these costs are related to the investigation of the property's history), flood certification costs (related to the investigation if the property is not situated in the flood zone and if it is so than it implies flood insurance costs), survey fee, paperwork fee, costs of attorneys, real property taxes (regulated by the state law), escrow account costs (lenders often require borrower to create such account as a guarantee that the borrower pays insurance fees and taxes on the real estate in time, in order not to lose his pledge; usually governmental loan companies require an escrow account, private companies may not require it) and some others depending on the situation.



In this part there also must be mentioned, that most lenders require an immediate down payment at the certain rate of the purchase price (different lenders require different down payments - from three up to thirty percent; low down payment percentage are stipulated by the private mortgage insurance).

During the process of obtaining the mortgage loan there are also needed signing agent's services. This need is stipulated by the following circumstances: both the lender and the borrower need to ascertain that they have a deal with the right people, they want to ascertain that the documents are accurate enough, that all the necessary procedures are performed in the appropriate way, that all the essential signatures and dates are made in the appropriate way and that all the documents notarized correspondingly.



But as it was already stated above, the loan signing agent must not give any legal advice or comments.

Aaron is a senior writer at Custom Essay Writing Network. He is an experienced custom essay writer and will be glad to share his experience of custom essay writing with you.

Get the Best Rate on Your Home Mortgage Loan

Home mortgage interest rates hit record lows in 2004 and have remained at record lows as we go through 2005. It is possible today to get a thirty-year fixed rate home mortgage loan for under five percent, and an adjustable rate mortgage can be found for under four percent if you look hard enough!

However, record low mortgage rates do not mean that you should take the first mortgage offer made to you, even if it sounds low.



On the contrary, it means that shopping around for the best mortgage possible may be even more beneficial then during a high market period.

If you solicit mortgage rate quotes from enough lenders and pay attention to economic news, you might be able to secure a home mortgage loan at an interest rate that you will not see offered again in your lifetime.

Solicit Several Mortgage Rate Quotes

In order to get the best deal on anything in America, it is important to shop around.



Securing a home mortgage loan or a and 2nd mortgage is no exception to the rule. If you are the type of consumer who likes to walk into the first store that you see and buy what you need without comparing your options, then you might also be inclined to accept the first home mortgage loan offered to you.

Doing so would be a big mistake. Unless you have a long term established relationship with a lender who considers you one of his best customers and is willing to loan money to you at the prime interest rate, then in order to get the best possible home mortgage loan you will need to "shop" and compare lenders.



Because the home mortgage rate is so volatile right now, it often changes during the course of one business day. Therefore, it is best to solicit all of your mortgage rate quotes on the same day. Compare offers from various lenders, and request a rate lock from the lender offering the best choice.

Why the Home Mortgage Interest Rate Matters So Much

The interest rate that you secure your home mortgage loan at will have a big impact on the total amount that you end up paying for your home by the time the loan is paid in full.



To illustrate this, let's say that you buy a home for $150,000 using a 30 year fixed mortgage with a 6 percent interest rate. By the time the home mortgage is paid in full it will have ended up costing you almost three times the original cost of the home. Using the same home and the same 30 year fixed mortgage, but lowering the interest rate by only one percentage point, down to a 5 percent interest rate, will save you approximately $100,000 over the life of the home mortgage loan.



Clearly, getting the best possible interest rate on your home mortgage loan is one of the most important economic decisions you will face. Since mortgage rates are at an all time loan, now is a great time to gather some home mortgage rate quotes!

Copyright 2005 Tracy Price

Tracy Price is a staff writer at http://www.2nd-mortgage-tips.com
Providing free educational information on mortgages, 2nd mortgages, home refinancing, etc.



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Home Mortgages: Does a No-Closing-Cost Loan Make Sense for You?

I have heard a number of radio ads and have seen many newspaper ads offering "no closing cost" home mortgages. These ads will tell you that you can get a new mortgage or refinance your existing mortgage at absolutely with absolutely no closing costs.. There are no points, no charges for an appraisal, no charge for title insurance, no costs, period.

On the face of it, this sounds like a great deal and no-cost mortgages are especially popular with people who are refinancing an existing mortgage.



How does this work? Normally, a 30-year, fixed-rate mortgage, would have closing costs in the neighborhood of $2,000 to $3,000 or even more, depending on whether or not you pay points upfront. In fact, we talked to one mortgage broker two weeks ago about a mortgage on an investment property we own in another state and the closing costs were quoted as $7,000 - outrageous but at least not typical.

You've probably heard the old adage, "there is no such thing as a free lunch," and these no-cost mortgages are yet another testimonial to the truth of this.



The way that no closing cost mortgages work is the lender gives the mortgage broker a rebate at closing which the broker then uses to to pay the settlement costs. The way the lender gets its money back is by charging a higher interest rate. For example, for a $230,000, 30-year fixed rate mortgage with no upfront fees, your interest rate would most likely be a least 0.35% higher that if you paid one point and the customary closing costs.

Here's an example of what this means.



As of this writing, there were mortgages available at 5.250 %, plus one point. As you probably know, one point equals one percent of the mortgage so one point on a $150,000 mortgage would be $1,500.

The monthly payment fo this loan, excluding taxes and insurance is $826.00. The closing costs would be $1,500 plus the normal settlement costs of, say, $1,500,A for a total of $3,000.

Let's compare this with a no-cost mortgage. Assuming the interest rate is 0.



35% higher as quoted earlier, the interest rate on a 30-year, fixed-rate mortgage would be 5.725%, yielding a monthly payment of $872.98 or about $46.00 per month vs. the loan where you would pay one point and the normal settlement costs.

Given a savings of $46.00 per month, it would take you about 65 months - or 5.5 years to make up for the $3,000 you paid in closing costs. This means that you need to determine how long you will stay in that house before deciding on a mortgage loan or a refi.



If you intend to stay in that home and not refinance your mortgage for more than six years, it might make sense for you to pay the point and the normal settlement costs. On the other hand, if you believe you will sell that house or refinance it in less than five years, a no-cost mortgage might be better.

Just make sure you look at all the various alternatives and their long-term costs before you leap into a new mortgage.

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What is a Fixed Rate Mortgage?

As the term implies, with a fixed rate mortgage the mortgage rate is fixed for a set period of time, so no matter what movements occur in the lender's standard variable mortgage rate, the borrower's arrangement is fixed and, therefore, so are the monthly fixed rate mortgage payments.

A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by the name, is a mortgage where equal repayments are made every month.



Fixed rate mortgages allow you to easily manage and plan your monthly expenditure - because the payment will be the same every month and you won't be affected by any rises in the base rate. If the interest rates rise above the fixed rate on your mortgage, you will see the real benefits of the fixed rate mortgage.

A fixed rate mortgage makes it easy to plan ahead, because as the name suggests, the interest rate on your mortgage stays fixed.



This means that as a fixed rate mortgage customer, even if the Bank of England Base Rate changes, the interest rate on your mortgage remains constant over a fixed period of time. This makes your budgeting easier, because you can plan ahead knowing exactly how much your monthly repayments will be.

The fixed rate period can be anything between six months and five years, but it's always best to refer to a financial services professional before deciding what period of fixed interest rate to choose.



The biggest advantage of a fixed rate is that irrespective of fluctuations in interest rates, your monthly repayments remain the same throughout the period of the fixed rate - usually six months to five years.

A fixed rate mortgage is suitable if your mortgage repayments take up a large proportion of your income as it protects you from rises in interest rates. However, you would not benefit from any reduction in the lenders standard variable rate.

Fixed rate mortgages generally incur a penalty if redeemed within the fixed rate period.



The advantage of a fixed rate mortgage is that you know exactly how much your mortgage will cost, and for how long. If interest rates on your mortgage rise, well the fixed rate will not. Conversely, however, when mortgage rates drop, your fixed rate mortgage will not drop with them.

The key benefit of a fixed rate mortgage is that you are able to accurately budget your repayments for a set period of time.



In addition, fixed rate mortgages are an excellent option, if it becomes apparent that interest rates may be rising over the coming years, as you can protect your mortgage repayments against rises by choosing a fixed rate mortgage.

You may freely reprint this article provided the author's biography remains intact:

Houston Mortgage Rates

A mortgage rates vary depending on the type and duration of the loan. There are three types of mortgage rates: 1. Mortgage Adjustable Rate 2. Fixed interest rate 3. Rate mortgages to variable rate interest rate variable takes into account that interest rates may change (usually in response to changes in the rate of Treasury bills or the prime rate. The purpose of the adjustment interest is primarily to increase the interest rate on the mortgage in line with market rates. The mortgage holder is protected by a maximum interest rate (called a ceiling) that can be reset each year. ARM (Adjustable Mortgage Rates) usually start with better loan rates fixed mortgage rates to compensate the borrower for the additional risk that fluctuations in interest rates will be the mortgage rate the Future create.A has a fixed interest rate will not change, and a variable interest rate rises and falls according to changes in interest rates underlying index.There are many mortgage companies in Houston prepared to submit a report calculator mortgage rates. These companies offer financing that is getting a new mortgage on a property already owned - often to replace existing loans on the property. When mortgage interest rates are low, c 'is the right time to refinance. refinancing can save money on their monthly mortgage payments. These companies also offer block rates, or rate lock option that gives the borrower a commitment to a mortgage certain interest rate, including not only interest rates but also offer his / Mortgage origination points.Houston provides detailed information on Houston mortgages, mortgage companies, Houston, Houston, mortgage brokers, mortgage lenders Houston and more. Houston Mortgages is the sister site Atlanta mortgage interest only.