Below and throughout this special report, CAAMP members share their best advice on buying a home, getting the right mortgage for you, and paying your mortgage off faster.
The Canadian Association of Accredited Mortgage Professionals (CAAMP) is Canada's mortgage broker channel association and the leading provider of value, service, education and advocacy for mortgage professionals.
“Financing a home should involve a long-term plan based on the life of the mortgage. Approximately 20 per cent of Canadian homeowners will be faced with a mortgage renewal in 2016. For too many, that involves checking a box on their renewal form and mailing it back to their lender, which I consider to be a huge mistake.
Every renewal is a rare opportunity. When you sit down with an experienced mortgage professional, he or she will evaluate and detail your entire financial situation to design a mortgage strategy that meets your unique requirements.
Most homeowners will have just five renewals during the life of their mortgage, and each one involves a financial decision that can add or subtract thousands of dollars from your family’s nest egg. It’s worth investing a bit of time in the process.”
Bud Jorgenson
has been a leading mortgage broker in the Saskatoon region for more than 12 years. He is the managing partner of TMG The Mortgage Group Prairies.
“For several years, headlines have warned of ‘inevitable’ interest-rate hikes, even while rates continued to fall to new record lows. What might these eventual increases mean to you personally?
Very rarely does the variable rate move by more than 0.25 per cent, which translates into a monthly payment increase of $13 per $100,000 of mortgage.
If you’re in a fixed mortgage, interest rate changes won’t affect you until your renewal date, so you’ll have time to prepare. While that means your rate increase may be higher, it’s important to remember that your mortgage principal will be lower. For example, a $300,000 mortgage (30-year amortization; 2.59 per cent) will have an ending balance of $264,613 five years from now. Renewing $264,613 at an interest rate one per cent higher increases your payment from $1,197.27 to $1,333.74.
If you have a variable rate mortgage, or your fixed mortgage allows, consider increasing your payment by at least this amount today to build equity faster and lessen any future interest rate-driven payment increases.”
Angela Calla
is host of “The Mortgage Show” on CKNW Radio and has been named one of the Top 50 Mortgage Brokers in Canada in each of the past five years.
“Getting a low rate is the easiest part of buying a home today. However, choosing the correct mortgage product and lender has never been more crucial as many people sell or refinance prior to maturity, which can trigger thousands of dollars in easily avoidable penalties.
We work for decades to pay off our homes – it’s a shame to have our hard-earned equity clawed back by the wrong mortgage product. Don’t make the mistake of not getting a second opinion.
The mortgage industry is extremely competitive, and while people should speak to their banks, they should also talk to an experienced mortgage broker for comparison. More often than not, they will be able to find significant savings.”
Mark Norman
has worked in consumer credit since 1995 and has more than a decade of experience as one of Newfoundland’s top mortgage brokers.
“First and foremost, my advice to clients is always to live within their means. Every person’s comfort level with debt is different.
As a professional, it’s my responsibility to ensure clients make educated decisions. Especially for first-time homebuyers, it’s important to understand that we’ve been living in an environment of very low interest rates for a number of years. It’s highly likely they are going to have to renew their mortgage at a higher, more normalized interest rate at some point.
To prevent what I call ‘payment shock,’ I encourage them to apply a number of strategies that can help them pay their debt down faster, and to look at their home as an overall investment in their financial plan.
Our responsibility is to educate our clients about the honeymoon we’ve been living in, and the potential for rate increases in the future. Advice is more important now than ever.”
Chad Wilson
is consistently ranked as one of Manitoba’s five leading mortgage brokers and serves homebuyers and homeowners throughout the province.
This content was produced by Randall Anthony Communications, in partnership with The Globe and Mail's advertising department. The Globe's editorial department was not involved in its creation.