Merix Financial's 50/50 Wise Mortgage

There's a new mortgage product on the market.

Merix Financial has launched a new mortgage product in Canada called the 50/50 “Wise” Mortgage, which enables borrowers to lock in half of their mortgage at a five-year fixed rate and the remaining half at a five-year variable rate. This is an excellent way to diversify your mortgage debt the same way you would diversify your investments such as your RSP. It's an excellent way to get the best of both a variable rate and a fixed rate mortgage.

The product is suited to a variety of borrowers including:

• Clients who would normally go fully variable but are afraid prime rate is at its bottom.
• Those who aren’t comfortable being locked into a fully fixed rate.
• Clients who can’t decide between a fixed or variable mortgage.

Each portion of Merix’s 50/50 Mortgage operates independently – like two separate mortgages – yet the product is registered as only one charge.

Benefits include:

• 20% annual lump-sum pre-payment privileges
• 20% annual payment increase ability
• Portability
• The option to lock in the variable-rate portion at any time
• A 120-day rate hold on purchases (60 days on refinances)
• Up to a 35-year amortization (the minimum is 20 years)

No switches or transfers are permitted and there are no pre-approvals. Other conditions apply as well so be sure to call.

Brent Irving
Mortgage Expert

Your friend in the mortgage business
Tel: 604-764-6336
Fax: 604-541-6323
Toll Free: 1-888-665-1344
Email: birving@dominionlending.ca

Web: www.BrentIrving.ca

Web: MyMortgageBC.com

Tips To Keep In Mind Between Mortgage Approval and Mortgage Funding

In light of the current market and tightening of credit underwriting standards by both lenders and mortgage default insurers as of late, keep in mind that now – more than ever – it’s important to be careful what you do between the time your mortgage is approved and when it funds. A few mortgage lenders and insurers have been doing something lately that they have not done in a long time, and that is pull new credit bureaus prior to funding, especially if there is a long period between the time of your approval and when the mortgage actually funds.

Following are eight tips to keep in mind between your mortgage approval and funding dates:

1. Don’t buy a new car or trade-up to a more expensive lease.
2. Don’t quit your job or change jobs. Even if it’s a better-paying job, you still are likely to be on a probationary period. If in doubt, give me a call and I can let you know if this may jeopardize your approval.
3. Don’t change industries, decide to become self-employed or accept a contract position even if it is within the same industry. Delay the start of your new job, self-employment or contract status until after the funding date of your mortgage.
4. Don’t transfer large sums of money around between bank accounts. Lenders get especially skittish about this one because it looks like you’re borrowing money. Be ready to document cash transactions or money movements.
5. Don’t forget to pay your bills, even ones that you are disputing. This can be a real deal-breaker. If the lender pulls your credit bureau prior to closing and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they will fund. You don’t want to have to scramble to pay off a debt at the last minute!
6. Don’t open new credit cards. Again, just wait until after your funding date.
7. Don’t accept a cash gift without properly documenting with me – even if this is from proceeds of a wedding. If you have a bunch of cash to deposit before your funding date, give me a call before you deposit it.
8. Don’t buy furniture on the “Do not pay for XX years plan” until after funding. Even though you don’t have to pay now, it will still be reported on your credit bureau, and will become an issue – especially if your approval was tight to begin with.

While you may not risk losing your mortgage approval because you have broken one of these rules, it’s always best to talk to me before doing any of the above just to make sure!

Brent Irving
Mortgage Expert

Your friend in the mortgage business
Tel: 604-764-6336
Fax: 604-541-6323
Toll Free: 1-888-665-1344
Email: birving@dominionlending.ca
Web: www.BrentIrving.ca

Web: MyMortgageBC.com

What is an Interest Rate Differential Penalty or IRD

With interest rates at all time lows many homeowners are wondering if it may be a good idea to refinance their mortgage and are surprised at the size of the penalty they have to pay. These large penalties charged by your bank are because of mortgage penalty calculation call IRD. Most mortgage lenders charge a penalty which is either 3 months interest or an Interest Rate Differential whichever is greater.

What Does Interest Rate Differential - IRD Mean?
A differential measuring the gap in interest rates between two similar interest-bearing assets. Traders in the foreign exchange market use interest rate differentials (IRD) when pricing forward exchange rates. Based on the interest rate parity, a trader can create an expectation of the future exchange rate between two currencies and set the premium (or discount) on the current market exchange rate futures contracts.

Investopedia explains Interest Rate Differential - IRD
The IRD is a key component of the carry trade. For example, say an investor borrows US$1,000 and converts the funds into British pounds, allowing the investor to purchase a British bond. If the purchased bond yields 7% while the equivalent U.S. bond yields 3%, then the IRD equals 4% (7-3%). The IRD is the amount the investor can expect to profit using a carry trade. This profit is ensured only if the exchange rate between dollars and pounds remains constant.

WHAT DOES THIS MEAN FOR ME AND MY MORTGAGE?

This usually means the difference between the interest rate on your mortgage contract compared to the rate at which the lending institution can re-lend the money.

For example:

-If your mortgage has a balance of $125,000 at 9.25%,

you have 2 years left to go and the current 2 year mortgage rate is 6.25%.

-Then the lending institution will probably charge you -

$125,000 X 24 months X 3% (9.25 - 6.25) = $7,266.21

However, just to further confuse the issue, the penalty above has not been present valued. This is when a lender charges a lower penalty because you are paying all of the ‘extra’ interest (in the example 3%) now, not over the remaining term. Some lenders present value, other lenders do not.

Home Buyer Plan RRSP Withdrawal Limit Increase!

SUMMARY

The 2009 Federal Budget introduced the following changes affecting Retirement Savings Plans (RSP):

• The Home Buyers’ Plan (HBP) maximum withdrawal limit has been increased to $25,000 from $20,000 for withdrawals made after January 27, 2009.

ADDITIONAL INFORMATION

How much can I withdraw from my RRSP under the HBP?

For withdrawals made after January 27, 2009, the maximum amount that you can withdraw from your RRSP to purchase or build a qualifying home without having to pay tax on the withdrawal is $25,000.

If I withdrew $20,000 from my RRSP under the HBP after December 31, 2008, but on or before January 27, 2009, can I withdraw an additional $5,000 from my RRSP?

Yes, you can withdraw additional funds, as long as the total of all your withdrawals does not exceed the new maximum amount of $25,000. However, under existing requirements, neither you nor your spouse or common-law partner can own the qualifying home for more than 30 days before making the final withdrawal.

Scotiabank offers a 10 year Fixed Rate Mortgage Special

Scotiabank offers a 10 year Fixed Rate Mortgage Special

Vancouver, Mar 6, 2009 (My Mortgage BC) -- -- Scotiabank today announced a reduction to 5.25 per cent from 7.15 per cent in the interest rate for the Bank's 10-year fixed rate, closed term mortgage. The pricing change - effective today - gives homeowners an opportunity to benefit from historically low interest rates.

"This is the perfect solution for customers who are looking for long-term interest rate comfort," said Charles Lambert, Managing Director, Mortgages, Scotiabank. "Prudent customers can now complement their borrowing strategies with plans to be mortgage free within 10 years."

Scotiabank, which offers a full suite of competitive mortgage products, including the popular Scotia Total Equity Plan (STEP), also announced a rate reduction to 3.25 per cent from 5.25 per cent for the Bank's Save Now, Save Later product, a one-year fixed rate, closed term mortgage.

Scotiabank's new 10-year offer reflects the Canada Mortgage and Housing Corporation's (CMHC's) recent expansion of the Canada Mortgage Bonds Program. CMHC introduced the Canada Mortgage Bonds (CMB) program in 2001. It was expanded to include 10-year CMBs in July 2008. The program's objective is to benefit homebuyers and the housing industry by improving access to lower-cost mortgages.

If you are interested in obtaining more information on Scotiabanks 10 year fixed rate mortgage special please don't hesitate to contact me. If you would like to learn more about me and my services please visit Dominion Lending Centres

Proposed Changes for First Time Home Buyers

Home Buyers Plan: Starting January 28, 2009, first time Home buyers can withdraw up to $25,000 from a Registered Retirement Savings Plan (RRSP) to purchase or build a home with out incurring the tax. This limit has been increased from $20,000. For the purpose of the Home Buyers Plan, an individual is considered a first time home buyer if neither the individual or his/her spouse owned and lived in another home in the calendar year of the withdrawal or in any of the four preceding calendar years.

First Time Home Buyers Credit: A tax credit of $5000 has been introduced for first time home buyers that purchase a home after January 27, 2009. The credit for the taxation year will be calculated by reference of the lowest personal tax rate for the year the claim is made. A first time home buyer for the purpose of this credit is an individual that has neither owned or lived or his/her spouse has owned and lived in another home in the calendar year of the claim or in any of the four preceding calendar year.

If you would like to pre-approved to purchase your first house please don't hesitate to contact me at 604-764-6336. I'm a long term mortgage broker working with Dominion Lending Centres.

15th annual free seminar for first-time home buyers

15th annual free seminar for first-time home buyers

Vancouver-area young people are eager to purchase their first homes, but many need help to de-mystify the process. They have lots of questions. How can I be safe purchasing a condo before construction starts? What location is best? What type of home is best matched to my needs and financial resources? What are the mortgage options? What are the legal considerations? How do I benefit from builder licensing and mandatory home warranties?

These and other key questions will be answered by a panel of housing experts at the 14th Annual Seminar for First-time Home Buyers, presented by the Greater Vancouver Home Builders' Association (GVHBA) on Tuesday, March 24 from 7 p.m. to 9 p.m. in the Guildford Sheraton Hotel Ballroom, 15269 104 Avenue, Surrey.

Admission to the popular seminar is free thanks to sponsorships.

Speakers will be determined soon and GVHBA Chief Executive Officer Peter Simpson will be the seminar moderator.

"Our experts will help first-time buyers complete their homework by investigating all available options and issues before they take that crucial first step onto the property ladder,” said Simpson.

"More than 800 people attended last year’s seminar and, because real estate is still a hot topic, including the pre-construction buying process for condominiums, we expect a similar attendance this year. Doors open at 6 p.m., allowing attendees ample time to view displays of new homes, financial choices, warranties and other housing-related products and services," said Simpson.

Pre-registration is required. Call 604-588-5036 from 8:30 a.m. to 5 p.m. Monday to Friday. Registrations will also be taken by answering machine at the same phone number on weekends.

At MyMortgageBC.com we are experts in helping first time home buyers obtain low rate mortgages at no charge. Please contact us at 604-764-6336 for any questions you have about obtaining a low rate mortgage.