First of all, I want to thank Melissa for making my first time going through this experience of purchasing a home an exciting but simple process. I initially met Melissa through family for which she was working with, and from that initial meeting her professionalism and organizational skills demonstrated what to expect when working with her.
Melissa was able to book viewings with ease, even with my difficult schedule to work around. With each viewing she provided knowledgeable and relevant information from her personal and professional experiences. She gave great advice in relation to all aspect of buying my first home.
Melissa helped me feel comfortable and confident through her patience, knowledge, and support throughout this experience. It was a pleasure working with Melissa, and I would recommend her to any of my friends and family.
I have now worked with Melissa, and the Krause Team, on two separate occasions. Initially in 2012 as she helped me close on my previous house and most recently in the sale of that house and the purchase of our new home. Not only was she able to get me above asking for the sale of my home but was also able to negotiate our purchase below the list price which is hard to do in today’s market.
While always being very professional and knowledgeable about the market, what I think I most cherish about Melissa is her dedication to go beyond the call of duty as she understands the emotions and attachments people have with their homes. She helped me through a difficult time in my life and I will be forever grateful.
Melissa and the Krause Morris Team are at the top of their game and I would recommend their services to anyone wishing to buy, or sell, their home.
Bi-weekly and weekly payments
Most mortgages have the option to allow payments to be made on a weekly or bi-weekly basis. This option may be desirable for two reasons. The first is it can save you money as you can expect to pay off your mortgage about 4 years sooner. This can save you dramatically over the life of your mortgage. The other reason why these options are so popular is that if your employer pays you on a weekly or bi-weekly basis, you can simplify your budgeting by making the payment line up with the way you paid.
Making Extra payments
Paying extra amounts on your mortgage can make a big interest saving over time. When we select a mortgage company, privilege payments options are something that we look for. A 20% privilege payment will allow you to pay off up to $20,000 per year on a $100 000 mortgage. It is important that the privilege payment also be flexible to allow you to pay smaller payments on the mortgage and as often as you wish. An extra $1000 periodically paid on a mortgage can help you become mortgage free faster.
Reducing the CMHC fees on your purchase
When you require a mortgage for more than 80% of the purchase price of a property, that mortgage must be insured by Canada Mortgage and Housing (CMHC) or GE Mortgage insurance. The premium charged by these company`s decreases as the down payment increases. When you finance your property at 95%, a premium of 3.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price the premium can be reduced to 2.5%. If you can put down 20%, you can avoid any additional insurance fee. Depending on your situation there are ways that you can structure this financing to avoid the CMHC or GE insurance premium.
Advantages of Bigger Down Payments
As mentioned above, when you put a 20% down payment on your purchase you can avoid the CMHC premium. More importantly the larger the down payment, the lower the amount of interest you will pay over the life of your mortgage. It is important to note that it may not be wise to stretch yourself to increase your down payment and end up borrowing on credit cards or a line of credit at a higher rate.
Short Term Rates vs. Long Term Rates
The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6-month terms to 10 year terms. Taking a variable or floating rate mortgage can have savings. Typically the shorter the term or guarantee of the rate, the lower the rate will be. This does not always happen, depending on the market place and the economy, but history has shown that short-term rates tend to be lower than long-term rates. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.