No Closing Cost Mortgage

These are heavy days for Canadian homeowners. If you’ve been in your home even a few years, you’ve probably already enjoyed a modest climb in the value of your home. Even if you don’t intend to sell, it’s good to know that your real estate investment is doing well. But we’re also enjoying an environment in which mortgage rates have reached historic lows.

That combination — strong valuations and low mortgage rates — has an unprecedented number of Canadians looking for ways to capitalize on the great opportunities available to them.

Whether it’s to buy their first home, trade up, or take equity back out of their homes, Canadians are jumping at the opportunity to borrow at today’s rock-bottom rates.

While many homebuyers are reconsidering the value of fixed-rate mortgages to lock in those low rates, you should keep in mind that adjustable-rate mortgages - the darling of the dropping rate trend - can still offer real value to homeowners. It’s a matter of finding the right combination of mortgage features and options.

As banks have been joined by other lending institutions, we have seen our menu of ontario mortgage options grow accordingly - with some innovative new mortgage types now available to help Canadians take advantage of today’s unusual opportunities.

One of the most innovative mortgages we’ve seen in a very long time is a new adjustable-rate mortgage with some very compelling features. First, it’s based on an institutional rate benchmark known as Bankers Acceptance. Most of us are familiar with the rate benchmark known as Canadian Prime - and we are accustomed to assessing mortgage rates based on Prime. The BA, on the other hand, is the rate at which banks will lend money to one another - and it’s typically a lower rate (sometimes much lower) than the prime rate offered to a bank’s best customers. The new BA-based mortgage - compared to the best prime-based mortgage available - could have saved a mortgage client a bundle over the last several years, primarily because the prime rate tends to be “stickier” in an environment where rates are falling. Often, the more fluid, market-based BA rates deliver the rate change more quickly. The BA rate is no trade secret, by the way; pick up a copy of your favourite financial paper and look for the published money rates to find the Bankers Acceptance Rate.

But the attractive rate structure is not the only perk. The same BA-based mortgage - so welldesigned to help clients wring the last quarter point from their mortgage rate - now also comes with a rate cap which guarantees that your rate will never climb higher than 2.15% above the starting base rate - no matter what happens to rates during your mortgage term. There’s no worry about locking in too high because the rate is always adjustable down.

Only the ceiling is fixed. It’s a homebuyers’ dream:

A mortgage with limited upside and unlimited downside. If you’re thinking about buying a home this year, or you haven’t had your mortgage reviewed in the last several months, take the opportunity to get an expert assessment of your many options from a mortgage professional. It could be the best investment you’ll make this year!

Buying a house is a very big investment in your future. The more money you can put into your home, the more you’re likely to get out of it. But, unless you get a low mortgage rate, you’ll find a whole lot of your monthly payments actually end up going to the bank on interest charges than into your actual home.

The better you are at locking in a low mortgage rate, the quicker you’ll build equity in your home. Getting a low mortgage rate, however, isn’t always easy and it requires some time and patience for many people to earn the type of credit scores that justify a bank giving you a low rate.

The best way to ensure low mortgage rates are offered to you by banks, credit unions or even mortgage companies is to plan ahead for getting a mortgage. This means taking actions months and even years in advance to make yourself and any co-borrowers look like attractive customers for lenders.

But what do banks think is attractive? People with good credit scores, reasonable income and a decent savings for a down payment.

To look the best for a bank to consider low mortgage rates, you’ll want to:

* Keep your credit as clean as possible. This means making payments on loans, credit cards and even utilities on time all the time (or as much as possible). It also means ensuring that you have a good mix of credit - revolving loans, regular loans, such as auto loans, and so on. In addition to making your payments, it’s important not to have too much credit. This means striking a good balance between what you’ve borrowed or can borrow and how much you earn. If you can go to a store and charge up more than you earn in a few years at one sitting, you might have too much credit.

* Income. You don’t have to be a millionaire to get offers of low mortgage rates, but you do need to have adequate income. Don’t go after a home that’s out of your financial reach and expect to get low mortgage rate offers. Keep your sights realistic and you’ll find your chances for low mortgage rates are increased.

* Savings. Even if you put $100 a month away every month for six months, a year, several years, all it takes is a little to show a bank you’re serious about saving. The more you can put away for your down payment on a home, the better. But even if it’s a small amount, a long-term track record of savings looks good and can help your chances of being offered low mortgage rates. Banks like to see a history of savings to prove a person is disciplined and understands the value of savings.

Getting low mortgage rates isn’t impossible - even for people with less than perfect credit. The better you make yourself look to lending agencies, the more likely you are to get these. It might take a few years to establish the kind of credit you’ll need for low mortgage rate offers, but it will be well worth the effort in the end. The less you pay in interest, the more money will go directly toward paying off your home.



By: Ben Franklin

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Low Mortgage Rates