Some More Mortgage Terms and Rates

Here are some more terms explained to stay sane in an ocean of mortgages. And the rates we are getting this week are as following:

3 Year Fixed Rate 2.95%

4 Year Fixed Rate 3.09%

5 Year Fixed Rate 3.39%

Variable rates: The interest rate on a variable-rate mortgage is tied to the bank’s prime rate. The prime rate, in turn, goes up and down according to the overnight rate, which is set by the Bank of Canada. A variable rate mortgage can typically be locked-in at a fixed rate, but sometimes there is a fee. Ask your lender for more details!

Fixed rates: These rates are locked in for the length of your term, and they tend to be higher, but you’re paying for peace of mind. The payments, and the amount of interest that you owe, will not change during the term. These rates are dictated by supply and demand in the bond market, which, in turn, is influenced by world events – anything from the European debt crisis to the health of the Chinese economy to the health of Canada’s manufacturing sector can push these rates up and down – that’s why it’s so difficult even for experts to know where rates are headed.

Open: An open mortgage means you can pay the mortgage down or off entirely at any time without any penalties. These typically carry a higher interest rate.

Closed: A closed mortgage means that you will be restricted to how much of the principal you can pay down ahead of schedule. Most mortgages allow what are known as pre-payments or extra payments towards the principal of about 20 per cent per year. Check with your lender for more details. Some mortgages allow you to double up on your payments.

More on the topic:

Mortgage Basics

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Mortgage Basics

Mortgage basics:

A mortgage is a loan to buy a home. Like any loan, interest is charged on the amount you borrow (the principal). Each mortgage payment consists of repayment of the principal, plus interest.
But there are a few characteristics that differentiate a mortgage from other types of loans.

Principal versus interest In the early years of a mortgage, a greater percentage of each payment covers interest charges and a smaller percentage covers principal repayment. As the amount you owe decreases, more of each payment goes toward paying down the principal.

Building equity The more principal you pay down, the more equity you build up in your home. Basically, equity is the amount of your home that you own. If your home is worth $300,000 and your mortgage is for $250,000, you have $50,000 in equity.

Mortgage options:
With a number of options available, you  can tailor your mortgage to your lifestyle, your current financial situation, and your risk tolerance. Here are the main choices you can discuss with your Mortgage Representative or Mortgage broker.

Amortization The amortization period is the length of time it will take you to pay off your entire mortgage. The traditional amortization period is 25 years. You may choose a shorter amortization period or greater (up to 30 years). The longer the amortization, the lower your monthly mortgage payments, but the more you will pay in interest over the life of the mortgage.

Term The mortgage term is the amount of time your mortgage contract is in effect. At the end of each term, you need to renew your mortgage for another term. This is an opportunity to consider whether you’d like to make any changes to your mortgage. Most mortgage terms are five years, though shorter or longer terms may be offered. The agreed-upon interest rate is in effect for the term. At the end of the term, you can renegotiate the rate and other details of the contract for the next term.

Succesful People from Our Neighborhood – Lisa D’Avino

Please, kindly welcome –  First Lady in this rubric –  Lisa D'Avino – from Brampton, ON. Beautiful, successful, kind, highly intelligent  – a rare combination of qualities that turns a Lady into a Fair Lady!
Lisa is also
       – busy mother of 2 teen boys
     – Mortgage Broker and co-owner with her partner Angelo of Mortgage Alliance Design A Mortgage – an independently owned franchise of the Mortgage Alliance Network
       – as well, she is involved in helping people and in particular women earn an extra income developing a health and wellness business

lisa davino bus photo

Lisa, how long have you been in Canada?

I am born and raised in Canada.

What was your dream as a child? Did it come true?

I knew I wanted to help people but I did not quite know in what way. I was a very independent child, confident yet shy which I believe gave me the ability to really listen to other people and have understanding and compassion for everyone's unique circumstances.
I wanted to be a lawyer because I love language, words and the power of persuasion. I think language is so important and how you use language in an argument can make all the difference in how a message is perceived.
Well I guess it sort of came true. I did not become a lawyer but I definitely help people. I started in banking at 17 years of age and continued to move around to different positions learning how to analyze credit applications along the way and was promoted to branch manager at the age of 25 (a long time ago now!) After my 2nd child was born I went back into account management and realized that I wanted to specialize in mortgage financing and then left banking to develop my own mortgage practice. I love helping people realize their dream of home ownership as well as helping people in difficult financial circumstances find solutions. Getting back to the power of language, often the difference between obtaining a solution that meets a client's needs is determined by truly understanding the circumstances and presenting the case to a lender in a way that they fully understand the clients circumstances without having ever met the client. In my wellness business I love helping people find their own potential to develop a part-time or full-time income of their own depending on their needs, wants and circumstances.

What was your first job and what was your worst job?

I got my first job at the age of 13. It was in a local bowling alley working at the snack bar on Saturday nights 4 to midnight and Sunday's noon to 4 and I did that for over a year. We had the usual soft drinks, chips and chocolate bars but I also had to cook burgers on the grill and managed the cash. It was probably my worst job as well come to think of it. I worked alone which was not so crazy Saturday nights but Sunday afternoons was league day. It was so busy and I still worked alone flipping burgers, serving drinks, doing cash, cleaning up and balancing the cash at the end of the day. It was very stressful on Sundays and I did not have much of a weekend life but making some cash money that I had control over at 13 wasn't so bad.

Lisa, could you tell us a funny story from your life?

Hmmm a funny story. Well I don't consider myself to be particularly funny but there was this one day that my partner and I took my family boating for the day out on Lake Ontario. My mother and sister were not that comfortable on boats to begin with but we picked everyone up in our boat in Port Credit and decided to go to Centre Island for the day which took maybe 20 minutes to boat to. It was a beautiful sunny day and we parked the boat at the island docks on inner side where you can see downtown Toronto from and the waters are calm. Later in the afternoon my mom and I decided to go for a walk and made our way to the other side of the island where the beach is looking out to the open waters of Lake Ontario. It was still a beautiful day; the sun was shining and it was hot but was starting to get a bit windy. I looked out at the water and it was starting to get really rough as Lake Ontario can get but because it was so sunny and warm I didn't think to mention the choppy lake to anyone when went back to pack up the boat and head back to Port Credit. Well ….when we got out to the water it was not just choppy but it was clear a storm had been brewing and it was extremely rough and dangerous. The skies turned to gray and waves were crashing in on the boat from all directions. Other boaters were signaling us to turn around as we were making our way through the Western gap out to Lake Ontario where is was It was at that point I mentioned that I had noticed the water getting rough but it was on the "other side" of the island so I didn't think to mention it which was clearly not funny at the time but very funny now looking back at it. Instead of going back to Port Credit we made our way across to the Humber river bridge and up the river where we had our car to drive everyone back. What should have been a 5 minute boat ride across took a harrowing hour and a half of rolling waves from all directions and my very frightened family huddled down below the deck in the cabin thinking they were going to die. It was bad out but we were ok. I was never able to get my mother out boating again after that!

Lisa - Cheers!

Do you like to travel and where would you like to go?

I love, love to travel. I love Europe for its history and beauty and fun culture and then I love to relax on a beach in Mexico or Cuba. I would love to go to some more exotic beach locations like Bora Bora.

What do you like to do when you have some spare time?

I like to spend time with my boys. We like to watch movies. I love horses and horseback riding and would like to do more of that as I have not been in many years.

What is the most challenging part of your job?

The most challenging part of the mortgage business is keeping up all of the government and lender changes to their lending policies and finding new ways to provide solutions to clients where government changes have made it more difficult.

What part of your job do you like the most?

I like to educate first time home buyers on the steps involved in achieving home ownership and then continuing to guide them in ways that will help them pay off their mortgage faster.
As a business owner I enjoy taking on new mortgage agents into the profession and helping them develop their business. I enjoy sharing the knowledge that I have experienced over the years.

Lisa in Vancouver

What is success for you?

Success is not just about the amount of money I make but about the lives that I can affect. Having a positive impact on people's lives gives me a sense of purpose. Success is about being respected for what I do and who I help. Success for me is also about teaching my sons to grow up to be honorable, responsible adults.

What do you still want to achieve?

As we just started the company 2 years ago we haven't achieved the success in our business yet that we would like. We want to develop a medium sized team of successful mortgage agents that earn both financial and professional success. In my wellness business I am excited about affecting the health of as many people as possible and when that happens I know that I will have helped many people achieve financial success in the process.

Is there anything you are afraid of?

I am always afraid for the health and wellbeing of my family.

And our traditional last question: what is home for you?

For me home is a place of comfort and a gathering place to create meaningful memories. We love to entertain family and friends in our home.

Lisa and Family

Thank you very much, Lisa for your time, your experience that you share so willingly and your charming personality! I am pretty sure when our readers have any mortgage related questions they will have no doubt on who they should call. And in a mean time everyone is welcome to leave comments here!

Cheers!

Marina

My official web-site http://marinag.ca/
Tel: 416-843-1515