Pay down your mortgage faster

Buying a home is probably the best investment you will ever make. That's because you can pay off your mortgage and build equity in your home over time. Renters on the other hand will continue to pay rent and will likely see their rent payments increase significantly as time goes by.

From the moment you make that first mortgage payment, you will probably be dreaming of the day when you can make your last one and be "mortgage-free." For most people that day is pretty far off in the future, but it is possible to speed up the process.

Your REALTOR® will be able to advise you on ways you can pay down your mortgage as quickly as possible. This information will be helpful when you are arranging financing on your home. Be sure to discuss various options with your financial institution before choosing a mortgage.
Amortization schedule
One of the best ways to pay off your mortgage faster is to shorten the "amortization period." By choosing a shorter amortization, you will not only pay for your home in less time, but you will make substantial savings in interest too.

For example, the most common mortgage amortization is 25 years. By shortening that period to 15 years, you will erode the amount of money you owe much more quickly and make fewer interest payments. Shortening the amortization period is not for everyone as it does mean larger payments, but for many people the benefit of long term savings is worth it.

Usually each mortgage payment is blended and applied to both the principal and interest so at the beginning, the interest portion of the payment is extremely high. However, with each payment, more and more of is applied to the principal. Ask your REALTOR® to give you examples of what your payments would be at the current interest rate amortized over 25 years as compared to 15 years.

Payment options
It used to be that most people made monthly mortgage payments, but weekly, bi-weekly and semi-monthly payments are more popular today. With these types of payment options you will reduce the amount of principal you owe faster because you make payments on a much more frequent basis and less interest is accrued. Many mortgages also offer homeowners the option of making an additional payment each year or increasing your payment each month. Making the equivalent of one extra payment a year can save you a considerable amount over time.
Anniversary date
Many mortgages allow you to make a lump sum payment on the anniversary date of your mortgage. Again this reduces the amount of money you pay interest on resulting in long term savings. It's wise to find out what "pre-payment" privileges are available on the mortgage you choose.

Your REALTOR® along with either your bank, trust company or mortgage broker can help you look at all the possibilities for financing your home and can tailor a mortgage that fits your income and your goals.
Shop around
Look for a mortgage that has as much flexibility as possible. Be sure you can make at least one extra payment a year and can choose the payment plan that works best for you. Your REALTOR® is experienced and knowledgeable about the many mortgage options and the types of payment plans available and can act as your guide to help you become mortgage free sooner.

REALTOR® is a registered trademark of REALTOR Canada Inc., a company owned equally by The Canadian Real Estate Association and the National Association of REALTORS® and refers to registered real estate practitioners who are members of The Canadian Real Estate Association. Used under license.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Source: Ontario Real Estate Association

Canadian Real Estate Forecast

A burst of activity- particularly in British Colombia, has caused CREA to adjust its’ forecast for 2011 and 2012.

They now expect national sales activity to reach 441,100 units in 2011, which is down by 1.3 % from 2010. This is slightly better than the 1.6 % decline forecast by CREA in February, driven in part to stronger than expected activity in British Columbia in Q1 2011.

Looking forward to 2012, CREA expects that that national sales activity will rise by 2.6 % to 452,500 units. This is much the same as the previous forecast, and is in line with the ten year average for annual activity.

Looking at average home prices across the country, CREA forecasts that prices will rise a respectable 4% this year and an additional nine-tenths of a per cent in 2012, to $352,500 and $355,800 respectively.

This reflects an increase over the previous forecast, due to an unexpected surge of buying activity of multi-million dollar homes in British Colombia- in particular in Vancouver. This emphasizes the tremendous impact too, that this activity localized to BC will actually have on the whole country.

There is some expectation too, that a rise in interest rates in the next few months will not have a huge material impact on housing sales, and CREA largely expects gains to reported on the heels of a modest dip in the last quarter.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Almost 40% of Young Condo Buyers Not Aware of New Lending Rules

A recent poll conducted by Environics Research Group for TD Canada Trust reveals, not surprisingly, that the majority of urban Canadian condo buyers are first-time home buyers.

Environics polled 806 people in Montreal, Toronto, Calgary and Vancouver who have bought a condo in the past 24 months or intend to buy a condo in the next 24 months. Results revealed interesting attitudes among participants under the age of 35.

For example, under-35 buyers surveyed don't plan to stay in their condos long: 45 percent plan to move after four to six years and 22 percent don’t intend to stay more than three years.

Despite extensive media coverage of Federal changes to mortgage lending rules, 39 percent of survey respondents under age 35 who are planning to buy a condo were not aware of these changes, which could significantly impact their buying options and payments.

The survey also found that, for younger respondents, affordability is the biggest driver in choosing a condo and two-thirds of young urban Canadians would rather buy a house. The opposite is true for the over-50 age group surveyed, who are thinking about downsizing.

The survey results beg the question: “Are young home buyers being realistic about home ownership?” In today’s market, there are likely investment advisors who would strongly caution first-time buyers against buying condos with the assumption that they will have enough equity to ‘trade up’ to a more expensive home after only a few years.

Maintenance and amenity fees combined with monthly interest payments must be factored in when considering the purchase of a condo. The higher these payments - the less equity you could be building over the short term.

Perhaps it is the unbridled pace of growth and low interest rates that have influenced a belief that profits can be made quickly in real estate. Those who got in at the bottom of the real estate boom saw great returns on investment; but like everything else, markets are cyclical. Over-leveraging yourself on the assumption you can turn around and sell your home quickly can be dangerous.

With lending rates predicted to rise, using a mortgage broker to shave even a few points off your mortgage rate and maximizing your down payment can add up to big savings over the life of your mortgage, not to mention smaller monthly payments. This means less money going to pay off interest and more going into your pocket.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Canadian Home Pricing and Consumer Confidence

Consumer confidence rose by 4 points in April over the previous month, according to the Conference Board of Canada consumer confidence index. It also revealed a sharp shift in Canadians' attitudes toward making major purchases such as homes, appliances and automobiles.

For the first time in almost a year, survey respondents who think now is a good time to make a major purchase outnumber those who don’t. While results vary by province, news reports on the index highlight that Canadians overall seem to be more positive about job prospects and financial security.

As consumer confidence goes up – more good news for prospective home buyers is that prices appear to be levelling off in several real estate markets. The Taranet - National Bank of Canada House Price Index is a composite index of housing prices in six metropolitan areas – Halifax, Montreal, Ottawa, Toronto, Calgary and Vancouver. In February, it showed a modest 0.08 overall rise in repeat sale prices over the previous month, with prices going up in some markets and down in others.

Inflation, along with growing consumer and investor confidence, has economists speculating that the central bank will raise its key interest rate on May 31. Some predict it could go as high as two percent by year’s end and put downward pressure on housing prices.

If you can absorb the effect of a rise in interest rates on your monthly mortgage payments, it might be worth waiting to see where prices go; if you're sensitive to rate fluctuations and seeking a long-term property investment, now may be the time to make your move.

It’s Your Career – I’m Here to Support YOU!

Constantine Isslamow | Broker of Record -

CENTURY 21 United Realty Inc. Brokerage
Direct Line: 705.743.4444 |
Constantine.Isslamow@century21.ca
www.ConstantineIsslamow.com

Buyers Agent or Multiple Representation?

Q: Why should I work with one agent when buying a home? Isn’t it better to keep my options open by having multiple agents send me information about available homes?

A: Loyalty is a two-way street. A good agent will bend over backwards for his or her client, as long as the agent knows that the client won’t defect to another agent once the perfect home is found. When a great listing comes on the market, who do you think the Realtor will call first, a client who is working exclusively with this Realtor, or someone who told the agent “call me if you find something interesting” and is juggling several Realtors at once? You’ve guessed it; the loyal client gets the first call.

Choosing a Buyer’s Agent to work with exclusively benefits both of you. You get a professional who is obligated to find you the home you’ll fall in love with, answer any questions or unknowns about the process, negotiate on your behalf, take care of all the paperwork, and look out for your (not the seller’s!) best interests. The agent gets the peace of mind of knowing that after working hard to find you your dream home, he or she will get paid. That sounds pretty fair, doesn’t it? And since the seller, not the buyer, pays the agent, it is hard to understand why any buyer would not want to have a dedicated Buyer’s Agent at his side.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705।743.4444 | Fax: 705-743.3702 | E-Mail:
Constantine.Isslamow@century21.ca
www.ConstantineIsslamow.com

Mortgage Business Down Due To Government Changes

Recent mortgage-rule changes have eroded volumes by as much as 15 per cent, possibly reflecting the loss of clients to the alternative lending market.

What we’re seeing is a loss of what were A clients that no longer qualify as borrowers with us because of the rule changes.

Leading that migration are clients looking to refinance above the new cap of 85-per cent of value. Others include new borrowers who need amortization terms longer than the new maximum of 30 years.

Starting March 18, Ottawa withdrew government backing for 35-year mortgages, lowering the cap to 30. Among other key changes, meant to rein in on record-high levels of consumer debt, the federal government also lowered the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes.

Starting today, it has also withdrawn government backing on any new lines of credit secured by homes, such as home equity lines of credit – HELOCs. It means many A-type clients may now be unable to obtain a line of credit at 80% LTV or higher. More importantly from Canadiana’s perspective, they can’t qualify for refinances above 85 per cent despite relatively low risks of default.

It's Your Career - I'm Here to Support YOU!

Constantine Isslamow

Broker of Record / Mortgage Broker

CENTURY 21 United Realty Inc. Brokerage.

Independently Owned & Operated

CENTUM Core Financial Inc. Brokerage License #: 10642 Constantine Isslamow License#: M08005391

Friends, followers and Connections are the way of the future.

Thinking of Using a Mortgage Broker?

Despite the abilities of mortgage brokers to find rates for home buyers often lower than those posted by the big banks, some buyers are reluctant to leave the comfort of their lending institutions in favour of personal ‘agents’ working in their best interests.

This is supported by evidence that in Canada, first-time buyers are the most likely to use mortgage brokers, while repeat buyers tend to become loyal to their initial lending institutions and are a little more reluctant to switch to independent brokers.


But why?

Brand Loyalty

It’s hard to break up with your long-term financial institution, but switching your mortgage provider doesn’t mean you have to leave your bank. Maybe it’s the fear that your once friendly local bank manager will suddenly treat you like stale cheese, but banks understand - and you might be treated even better when it’s evident that you’re calling the shots.

In fact, it’s a badly kept secret that some of the lowest rates sourced by mortgage brokers are from top financial institutions in the country.

Fear of Hidden Costs

It might seem too good to be true, but consumers generally pay nothing to employ the services of mortgage brokers: financial institutions work with our industry because they know we’re likely to bring them qualified buyers, and they compete to pay us commissions.

When you use the services of a mortgage professional at a lending institution, you are exposed only to the rates and products of that one institution. A mortgage broker works for the buyer as opposed to the lender and has access to 40+ lenders across Canada. Why not let someone negotiate the best deal on your behalf?

Expertise and Reliability

Not all mortgage broker companies are created equal. It’s important to find a broker that you trust and is backed by a solid brand and reputation.

Having a qualified CENTUM mortgage broker working for you as a home buyer doesn’t usually cost you anything – but the advantages can save you thousands of dollars over the life of your mortgage.

It's Your Career - I'm Here to Support YOU!

Constantine Isslamow -

Mortgage Broker

CENTUM Core Fincial Inc. Brokerage License 10642

Constantine Isslamow License M08005391

Independently Owned & Operated

Friends, followers and Connections are the way of the future.