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Originally Posted by brian1975
Thank you for all the info! I did contact a mortgage broker today and got some more info as well. I think I'll go with a realtor as well, since I am rookie it might be best to get a ringer in the mix.
I have a second part to add to the equation. Now when it comes to fix/variable..rates. I have no idea what a good rate should be to be honest. I know that low is better but I am very niave when it comes to what a good rate is..etc.
And when it comes to the home inspection fee's,title insurance, legal fee's and other assorted taxes..etc can these be included in the mortgage? like sticky suggested for the mortgage broker, I did not mention these things when speaking with them today. It was a very general meeting, did the credit check..etc gave me the same max level of mortgage I qualify for (which is $40,00 more than i would like to spend on a house).
thanks again for any tips and suggests.
i feel like a guy standing on the street with his wallet open waiting to get robbed!
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Well, I have a variable rate mortgage from the Royal at Prime less half a point. (Prime is 4.25 right now, so my mortgage is 3.75%) I have had a variable rate mortgage for 4 years and have been doing great by it. (Before that I had a 5 year fixed at 7.15% which was great at the time.)
Let me put it to you simple.
Every single percentage point that the rate increases costs you $1,000.00 per hundred thousand dollars of mortgage just in INTEREST. So, if you have a $200,000.00 mortgage and the rate differs by 1%, that's 2 grand in interest and so on, and so on.
Thing is, the interest rates will probably rise in the next six months (so the pros are saying.) David Dodge at the Bank of Canada had been trying to raise rates previously (and did so on a couple of occasions) but the damn Canadian Dollar took off like a rocket and was hitting the manufacturing sector HARD, so he has put the interest rate hike thing into neutral.
He's still itching at the trigger though to raise rates, but he CAN'T just yet because the dollar is hurting the manufacturing sector. If he raises rates, the Canadian dollar will soar to 90 cents or beyond. If the economy picks up though, he won't hesitate to raise rates.
Also, Allan Greenspan is raising interest rates in the states (for the first time in a long time, the Canadian overnight rate is less than the US overnight rate). As Greenspan raises, it will give Dodge some room to also raise.
So, it's a crap shoot as to whether or not to go variable or fixed.
If you can get a five year fixed at 5% or less, I would be tempted to go for that.
That being said, the pros say that Dodge when he raises rates will probably go about a 2% increase, so based on where rates are now, that would mean that my mortgage rate would rise to 5.75 (as a variable) which is still pretty good.