August 19, 2016
Saskatoon Mortgage Broker: Tammy Wandzura: Why the differences in mortgage rates-prepayment penalties & broker lenders vs charted banks
There is so much information available now at our finger tips; it’s easy for the average person to quickly become an expert in any topic including mortgages.
I am guilty of heading to my doctors office with a long list of illness’s I may have self diagnosed with the help of the internet (haha)
We have information available via the internet, our friends that have bought or mortgaged homes and of course our family members.
How do you know what best advice to take or what steps to take??
The most important factor to keep in mind: Mortgage rules and the Canadian Mortgage industry can change almost daily. This could mean changes in mortgage rates, changes in lender policy, changes to grant program guidelines, changes to insurer (CMHC/GE/CG) policy or change in Federal guidelines.
As your Mortgage Broker it is my job to stay up to speed with the every changing Mortgage Market so that I can provide you the very best advice.
Every client is different. Every story is different. Every family is different. Every mortgage need is different.
This means the needs for one client may be vastly different than another.
Are you wanting BALANCE? Are you wanting the home of your dreams all while saving for retirement, your kids future, vacations etc??
I am here to structure the best mortgage solution for you; so that you have the lowest mortgage rate. This will allow you to save money for other areas in your life that are just as important as your home.
The BEST MORTGAGE RATE can simply give you extremely affordable mortgage payments (rates are at historical all time lows) so you can SAVE and pay your mortgage off faster!
Prepayment Penalties: doesn’t sound important?
A pre-payment penalty doesn’t sound important until you have to pay it.
Did you know that banks across Canada can charge your penalty in one of two ways if you have a fixed rate mortgag
- 3 months interest
- Interest Rate Differential “IRD”
They charge whichever calculation is HIGHER.
An “IRD” is charged when rates are lower than the current rate you have
This calculation is not regulated.
Most chartered banks will use higher rates to calculate this – while MONOLINE lenders will generally use discounted to discounted rates. This typically means the “IRD” penalty would be significantly less.
What is a MONOLINE lender?
This term is pretty vague and ambiguous to non-mortgage brokers and outside industry professionals. Monoline lenders focus just on mortgages.
Chartered banks are required to balance their books at the end of the year.
They have to take in as many deposits (savings accounts, RRSPs, investments etc) as they lend out. Monoline lenders (or Broker only lenders) only are required by law to lend money out. They focus and are 100% engaged in mortgages.
They are federally regulated by the same bodies
They are generally investor funded. This does not mean individuals have invested money that the bank uses to lend for mortgages. It means big lenders like RBC, National Bank, Home Trust etc are investing in the lenders portfolio.
What does that mean to you?
It means that as Mortgage Brokers we have access to both chartered banks and monoline lenders
When you apply for a mortgage we are listening to all of your future plans and goals so we can determine what the best lender fit is for you
We are always looking to get you the very best rate available that fits within your specific and very unique circumstances.
We pride ourselves on simply OUTSTANDING Customer service.
It is the #1 priority at all times.
I look forward to assisting you with your home purchase, refinance or renewal in the near future!
Tammy Wandzura, Mortgage Broker