How To Choose The Loan Strategy That Is Best For You? - Pret Hypothecaire
Choosing your home loan strategy prt hypothcaire
A good home loan strategy canl save you a lot of money: thousands and even tens of thousands of dollars on a $100,000 mortgage.
It's considerable.
We will now take the time to answer a big question :
How do I choose the right mortgage strategy?
The easy answer: contact a mortgage specialist who specializes in creating a unique mortgage strategy for their clients - pret hypothecaire.
Why?
There are three good reasons:
1.Nobody knows the future of interest rates in Canada.
2.The right strategy must take into account the current and future economic context.
3.One has to customize it according to your objectives and personal situation.
All this is not that simple, and it is best to consult a mortgage broker who does this every day.
But let's not stop there.
The more difficult response is to analyze several factors in creating a mortgage plan.
An expert such as this will understand each strategy that exists and how it should be applied, will know how to properly combine strategies in the best way to serve the borrower, will know about the economy and interest rate cycles and how they will affect the chosen strategy.
Understanding the interest rate cycle is a complex area, and many, many books have been written about it. Here, in as simple explanation as possible, are the basics:
-Interest rates generally increased from 1950 to 1980.
-Interest rates generally decreased from 1982-2003
-Interest rates have remained fairly stable from 2003 to 2006.
Without looking at these trends, no one could have been able to devise a successful strategy; if you created a strategy designed for falling interest rates and the rates went up, your strategy would have been a total disaster.
In order to understand and work with these trends, two rules of the economy need to be applied:
1. Interest rates typically track the inflation rate. This means that if we see the CPI (Consumer Price Index) increase, we can expect an increase in interest rates.
2. Interest rates reflect the health of the economy. In a strong economy, interest rates will be higher because there is more demand for money, and when the economy is weaker, interest rates will be lower.
We cannot predict interest rates with any degree of accuracy, but we know that interest rates over the last thirty years were averaging 9.6%, while they are now around 5%. (pour un prt hypothcaire)
There are basic strategies to work with, and on top of that, a good mortgage consultant will find ways of combining the features of different strategies to suit the needs of his client. It can never be one size fits all when it comes to home loan strategies; knowing the best strategy or combination of strategies in each situation takes a mortgage professional.
The basic mortgage strategies:
5 times 5 renew a mortgage five times with a fixed term of five years.
Long-term a fixed-rate mortgage for 15, 18, or 25 years.
Variable rate mortgage whose rate varies with the base rate of the Bank of Canada.
Smith Maneuver' and the cash flow dam a strategy that permits you to eventually deduct interest paid on your residence from your personal taxes (salaried or self-employed worker).
More retirement an excellent way to use the equity in your home to supplement retirement income.
No down payment This strategy allows one to calculate the savings and buy right away without a down payment, rather than rent an apartment while you accumulate the minimum down payment of 5%.
Less than perfect credit help repair a poor credit rating in order to obtain an excellent rate in the future.
An expert mortgage consultant (prt hypothcaire) will review all of these options with you and devise the strategy that will save you the most money over the life of your home loan.
This what it means when it is said that a good loan strategy is so much more valuable than getting the lowest interest rate.
Each strategy must be analyzed on its own merits vis- -vis the situation and needs of each borrower and state of the economy.
So what should a borrower be doing? The only way you can be guaranteed to find the loan strategy that works for you is to contact a mortgage expert and work with him towards the perfect strategy for your situation. The consultation is free, but it may save big in the long run.
A good home loan strategy canl save you a lot of money: thousands and even tens of thousands of dollars on a $100,000 mortgage.
It's considerable.
We will now take the time to answer a big question :
How do I choose the right mortgage strategy?
The easy answer: contact a mortgage specialist who specializes in creating a unique mortgage strategy for their clients - pret hypothecaire.
Why?
There are three good reasons:
1.Nobody knows the future of interest rates in Canada.
2.The right strategy must take into account the current and future economic context.
3.One has to customize it according to your objectives and personal situation.
All this is not that simple, and it is best to consult a mortgage broker who does this every day.
But let's not stop there.
The more difficult response is to analyze several factors in creating a mortgage plan.
An expert such as this will understand each strategy that exists and how it should be applied, will know how to properly combine strategies in the best way to serve the borrower, will know about the economy and interest rate cycles and how they will affect the chosen strategy.
Understanding the interest rate cycle is a complex area, and many, many books have been written about it. Here, in as simple explanation as possible, are the basics:
-Interest rates generally increased from 1950 to 1980.
-Interest rates generally decreased from 1982-2003
-Interest rates have remained fairly stable from 2003 to 2006.
Without looking at these trends, no one could have been able to devise a successful strategy; if you created a strategy designed for falling interest rates and the rates went up, your strategy would have been a total disaster.
In order to understand and work with these trends, two rules of the economy need to be applied:
1. Interest rates typically track the inflation rate. This means that if we see the CPI (Consumer Price Index) increase, we can expect an increase in interest rates.
2. Interest rates reflect the health of the economy. In a strong economy, interest rates will be higher because there is more demand for money, and when the economy is weaker, interest rates will be lower.
We cannot predict interest rates with any degree of accuracy, but we know that interest rates over the last thirty years were averaging 9.6%, while they are now around 5%. (pour un prt hypothcaire)
There are basic strategies to work with, and on top of that, a good mortgage consultant will find ways of combining the features of different strategies to suit the needs of his client. It can never be one size fits all when it comes to home loan strategies; knowing the best strategy or combination of strategies in each situation takes a mortgage professional.
The basic mortgage strategies:
5 times 5 renew a mortgage five times with a fixed term of five years.
Long-term a fixed-rate mortgage for 15, 18, or 25 years.
Variable rate mortgage whose rate varies with the base rate of the Bank of Canada.
Smith Maneuver' and the cash flow dam a strategy that permits you to eventually deduct interest paid on your residence from your personal taxes (salaried or self-employed worker).
More retirement an excellent way to use the equity in your home to supplement retirement income.
No down payment This strategy allows one to calculate the savings and buy right away without a down payment, rather than rent an apartment while you accumulate the minimum down payment of 5%.
Less than perfect credit help repair a poor credit rating in order to obtain an excellent rate in the future.
An expert mortgage consultant (prt hypothcaire) will review all of these options with you and devise the strategy that will save you the most money over the life of your home loan.
This what it means when it is said that a good loan strategy is so much more valuable than getting the lowest interest rate.
Each strategy must be analyzed on its own merits vis- -vis the situation and needs of each borrower and state of the economy.
So what should a borrower be doing? The only way you can be guaranteed to find the loan strategy that works for you is to contact a mortgage expert and work with him towards the perfect strategy for your situation. The consultation is free, but it may save big in the long run.
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