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In the grand scheme of screwing the mortgage broker dished out, the appraisal was immaterial. You're approved, no problem. What's the rate? Dont worry, I've got it, it will be great. Repeat a few times then right before closing, out comes the paperwork at 3.5. Screw you raj. Dont have time to go somewhere else at that point. The rate was so bad that the bank called and offered 0.75 lower one year in.
Yup. BMO pulled that **** on us. Dropped that mortgage from them first chance I got. But made sure to make her run through hoops before going elsewhere.
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What's even more fun is BMO made us put the property tax through them. Not happy, but whatever. So we pay the $90/payment to have BMO pay our property tax. Year passes by and I get a letter from City of Mississauga that I'm in default on my property taxes....WTF.
In other news…
Interest rates are headed up. What it means for variable and fixed mortgage rates — Global News
Whether you're shopping for a home or about to renew your mortgage, here's what to know.
Dropping from where? Were the crazy prices from six months ago real or fomo? Houses near me are selling for many hundreds of thousands more than last year. Now they are still listing for peak market prices but hanging out for months instead of selling in hours. One house was going to be listed for ~200 below what they probably could have got and sold in an hour (before it was even listed). Some may argue that they left money on the table, others may be happy that they still got a double digit return for the preceding year. I think they made a mistake and could have got >100K more within a day. I don't anticipate a big correction.
I normally setup variables with a fixed payment a bit above the required payment. Makes the math easier when a round number comes out instead of something like 1987.62. If you set it up so 2250 came out instead, interest rates could go up a few percent without affecting your monthly payment. Functions almost like a fixed but the (normally) better rate means more principal is paid off.
Did that originally but was advised against it by all brokers.
I pick a number that seems reasonable for us and mostly ignore what the bank says. Our first house we pulled 30% of the approved amount (I dont know if we could have kept the house of cards up at the approved amount as it seemed very unreasonable based on our income and I wanted something that could be covered by one salary), this house much closer to the limit but still left a few hundred at the bank. I'm not interested in living like a struggling student for the next 25 years. I know the banks think about it in terms of percentage of monthly income but I prefer to think about it in terms of years of gross income. They seem to approve for ~five times declared gross income (subject to verification).
There's been four years since 1975 where variable paid more than fixed (normally by ~1%, when fixed is worse it is often ~2% worse). Fixed can help you sleep at night so that is worth something.We have had bad experiences with many banks and mortgage brokers.
When I bough the house we went through that large broker. They had a couple of months and I told them the closing date etc.... Kept on them, delays from them, they got back to me with confirmation and paper work a week after closing, WTF! Luckily I had a bank in the mix and they had everything done.
First renewal, we got a better rate from one of the major banks. Over three months lead time. They missed the date which caused a bunch of extra expenses and a higher open rate at the bank we were leaving to bridge the gap. I made them pay us back every penny extra, and they did.
Next renewal, same major bank but different guy, rates on the rise (~4 year ago). Went in a exactly three months before before renewal. Guy tells me 3.19% but he can do way better, give him some time to negotiate a better rate. Month goes by, I follow-up.... the rate is now 3.49% and he never locked in the first rate or tried to get a better one. Lots of stories how he hurt his back, sorry not my problem. Lucky for me I had locked in 2.89% with a credit union as plan B learning from the past....
And at 2.89% I thought I was the bomb, well they are way lower now.... and I bet they are up on our renewal.
I have always done a fixed rate, every time we would have been better off with variable (as is usually the case), my risk style is fixed....
This is the funny part about the big banks. They still treat people as if there are no other choices.
It works for them four out of five times. Being a Dick is very profitable. Same as rogers/bell except they bend the populace over monthly.
Of course it works. They did it to my parents multiple times but my parents keep going back to the same branch and same staff….just like they’ll never buy a non-Nissan.
Wow I can’t even imagine what would happen to our market if we hit 5%….let alone 12%. Instant recession.
Carrying charges are similar to rent. House price times interest rate has been relatively constant over time. Now that house prices have exploded, interest rates dont have a lot of room to move. Even if some people push for that to collapse RE prices, the fallout (economic and mental health) would be very bad for canada.
Sorry but "too big to fail" didn't really work out that good last time.
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