Posted on: 20-09-05 00:28:58
Pramod
I just heard a financial institute offering prime - 0.8% compounding semi-annually and FULLY OPEN. Too good to be true. Is this true?
Quote:
Orginally posted by Mercury
Pramod
I just heard a financial institute offering prime - 0.8% compounding semi-annually and FULLY OPEN. Too good to be true. Is this true?
Hi Mercury,
Some banks keep on bringing some promotions from time to time as they have either surplus funds to invest in mortgages or want to increase their mortgage portfolio. One Bank had this limited time promo of fully open variable at prime - 0.85 not so long ago and some of my clients took advantage of the same.
Prime -0.80 is presently being offered by a number of lenders but it is either a 3 year term or a 5 year term. However, it does not matter as only a fraction of the clients are in a position to completely pay off the mortgage in either 3 or 5 years. Even right now I can get my clients prime -0.85 variable rate with semi annual compounding and good pre payment privileges with weekly, bi-weekly or monthly payments.
Morever, not all the variable products are same. As you mentioned the bank is compounding the interest semi annually but the same may not be offering weekly accelerated or bi-weekly accelerated payment schedule which could shave off years from your amortization. It is also to be noted that some banks would charge an extra surcharge of .25% on a CMHC mortgage which coulld mean more than $500 extra burden on you on a mortgage of $200k. Also some banks would insist on a minimum of 10% down payment while a couple of others would give you variable product even with 5% down payment.
If you want to know more about the variable products or would like to take advantage of prime -0.85% (limited time offer) you can contact me directly.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Orginally posted by Pramod Chopra
As you mentioned the bank is compounding the interest semi annually but the same may not be offering weekly or bi-weekly payment schedule which could shave off years from your mortgage term.
Pramodji,
With due respect to you, but somehow I beg to disagree on the point that bi-weekly or weekly payt option can shave off years of amortisation. IMHO instead of bi-weekly or weekly payt (wch can reduce amortisation by few months), what is imp is ACCELERATED payt that can result in reducing your amortisation.
Please correct me, if I am wrong.
Rest of what you said is absolutely correct. I shall talk to you soon.
Take care.
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Let's help each other to grow & prosper in Canada
Quote:
Orginally posted by reachash
Quote:
Orginally posted by Pramod Chopra
As you mentioned the bank is compounding the interest semi annually but the same may not be offering weekly or bi-weekly payment schedule which could shave off years from your mortgage term.
Pramodji,
With due respect to you, but somehow I beg to disagree on the point that bi-weekly or weekly payt option can shave off years of amortisation. IMHO instead of bi-weekly or weekly payt (wch can reduce amortisation by few months), what is imp is ACCELERATED payt that can result in reducing your amortisation.
Please correct me, if I am wrong.
Rest of what you said is absolutely correct. I shall talk to you soon.
Take care.
HI Reachesh ji,
You are right. What I meant was 'accelerated' weekly or bi-weekly payments which would definitely reduce the 25 year amortization to app. 21.5 years.
Since we never advise any client to go for 'regular' weekly or bi-weekly payment and we always mean 'accelerated' weekly or bi-weekly payment only and hence the slip.
Thanks for pointing it out for the benefit of general readers. I have edited the post to reflect the correct wording
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Pramod,
Thanks for the clarification. Let me rephrase the question. Is there any mortgage product which offers 5 years term VRM prime -0.80% and it is fully open ?
Quote:
Orginally posted by Mercury
Pramod,
Thanks for the clarification. Let me rephrase the question. Is there any mortgage product which offers 5 years term VRM prime -0.80% and it is fully open ?
Hi Mercury,
Sorry for the delay in replying.
Yes there is an even better mortgage product right now for a limited time promotion and it is 3 year variable FULLY OPEN mortgage prime - .85 for applications received from August 22nd 2005 and September 30th 2005
and funded between September 12th 2005 and February 28th 2006.
If you want this product, you can contact me at the earliest.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Hi Pramod,
Thanks for your valuable advise to this forum.
My mortgage is due in March and I am with scotia.
They are willing to extend the deal & offering me 5 years variable and prime minus .85.
Shall I go ahead! Need your expertise please.
Thanks.
