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Review Your Mortgage Renewal Before You Sign

I came across an interesting article by Kelleway Mortgage Architects...

Have Us REVIEW Your Mortgage Renewal Before You Sign

Recently I was invited to attend an all-day financial planning seminar hosted by Custom Plan Financial located in Vancouver, BC. From a presentation by Manulife One and several conversations with financial planners, here are a few thoughts to pass along.
1) In Canada, 50-60% of mortgage borrowers automatically sign a renewal with their current lender after their mortgage term expires (e.g., most commonly 5 years after the original funding date).
2) As a mortgage broker, I have heard many times from borrowers that the rates their current lender (e.g., big bank or credit union) were offering at renewal were 0.5% to 0.75% higher than mortgage rates currently available elsewhere.
3) Even after negotiating with their current lender at renewal, borrowers often received a mortgage rate higher than a new customer would receive from that same lender at that same time.
In addition, some borrowers discover that their current advanceable mortgage (which allows them to easily borrow money from their home equity) has a collateral charge attached. A collateral mortgage cannot be transferred to another lender - even at the end of your mortgage agreement - without the help of a real estate lawyer to break your agreement, thus incurring legal costs. Also, on paper, the collateral charge can make it look like you have more debt than you do as the lender can register your mortgage for up to 300% of the value of your home. In effect, there may be no “equity room” left for another lender to offer you a second mortgage secured by your property.
Read the full article here: https://goo.gl/Xf7Sfq
Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
cell: 604-855-2521
TF: 1-877-858-2408
This past 7 days there were 69 new listings in Abbotsford.
32 Residential Detached and 37 Attached (Condo's & Townhomes)

Residential Detached Listings:
Priced Below $700,000 - https://goo.gl/wMQkVX
$700,001 to $800,000 - https://goo.gl/iUHJD8
$800,001 to $900,000 - https://goo.gl/CnEAvN
$900,001 to $1,000,000 - https://goo.gl/cTT4yn
$1,000,001 to $1,500,000 - https://goo.gl/SepACz
$1,500,001 to $2,000,000 - https://goo.gl/5r7yZY
$2,000,000 and up - https://goo.gl/SRRYPC
Detached Foreclosures (from Hope to Whistler) - https://goo.gl/F2VP7E

Residential Condo's / Townhomes:
Below $250,000 - https://goo.gl/EBci9g
$250,001 to $400,000 - https://goo.gl/NBMJkK
$400,001 to $500,000 - https://goo.gl/QmN6Ms
$500,001 and up - https://goo.gl/7nAhSH
Foreclosures (from Hope to Whistler) - none this week.
I'll be back next week to report all of the new listings.


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What is a pre-sale?

Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms.

Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public.

If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices.

The question is, how do you get the invitation to buy a pre-sale?
In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast.

Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more.

A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well.

If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects.
Kind regards,
Tibor Bogdan
Century 21 Creekside Realty Ltd.
45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9
cell: 604-855-2521
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