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http://thejoeteam.com/pdfMarketWatch/2011_12.pdf

January 25, 2012 — SG

It’s January 25, 2012… that’s the original deadline date issued by BMO for their NO FRILLs 2.99% 5 year fixed rate mortgage.   Since announcing that 2.99% rate, BMO has reportedly been flooded with calls and applications.  And rightfully so.  That’s the lowest advertised 5 yr fixed rate in history.  (we need to say thank you to BMO… they woke up the competition and the competition answered.. we have seen competitive offers from the non-bank lenders… no restrictions or limitations…   This is great news for the consumer.)

This product has also drawn some criticism…There was an interesting articles asking if this product was too good to be true….  click here to see what The Toronto Star thinks.

Let’s look at the restrictions and limitations more closely…    If you are 100% certain about the next 5 years in your life, your job, your health, your family’s health, then this may be a great product for you…. But if you look at the stats, we, as Canadians, on average refinance or change mortgages every 3 years…  With that in mind, the product can be very costly for the unsuspecting borrower….read on and I’ll explain…

I’m not too concerned with the limited prepayment privileges.   The biggest potential risk to borrowers is the inability to refinance outside BMO should they experience some financial problems in the next 5 years.   If a borrower runs into financial problems and needs to take the mortgage elsewhere, because they won’t qualify for a BMO refinance,  they can’t do it.  The mortgage can only be paid out if the house is sold…

An an even bigger problem is the BIG SIX penalty calculation…. let’s say you can somehow refinance in 2 or 3 years with BMO, or you do sell the house and are not porting the mortgage… well, now you must deal with a penalty calculation that makes you pay for the original discount you received at the time of the original mortgage….   And LOOK OUT…This is where we have seen penalties of 6, 9, 12, 14 and even 16 months worth of interest being charged by the Banks to get out of a mortgage..(click here to see how banks calculate their penalties).  (hey, Federal Government, didn’t you promise to standardize mortgage penalty calculation 2 years ago??… when is that going to happen?))

And if you need more money added to your mortgage, what assurance will you have that BMO or any other BIG SIX bank, will give you a good rate or a discount on those new monies?   None… they certainly won’t have to, given your penalty to exit would be higher than other non-bank lenders…    This subject is not talked about very much by the media or by the banks… We will be commenting on this further in future posts….  (hey, how about CIBC and that class action lawsuit over mortgage penalty charges??… I’ll be making some comments on this soon).

Here’s some advice… seek out Lenders that have better penalty calculations... they are out there… they just aren’t as obvious as the Big Six Banks… talk to a mortgage broker and get some comparisons…  you might be surprised to know that competitive rates exist without having to give up your future options…

http://canadamortgagenews.ca/2012/01/25/bmo-2-99-no-frills-mortgage-needs-another-look/

Joe, my husband and I are at crossroads. He’s looking at buying further away to get more home and I like to stay closer to the core, with the same money getting half the home. What do you suggest?

Maria

We are faced with this dilemma each and every day. In our economy we all want bigger and better but where do we draw the line? With homes there is a lot more to be considered – a) distance to work b) distance to family c) the economics of distance.

For example: Time- will you be home in time for soccer, little league etc? Car- depreciation, mileage, cost of fuel. More distance more money, staying closer to the core you are getting less home but in the long term you might be better off having greater appreciation in value and savings.

I urge you to call my office and set up an appointment because this is so personal and I need to know a lot more before I can give you direction.

Joseph Cartaginese

On Wednesday June 29th, 2011 at Bellvue Manor in Vaughan, Joseph Cartaginese of The Joe Team presented The Joe Team Humanitarian Award to Isreal Anthony Ogbogu.

Joseph Cartaginese also presented The Joe Team Humanitarian Award last year to Daniel Barrett.

Q: Joe I noticed that you sell a lot of Power of Sale properties and in your ads you say “Get on the List” What List?

Josh

Dear Josh,

There have been changes in Real Estate; you now have the opportunity of hiring a realtor to represent your best interests. Technically under the Real Estate Rules all buyers before viewing homes should be under a buyer contract, (for more information go to        http://www.torontorealestateboard.com/buying/buying_&_selling/buyer_agency.htm

Therefore if you decide to hire a realtor, and as I always say, before deciding on a Realtor to represent you interview 2 or 3 because all realtors are not the same. If you interview us and you decide to work with us then at that point you would be entered into our computerized data base and we will send you daily emails of all the homes that match what you’re looking for. What we will send you will have the address, price and all available photos, all the information just like we get as Realtors. It will update you daily by sending out only what is new or had a price change the instant it becomes available. Oh, and our clients also get access to power of sale, estate sales and other great deals. Josh, with the power of sales if you are in our computerized data base you will be notified as soon as we know.

Joseph Cartaginese

We want to start looking at buying our first home. Is it a good idea to get a mortgage pre-approval?

Absolutely, for the simple reason that not all mortgage pre-approvals are the same. This task is defi nitely one for the professionals. The banks can only pre-approve you on their own products and programs, whereas a Mortgage broker will have an opportunity to have several lenders bid and compete for your mortgage business. Prior to starting your search for a home, it is a must to obtain a pre-approval. A good realtor with your mortgage preapproval information will be able to guide you and negotiate a better purchase for you. This will ensure that you will not be over or under buying your first home.

I am thinking of buying a townhouse. What is better, a freehold or condominium?
Submitted by: Jamie Carruthers

Jamie, there are advantages and disadvantages to both. On the one hand, if you don’t like exterior maintenance, such as maintaining windows, roofs or driveways, then the Condominium is a good way to go. However, a condominium is not free because there are monthly costs associated with it.

With a freehold townhouse, you have no monthly payment, but you are responsible for all the outdoor maintenance. This also means that you have no control over what colour of shingles your neighbour applies or the colour of their front door.

As I have mentioned, your choice is personal to your preference. As an aside, keep in mind that with a condominium townhouse, you will need a Status Certificate from the Condominium Corporation which will disclose all the rules (by-laws) and the financial position of the corporation.

I hope this has helped. Good luck 

Joseph Cartaginese

This is a common concern amongst buyers. It is important to understand that the Seller’s agent represents the Seller exclusively and it is his/her job to get the best possible offer for the Seller. The Seller’s agent is also legally obliged to tell the Seller anything known about you, the buyer, including how much more you might pay.

You must remember that the Buyer has a choice. A Buyer can interview agents and hire the one that he or she thinks will best represent him or her on the journey to buying a home.

As an added bonus, this service is free! So, why not elevate the level of representation you will receive and choose an agent in advance so that you will gain market knowledge? By the time it comes down to making an offer, you will be an informed Buyer and will be confident that you have not overpaid.

Joseph Cartaginese