Calgary has a very rich economy that is showing signs of strong growth and development that is centered on several major industries such as oil, agriculture, tourism, and technology. Hailed as one of Canada’s fastest growing cities, Calgary has a population of almost 1.5 million people and also claims average taxes and crime rates that are much lower than the national average. Calgary serves as the hub of the fifth largest Census Metropolitan Area in all of Canada. With a growing market for home sales, the city is among the best places to invest in Canada and is projected to remain in the top bracket for several years to come as the market continues to grow.
The Calgary Housing Market
Calgary’s housing market has been seeing major growth over the past few years and it is not showing any signs of significant slowing either. The low interest rate has gone a long way in keeping the housing market alive and has been very influential in fuelling the retail buyer market. The average residential home prices in the first quarter of 2012 averaged $402,455, which was a 1% increase from the $398,558 average back in 2011. Calgary’s housing starts more than doubled with a total of 1,069 units in 2012 compared to 403 units in the 2011. Overall, Calgary’s housing market has been going strong and it has made it easier than ever to find the best mortgage rates Calgary.
Calgary Mortgage Brokers
Finding a Calgary mortgage broker is a very important task because you want to find someone who can help you navigate the waters of mortgage jargon and work through the red tape for you. Finding the best rates can be easier with the help of a skilled broker who has a solid understanding of the local market. They will be able to assist you with things such as rate negotiations and paperwork to help you get the best mortgage rate that the Calgary area has to offer. Calgary mortgage rates have been amazingly low in recent years and they are expected to remain low, although there is some chance of a slow climb back to a moderate rate within the next five to ten years. But now is the time to find the lowest mortgage rates Calgary can offer .
Mortgage Rates- How to Find the Best Rates in Calgary
When you are in the process of searching for mortgage rates in Calgary there are many questions you need to be asking and answering before you ever settle on an offer and sign any papers:
How much can and should I put down?
In most cases, a lower down payment means you will end up with a higher interest rate as well as a higher loan amount. While it is usually recommended that the minimal down payment made is at least 20 % of the purchase price down, some lenders suggest only 5-10% or even 0%. A word of caution- lower down payments means higher interest rates and larger loan amounts, and it also means you may have to pay for mortgage insurance. Put down as much as you can, while still maintaining enough of a savings cushion to weather any emergencies or drop in income. The most important thing to remember about the down payment is that it should be enough to help you make payments easier to manage but not so much that it puts a huge stress on your day to day living and savings.
What else should I be on the lookout for?
Each lender will have different things they look for when approving or denying loans and they have different requirement for their borrowers. Remember, the bank needs to protect its investment. Some lenders will insist that the borrower have some sort of mortgage insurance, which will help protect the loan amount in the event you default on the mortgage payments. Be sure you understand each lender’s terms before committing to a mortgage loan.
Now that you know what you should be considering when comparing mortgages, keep the following tips in mind as you’re shopping around:
- Don’t use only the lender list provided by your realtor. Comparison-shop and look around for other lenders that might be willing to offer you the loan.
- Search within a 14-day window. Mortgage rate can change a lot week to week so it is helpful to look only within a given period of time-additionally, it also can damage your credit score if you search for longer than a 2 week period.
- Good-faith estimate can help you compare costs. Every lender will give a good faith estimate for you to use as you compare other rates and this quote is usually good for a set period of time determined by the lender.
- Don’t forget the credit unions. Credit unions are not-for-profit lending institutions that often have lower rates and fees than for-profit banks.
Should I get a fixed or adjustable rate mortgage?
Mortgages generally come in two flavors: fixed or adjustable rates for mortgage rates in Calgary, Alberta. Fixed rate mortgages lock the borrower into a consistent interest rate that the homeowner will pay over the course of the loan. This means that the part of your mortgage payment that goes toward principal and interest remains constant throughout the loan term, though insurance, taxes and other costs may fluctuate.
The interest charged on an adjustable rate mortgage (ARM) does fluctuate over the life of the loan. You usually begin with an introductory period of ten, seven, five or even one year, where your rate is locked in. Many people are attracted to ARMs because they usually offer lower introductory rates, but consider whether or not you’re comfortable with the possibility of your monthly mortgage payments going up substantially in the future.
Making the Process Easier
There are several things you can do to help make the process of searching for, finding, and closing on a loan for a mortgage easier and less stressful for you and your family.
Get several quotes when you are searching and even if you think you have found the lender and the rerate that is best, keep looking to make sure you are not missing out. Interest rates fluctuate constantly even within the same lending organization. For example, some lenders may offer special rates or deals for a limited time in order to generate more loan activity. Sometimes a credit union or lender will offer special rates, options, or programs to make people more interested in their loans. These are the types of things you need to look for as you search for the lenders for your mortgage.
Decide when you want to close. When you are searching for a mortgage loan there is something called a lock in that will determine how long your quoted rate is good for. The length of your lock-in period will impact your mortgage rate. This is why you should discuss this aspect of the loan with lender before you make any official agreements. Make sure you tell the lender when you expect the closing to be, because you want to lock in the interest rate for the right length of time. If you need a 90-day loan lock, your interest rate might be higher than if you needed only a 60-day loan lock. So be sure to keep this in mind as you shop around.
Private Mortgage Insurance is something else you might have to consider. When you buy a house the amount you put down is considered the equity (or stake) you have in the house. If you do not have a large down payment, you won’t have much equity in the house, which lenders consider a higher risk. If this is the case for you and your loan situation you will likely be required to get some sort of private mortgage insurance which helps the lender have the guarantee that they will get their money back if you default on the loan. The lenders are taking a risk with giving you money so they will want to have as much protection as possible. If you yourself cannot give them that assurance they will often require you to get extra coverage- in the form of private mortgage insurance.
Current mortgage rates in Calgary are looking good and are still holding at averages much lower than the rest of the nation. There has been a great deal of research and study done on the Canadian house market and there are some surprising things that have been found:
In November 30, 2011: Results from a Reuters poll indicated that the Bank of Canada would not increase interest rates until the 4th quarter of 2012 and that was pretty much what happened-and even then the increase was not very much at all.
The 4th quarter 2012 view was much stronger than many primary dealers and saw less change in rates when compared to other mortgage and loan dealers in the Calgary area as well as Canada as a whole.
According to Dawn Dejardins, assistant chief economist at the Royal Bank of Canada, even though there was a great deal of uncertainty in the global economy in recent years and even now, Canada’s economy still remains in relatively good standing and is poised for another stellar year.
Understanding Mortgage and Your Credit
Whether you are dealing with purchases in a purely Canadian mindset or if you are delving into both Canadian and US home and property purchases, it can be helpful to understand how mortgages can impact your credit scores and how lenders may view you when you approach them for the mortgage loan. In most cases, you need good credit to get a good loan but even after the loan has been approved, the details of that mortgage loan can have a huge impact on your future credit score. Here is how:
When a Mortgage Helps
Aside from your credit utilization, creditors like to see that you have a variety of credit types on your report. It is best if you have both revolving credit and installment loans. A mortgage is considered to be an installment loan where a credit card is not. Most people have several sources of revolving credit from their credit cards, but most people only have one or two installment loans- usually a car payment and a mortgage. Having the mortgage gives you a better mix of credit types, and that can help to boost your score. Having a mortgage can also help if you make all of your payments on time and show that you are responsible with the loan. Every on time payment helps improve your credit score and makes lenders look on you a little more favorably.
When a Mortgage Hurts
On the flip side, there are a few instances where having a mortgage could hurt your credit score and ranking. When you first open up the account and take out the mortgage loan there may be slight drop in your score. This is normal and a dips like this happen any time you first take out a loan or apply for a new credit card. Once you have shown you are responsible with the payment your score will start to climb up to higher than it was before. You can also see negative marks if you have to keep adjusting the terms of the mortgage such as a short sale, loan modification, or having to get credit counseling. Another way a mortgage can hurt you and your credit is if you miss payments, are always late with payments, or default totally on the loan and have your home foreclosed. These all will severely hurt your score and cause it drop drastically.
Bad Credit Home Loans
One option that is available to help you with your mortgage payments is to look into applying for a bad credit home loan. It can take 24 months or longer to move your credit score from a poor score to a good score. If you don’t want to wait that long, you can look into getting a bad credit loan from the bank or lender. The down side to these types of loans is that they charge very high interest rates so it is important to consider how much that will increase your monthly payments. If you have bad credit there is only so much you can do to negotiate the terms and interest on the mortgage loan because you do not have the good track records that give you the footing you need. Your best bet would be to either try and wait till your scores improve or pay the interest and once your scores improve some try and negotiate even a slight drop in your interest.
Final Thoughts on Mortgage Loans, Rates, and Payments
Calgary has a very rich economy that is showing signs of strong growth and development that is centered on several major industries such as oil, agriculture, tourism, and technology. Calgary’s housing market has been seeing major growth over the past few years and it is not showing any signs of significant slowing either. The low interest rate has gone a long way in keeping the housing market alive and has been very influential in fuelling the retail buyer market. Finding the best rates can be easier with the help of a skilled broker who has a solid understanding of the local market. They will be able to assist you with things such as rate negotiations and paperwork to help you get the best mortgage rate that the Calgary area has to offer. This is where the skilled and highly trained professionals at MyMortgageBroker.com can assist you in finding the best property at the best rate. Why go at it alone? Make sure you have someone on your side who knows the ins and outs of Calgary real estate and mortgages. There are several things you can do to help make the process of searching for, finding, and closing on a loan for a mortgage easier and less stressful for you and your family- and one of the best is to contact MyMortgageBroker.com today. With the right tools and the right start to your search you can find the rates and loans that work best for you and your unique needs and situation.