Mortgage

[koop]

I just talked to a loans officer at a bank and he suggested that instead of getting a 5yr VRM I should just take a one year fixed rate closed mortgage. His reason was that in one year they might be able to give sub-prime rate mortgages again. The rate for a one year is also better then the VRM by .1%.

Does this sound like it would be a good plan?

 

[invst4profit]

I would stay with the variable and seriously question his motivation in trying to sell you a fixed rate based on possible sub prime in the future.
Stay away from the bank and go to a mortgage broker. You will likely find a better deal on rates.

 

[PaulPoulsen]

QUOTE (koop @ Jul 21 2009, 12:01 PM) I just talked to a loans officer at a bank and he suggested that instead of getting a 5yr VRM I should just take a one year fixed rate closed mortgage. His reason was that in one year they might be able to give sub-prime rate mortgages again. The rate for a one year is also better then the VRM by .1%.

Does this sound like it would be a good plan?

This is what we did when it was time to re-up the mortgage on our personal residence. Our broker gave us the same advice - take a very attractive fixed rate product for a short-term (1 year) and wait for a better product when the mortgage is due again in 12 months.

And I agree with Greg on the mortgage broker. There`s nothing wrong with dealing with the bank but there`s a good chance a broker will get you a better product.

 

[RobMacdonald]

It`s not a bad alternative. If your plan is to lock in to a fixed term or wait for a better rates on VRM`s, then it`s a good place to be. Be catuious about the interest penalty if you want to convert to a VRM before the end of the term.

There are short term fixed products in the market that allow you to transfer to a longer term fixed or VRM withouth penatly. And yes, it`s a good idea to shop around to make sure you have the best product and rate.

 

[MikeMcCrae]

In my mind right now there are two ways to look at it. Short or long (hows that for clarity)
Go variable if you like the short term rates and look at the 10 year products if you are security conscious. My concern is where rates are going to be in 4 or 5 years.

 

[koop]

I do have a mortgage broker who is finding me my mortgage. I had just called the bank because on their online mortgage calculator it posted their VRM`s at prime, my mortgage broker didn`t have anything that good, and it turns out the online calculator was wrong.

When I told my mortgage broker what I wanted to do he did tell me about the product that I could switch from my fixed mortgage to a variable. And he did tell me that the interest rate on the one year fixed he found me was .1% better then the banks.

 

[devid69]

Thanks for your post. I think this is very useful for us.