Mortgage Interest Rate Changes

Both variable and fixed mortgage rates have increased recently.

Variable Rates:

• the prime rate has stayed the same at 3.00% and is likely to remain as is for the next year.
• however, the "prime minus" has reduced from an average of minus 0.75% to minus 0.20% or less resulting in a variable rate increase, up from 2.25% to 2.80% or higher.

Fixed Rates:

• fixed rates have also increased a little.
• however, fixed rates are still at a historic low

Should your clients go with a variable rate or a fixed rate?

• the current difference in rate between variable and fixed rates is about 0.64% .
• previously the difference was about 1.25%
• with the fixed rate you know your rate for the next 5 years and fixed rates are not likely to go down much further.
• with the variable rate the prime could go up in the next year or so and although you can convert to fixed at anytime without penalty fixed rates will have gone up when you decide to convert or you wouldn't have decided to convert.
• so the answer is there is very little difference whether you take variable or fixed rates right now.  The variable rate will save you about $1,600 per year ($133.33 per month) on a $250,000 mortgage "if" the prime rate doesn't go up early in the 5 year term.

Best regards,

Ritesh JoshiYour Next Door Realtor

www.riteshtherealtor.com

647-281-3424

Market Watch October 2011

Make Your House Winter Ready

It's again Time To Clock Back to Standard Time, This Saturday Nov 5th Don't Forget to Change the time.

With the clock back make your house winter ready.

• Shut-off water valves - Locate water valves for backyard and garage (usually in the basement) and turn off, open outside valve and drain them. This will protect you pipe from bursting.
• Add weatherstripping to doors and windows. Don't let your heat escape through small cracks and gaps-seal drafty spaces using weatherstripping or caulk. Here are more helpful tips on sealing up air leaks in your home.
• Check your insulation. If you're in an older home, you may want to supplement the insulation that's already there, or add insulation to uninsulated walls. This will help keep heat in and moisture out.
• Clean your dryer vent. Inside and out. If you have a gas dryer, unplug it and shut off the gas supply at the appliance shut-off valve. Unhook the tube that leads to the vent and clean out as much lint as you can. If you have a wet/dry vac, tackle your exterior vent as well.
• Inspect your roof and chimney, and do any repairs that are needed. Look for cracked shingles, crumbling masonry and damaged or missing flashing. While you're looking at your chimney, take a look at your fireplace as well—make sure the damper opens and closes easily, and get the chimney cleaned if you haven't already this year.

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Appraisals Vs. Home Inspections

Appraisals Vs. Home Inspections

Appraisals Vs. Home Inspections – Do You Know the Difference? 

A home is one of life's most important purchases.  Before committing to a purchase it makes sense to learn as much as possible about any property you wish to acquire.  Understanding the important differences between an appraisal and a home inspection will help you to obtain detailed information about the home's value and condition.  

An Appraisal 
An appraisal allows the lending institution to determine if the property being purchased is suitable as security for a mortgage. For conventional mortgages, a lender will in most cases require that a professional third party assess the property to ascertain its current market value.  In the case of a "high-ratio" mortgage (with a down payment of less than 20 per cent), the mortgage insurer will go through its own internal appraisal process.  In particular, lenders and insurers are concerned that the property (in terms of its age, condition, and remaining economic life) constitutes a good match with the borrower and their ability to repay the mortgage.  An appraisal does not usually include a detailed property inspection.

A Home Inspection 
A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property.  A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (for example the roof, structural, heating, plumbing and electrical systems).  While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential homebuyer whether the building and its systems are in sound working order.  If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated costs and when  these repairs will need to be completed.  

Ritesh Joshi
Your Next Door Realtor

www.riteshtherealtor.com

647-281-3424