Many times in the mortgage industry we hear our clients say “we are waiting on interest rates to drop before we buy”. While this can be a good strategy that can pay off there may be other variables to consider before deciding to wait.
In today’s markets we have some very low and attractive rates, however CMHC recently announced that as of June 1, 2015 they will be increasing their mortgage loan insurance premiums by about 15%. With this change in place if rates were to drop an improbable .10% over the next couple months you would actually save yourself nothing over a 5 year term. In fact when considering the increase in CMHC premium, waiting could potentially cost you an additional $57.62 over a 5 year term. With the knowledge that CMHC premiums are going up we know that waiting for the chance for rates to drop even as much as .10% will actually cost you money instead of saving you money. Granted $57.00 isn’t a lot of money but this example demonstrates that waiting may not always give you what you are looking for.
Most of our clients want the best deal when they are shopping for their mortgage but as demonstrated previously the best rate doesn’t always equal the best deal. There are many variables to consider. We are mortgage experts and keep on top of the ever changing market. If you are thinking of buying a home and not sure if you should be waiting or not come see us. We can help go over all the costs and options to get you the most out of your money!
Jessica Bartolf ~ Mortgage Alliance Advance Mortgage