Lowest Rate doesn't always mean BEST mortgage product

Wow! What a summer in Calgary so far. Calgary Stampede has come and gone...

and as a locally born Calgarian - I can say "thank god its over!" The highlight of my week was being invited to meet Kenny Chesney after his concert - that one will go down in my history books!

What's happening with Real Estate? Well, apparently there are a lot of things shaking. Sales are up and housing prices are slowly climbing back up. Good news, right? Well, if you are a first time buyer .. maybe not so much. It is still a buyers market, but with rates slowly creeping back up the mortgage market is a frenzy of competition.

Over the last few months I have lost a substantial number of loans to the banks, at the branch level. This is unprecedented... don't get me wrong, as mortgage professionals, we were accustomed to losing business to RBC, who has been notorious in the past for reducing their rates well beyond anything we can do, just to get the "deal".

What I see happening with the first time buyers and sometimes the move up buyers, is that banks and credit unions at the branch level are discounting the lowest discounted rates we can offer. What these buyers are not always aware of, is that these products are quite often a wolf in sheep's clothing. If you go to the branch to get a mortgage, be careful to ask these key points:

• What is my payout penalty if I sell my home, or refinance before the end of the term? All fixed rate mortgages should come with a penalty of 3 months interest or IRD, whichever is greater. Beware of mortgages that do not allow you to payout your mortgage early.

• What are the pre-payment policies with this mortgage? Most mortgages offered in Canada come with either a 15/15 or 20/20 pre-payment allowance. What this means is you are entitled to increase your monthly payments by up to 15 or 20% AND you can pay up to 15 or 20% of the ORIGINAL mortgage amount every calendar year. Beware of mortgages that do not allow this.

The lowest discounted rates out there, will sometimes exclude these very crucial policies. Therefore, not all the lowest rate products, are really the best products for you. If you want the best advice, service and turn around times, give me a call.

**I live for referrals, if you know anyone that may benefit from my free service, feel free to pass on my contact information!