[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”3.0.47″ custom_padding=”14px|0px|54px|0px|false|false”][et_pb_row admin_label=”row” _builder_version=”3.0.48″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0|0px|27px|0px|false|false”][et_pb_column type=”4_4″ _builder_version=”3.0.47″][et_pb_text admin_label=”Text” _builder_version=”3.0.74″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”]<\/p>\n
By Jennifer Lynn Walker<\/p>\n
Clients of mine have had their mortgage for sixteen months with Industrial Alliance. They have to sell their house. They looked into breaking their mortgage which is at $243K @ 5.66%, with 284 remaining months left to pay, becoming due Sept 2012. They got the news this week that it would cost them $11,000 to cancel their mortgage.What??? You might be thinking\u2026they must have had a special mortgage or the bank made a mistake. Nope. They are regular folks with a three bedroom bungalow. After buying and selling a few homes, this was their third mortgage with Industrial Alliance.<\/p>\n
When I posted this info on Facebook, a neighbour responded by saying \u201cI know! I was trying to get a better rate and it would have cost me $7000 to break my mortgage only to get 1\/4% better. No thanks!!!\u201d<\/p>\n
After talking with my client, he told me that he was told that this is a new bank policy and that a lot of other banks are now getting on board. Have you heard of this? I haven\u2019t. Even after reading the fine print of his mortgage agreement, it still wasn\u2019t clear why it was so high. There wasn\u2019t a formula included in the agreement and when he called the bank and after speaking to 3 people, none of them could explain it to him properly. He said that they all acted really strange on the phone, like they knew that this was immorally unjustifiably incredibly high.<\/p>\n
He was told that if he broke his mortgage three months ago, his fees would have only been about $3600. Apparently the formula includes the interest rate. Where you really get penalized is when the interest rate that you have locked into is lower than prime.<\/p>\n
How could this happen? Why wasn\u2019t this explained to him since he\u2019s been doing so much business with them\u2026and why wasn\u2019t it grandfathered in? I don\u2019t have the answers and so far, neither does he or anyone at the bank for that matter.<\/p>\n
My job is to help facilitate buying\/selling a home for my clients. It is suppose to be the most important money decision of our lives, so we are told. I find the product and facilitate the sale, making sure all legalities have been met. Legally I have to comb through the offer and make sure that my clients understand 100% of it. I have never, ever heard of a banker or mortgage broker doing that with any of my clients.<\/p>\n
The banks have the most important job. They are the one\u2019s lending the money. With what I do, if my clients aren\u2019t satisfied, there are a lot of avenues to take for legal recourse; organizations in place to protect the buyer and seller. What do you have with a bank if you aren\u2019t satisfied? What can my clients do? Not pay it? Take the bank to court? I\u2019m not sure, however am interested in knowing.<\/p>\n
This is part one of the story. As time goes on, and after much investigation part two will flourish. In the meantime, READ THE FINE PRINT. Have your mortgage broker and\/or banker read through your whole agreement with you so you understand it 100%. Ask questions and know the formula if you need to cancel your mortgage before you sign, so you are well prepared for the unexpected.<\/p>\n
<\/a><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row use_custom_gutter=”on” gutter_width=”1″ custom_padding=”0|0px|29px|0px|false|false” _builder_version=”3.3.1″][et_pb_column type=”1_2″ _builder_version=”3.0.47″][et_pb_image src=”https:\/\/www.montreal-realestate.ca\/english\/wp-content\/uploads\/2018\/09\/Jennifer-Lynn-Walker-Image.png” _builder_version=”3.17″ max_width=”66%” custom_margin=”15px||”][\/et_pb_image][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”3.0.47″][et_pb_text _builder_version=”3.8″ text_font=”||||||||” text_text_color=”#000000″ header_font=”|600|||||||” header_text_color=”#000000″ header_font_size=”25px” header_4_font=”Alegreya||on||||||” header_4_text_color=”#aaaaaa” header_4_font_size=”25px” header_5_font=”||||||||” header_5_text_color=”#e02b20″ header_6_font=”||||||||” header_6_text_color=”#e02b20″ custom_margin=”45px|||” animation_style=”slide” animation_delay=”400ms” animation_starting_opacity=”100%”]<\/p>\n Jennifer Lynn Walker has specialized in buying and selling both residential and multiplex properties since 2003. She’s built a strong network of specialist, to give her clients a seamless experience throughout the real estate journey. Founder of\u00a0Montreal Real Estate Investor\u2019s Group, and Jolly Green Homes.\u00a0\u00a0<\/em>How can I help you today?<\/a><\/strong><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.19.18″][et_pb_column type=”4_4″ _builder_version=”3.19.18″][et_pb_text _builder_version=”3.19.18″]<\/p>\n PART II OF THE STORY<\/strong><\/p>\n So after talking with a mortgage broker, nothing has changed. These supposedly new policies have been around for over 25 years and are part of our federal law. Why my client was told all this hooplah about new policies and why couldn\u2019t anyone answer him properly, I don\u2019t know. What I do know is that unless the rates go up in the next two months, he will be paying the $11,000.<\/p>\n To break a mortgage there are two formulas the banks use and whichever is higher, is the one you will have to pay. So because the interest rates are so low, just about everyone in the past 3-5 years who are looking at breaking their mortgage will probably be paying with formula #2, unless of course, you are getting near the end of your term. The people who have only had their mortgage for a short period of time are the ones who will be paying hefty fines. So I learned something new today. Hope you did too.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" By Jennifer Lynn Walker Clients of mine have had their mortgage for sixteen months with Industrial Alliance. They have to sell their house. They looked into breaking their mortgage which is at $243K @ 5.66%, with 284 remaining months left to pay, becoming due Sept 2012. They got the news this week that it would […]<\/p>\n","protected":false},"author":2,"featured_media":8858,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"Clients of mine have had their mortgage for sixteen months with Industrial Alliance. They have to sell their house. They looked into breaking their mortgage which is at $243K @ 5.66%, with 284 remaining months left to pay, becoming due Sept 2012. They got the news this week that it would cost them $11,000 to cancel their mortgage.What??? You might be thinking\u2026they must have had a special mortgage or the bank made a mistake. Nope. They are regular folks with a three bedroom bungalow. After buying and selling a few homes, this was their third mortgage with Industrial Alliance.\r\n\r\nWhen I posted this info on Facebook, a neighbour responded by saying \u201cI know! I was trying to get a better rate and it would have cost me $7000 to break my mortgage only to get 1\/4% better. No thanks!!!\u201d\r\n\r\nAfter talking with my client, he told me that he was told that this is a new bank policy and that a lot of other banks are now getting on board. Have you heard of this? I haven\u2019t. Even after reading the fine print of his mortgage agreement, it still wasn\u2019t clear why it was so high. There wasn\u2019t a formula included in the agreement and when he called the bank and after speaking to 3 people, none of them could explain it to him properly. He said that they all acted really strange on the phone, like they knew that this was immorally unjustifiably incredibly high.\r\n\r\nHe was told that if he broke his mortgage three months ago, his fees would have only been about $3600. Apparently the formula includes the interest rate. Where you really get penalized is when the interest rate that you have locked into is lower then prime.\r\n\r\nHow could this happen? Why wasn\u2019t this explained to him since he\u2019s been doing so much business with them\u2026and why wasn\u2019t it grandfathered in? I don\u2019t have the answers and so far, neither does he or anyone at the bank for that matter.\r\n\r\nMy job is to help facilitate buying\/selling a home for my clients. It is suppose to be the most important money decision of our lives, so we are told. I find the product and facilitate the sale, making sure all legalities have been met. Legally I have to comb through the offer and make sure that my clients understand 100% of it. I have never, ever heard of a banker or mortgage broker doing that with any of my clients.\r\n\r\nThe banks have the most important job. They are the one\u2019s lending the money. With what I do, if my clients aren\u2019t satisfied, there are a lot of avenues to take for legal recourse; organizations in place to protect the buyer and seller. What do you have with a bank if you aren\u2019t satisfied? What can my clients do? Not pay it? Take the bank to court? I\u2019m not sure, however am interested in knowing.\r\n\r\nThis is part one of the story. As time goes on, and after much investigation part two will flourish. In the meantime, READ THE FINE PRINT. Have your mortgage broker and\/or banker read through your whole agreement with you so you understand it 100%. Ask questions and know the formula if you need to cancel your mortgage before you sign, so you are well prepared for the unexpected.\r\n\r\nPART II OF THE STORY<\/strong>\r\n\r\nSo after talking with a mortgage broker, nothing has changed. These supposedly new policies have been around for over 25 years and are part of our federal law. Why my client was told all this hooplah about new policies and why couldn\u2019t anyone answer him properly, I don\u2019t know. What I do know is that unless the rates go up in the next two months, he will be paying the $11,000.\r\n\r\nTo break a mortgage there are two formulas the banks use and whichever is higher, is the one you will have to pay.\r\n#1. <\/strong> Three months interest\r\nor\r\n#2. <\/strong> Posted rate minus your rate times the number of days left on your term. Posted rate means without any discount. Walking into a bank and not negotiating the rate (apparently this is where the banks really make their money).\r\n\r\nSo because the interest rates are so low, just about everyone in the past 3-5 years who are looking at breaking their mortgage will probably be paying with formula #2, unless of course, you are getting near the end of your term. The people who have only had their mortgage for a short period of time are the ones who will be paying hefty fines. So I learned something new today. Hope you did too.\r\n\r\n\r\nSend Page To a Friend<\/u><\/a>\r\n\r\n\r\nI added this article because I love real estate and educating people on the matter. If you would you like me to work for you, call me 514-402-8444<\/a> or EMAIL ME<\/u><\/a>!\r\n\r\nTo search properties go here www.Montreal-Properties.com <\/a>","_et_gb_content_width":"","sfsi_plus_gutenberg_text_before_share":"","sfsi_plus_gutenberg_show_text_before_share":"","sfsi_plus_gutenberg_icon_type":"","sfsi_plus_gutenberg_icon_alignemt":"","sfsi_plus_gutenburg_max_per_row":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgages-finances"],"yoast_head":"\nMEET JENN<\/h1>\n
Real Estate Broker & Educator<\/h4>\n
#1. <\/strong> Three months interest
or
#2. <\/strong> Posted rate minus your rate times the number of days left on your term. Posted rate means without any discount. Walking into a bank and not negotiating the rate (apparently this is where the banks really make their money).<\/p>\n