A variable-rate mortgage is a mortgage where interest rates fluctuate with the prime lending rate. (Prime is currently at 2.25%) Most variable rate mortgages can be locked into a fixed rate mortgage without penalty providing you lock in for at least the remainder of the term. Historically, variable-rate mortgages have tended to cost less than fixed-rate mortgages when interest rates are fairly stable. When the rates change, your payment may or may not change depending on the lender. There are three main types of variable rate mortgages available in the marketplace today;

Deep Discount - usually there is a substaintial discount off of the prime rate for the full term

Teaser Rate - the lender offers you a very low rate for the first 3-9 months of the mortgage. After the initial period specified by the lender, the rate changes to a "prime minus product," this ranges from prime minus 0.25% to 0.40%

Cash Back - the lender offers you a percentage of the mortgage amount as cash back.

Here are some questions you should ask yourself if you want to take a variable rate mortgage:

1) Are you going to stay in your new home for the term of the mortgage? Most of the variable rate mortgages have a fixed term of 3 to 6 years

2) How risk-tolerant are you?

If you bite your nails with every rate increase, then this product isn't for you!

3) What do you think interest rates are going to do?

If you feel the rates are going up, then you may want to lock in an interest rate.

The bottom line on variable mortgages: If the rates are staying the same or decreasing, these types of mortgages can be a good deal.

However, if the interest rates are on the increase, you may be signing up for a potentially higher interest rate than you bargained for.

Protecting Your Mortgage: Looking at your Insurance Options

The purchase of a home is a major financial commitment, and how best to safeguard your investment is something you have to consider. There is a range of insurance products available to make sure that your home and your family's lifestyle are protected. But before you can make an informed choice, it is important to take the time to look at all the possiblities. Here's a quick sketch of various forms of insurance products you will want to consider.

Mortgage Insurance is required by law to insure lenders against default on mortgages with a loan value ratio of greater than 80%.

Homeowner's Insurance provides coverage against losses on the physical home and its contents, along with personal liability coverage.

Mortgage Life Insurance makes sure that the outstanding mortgage balance will be paid off in the event of your death.

Mortgage Critical Illness Insurance makes sure the outstanding mortgage balance will be paid off in the event of a covered illness such as heart attack, stroke or life threatening cancer.

Mortgage Disability Insurance insures that monthly mortgage payments are covered in the event of employment interuption due to a covered sickness or injury.

In the case of life, critical illness, or disability insurance, in deciding which products are appropriate for you, it is helpful to ask questions, such as:

- Is the insurance portable? With insurance that's portable, there's no need to re-apply for coverage if you happen to switch lenders, or move the mortgage to a new home.

- Can you cover more than two individuals with the same policy at a reduced cost? This is important when guarantors are required for you to qualify for the mortgage.

Your financial picture changes significantly when you get a new mortgage. This creates a need for insurance coverage to protect your new investment and your family's future. In addition to providing a wealth of information on all aspects of obtaining the mortgage that best suit's your individual needs, The Gibbard Hoffart Group can also help you obtain the appropriate mortgage-related insurance solutions.
 
 
How to check your credit rating and WHY everyone should!

Everyone who's ever borrowed money to buy a car or a house, or applied for a credit card or any other personal loan has a credit file. Almost every Canadian has a credit file, and most of us how no idea what's in them.

A credit report contains information about every loan you've taken out in the last six years, whether you regularly pay on time, how much you owe, what your credit limit is on each account, and a list of authroized credit grantors who have accessed your file. Each of the accounts includes a notation that includes a letter and a number.

Any company that's thinking of granting you credit or providing you with a service that involves you receiving something before you pay for it (like phone services or rental apartment) can get a copy of your credit report. Needless to say, they want to see lots of "Paid as agreed" notations in your file. And your credit report has a long history. Information remains on file for six years.

A credit score (also called a FICO score) is not part of a regular credit report. Basically, it's a mathematical formula that translates the date in a credit report into a three-digit number between 300 and 900 that lenders use to determine your credit rating. The higher your credit score the more likely you are to be approved for loans and receive favorable rates.

Equifax encourage all consumers to review their credit report on a regular basis. By doing this, you can ensure that your report contains information that accurately reflects your credit history.

For more information please visit www.equifax.com