The Secret to saving thousands from your bank may be easier than you may have thought. When you purchase a home, securing a low interest rate could save you $$$.
A rate hold is an agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage for a specified time period at the prevailing market interest rate. Find out how you can benefit today
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Timestamps below: 0:00 | Just getting started 0:22 | We are the Germyn Group 0:44 | Story-time with Darin 1:35 | Interest you pay to the banks 2:31 | Rate Holds? What are they 3:39 | Bank of Canada rates 4:02 | Process of how to start 4:42 |
More great videos on the topic:
Mortgage rates video: https://youtu.be/DhWKUMHL9w4
Mortgage from Brokers not Banks: https://youtu.be/1P7mT_hS8Fw
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About the Germyn Group: The Germyn Group consists of Darin Germyn, Personal Real Estate Corporation, and Adam Howsam. Two realtors located in the Fraser Valley looking to help our clients get it right, the first time, when buying or selling real estate. Darin has been in the real estate industry since 2007, and has had the luxury of helping over 500+ families in real estate. Darin was the former President of the Fraser Valley Real Estate Board in 2019, and top 1% in the FVREB for volume.
Darin has also been featured on News 1130, CKNW, CTV News, Global News, Business Vancouver, Real Estate Video Influencers, Three Best Rated, The Georgia Straight, Country 105 & Real Estate Magazine
So here's your problem.
You want to buy a home and are just
getting started and you are afraid there's
the possibility of an interest
rate hike coming from the banks.
Have you heard the rate hold
being offered by the bank?
What is it and why is it important?
Well, if you are a would-be home buyer,
a rate hold can be an advantageous tool
to make sure that you absolutely
win in getting the lowest
interest rate on your mortgage.
We are the Germyn group.
Be sure to like this video and subscribe.
So you do not miss out on any of our
videos on how you can make the most
of your buying or selling experience.
We are releasing new videos each week
and just like this one, you'll be
glad that you watched and subscribed.
We know you only have ONE chance
to either buy or sell your home.
So we are here to help you get it right.
So rate holds are critically important.
There's a story, one that I was told by a
senior realtor back when I first started.
And what that story was, was what are
the two most expensive things that most
people buy in their lifetimes?
This is a group of young Realtors who are
in a training program at the time.
So we all sort of looked around
at each other kind of confused.
And as you could guess,
most people knew number one was surely
the purchase of their first home.
But the second, of course,
was one that a lot of people
had guessed was maybe a car.
And the senior realtor kind of shook his
head and said, no, that's
certainly not what it is.
So what was it?
It was your mortgage.
Think about it,
when you take out a mortgage
on a property, especially in today's age,
where mortgages are so low because
of the rates, but also high
because of the property values.
Think of the amount of interest that you
pay to the banks over
the course of a mortgage.
The amount of interest you pay
to the banks is absolutely incredible.
And over the course of a lifetime
of that mortgage, whether it be 25,
30 years or even if you pay it down early,
the amount of money you
give to the bank is insane.
Here's a quick example.
One of the best 5 year fixed rates
on a 25 year mortgage right now is 1.9%,
which is historically low.
On a mortgage loan amount of $500,000,
over the course of 25 years,
you will pay the bank approximately
$127,000, and the number goes
up after your term expires.
If the rates increase over the 25 years
of your mortgage, a minor increase of only
a quarter percent takes your interest rate
up almost another $20,000, and a full 1%
increase, over $70,000 more expensive.
So you get it.
It's a ton of money,
and you know it's a necessary evil
because, of course,
you're getting a mortgage, but it really
matters what mortgage rates you pay.
So a rate hold is
something that the majority of lenders
will offer to would-be home buyers
that are purchasing a new
home who need a mortgage.
This is where the bank will guarantee you
the lowest rate, or today's rate
for anywhere between typically 90 to 120 days
120 days being usually the longest
rate hold available with most lenders.
Once you've created an application
with a mortgage broker,
whether it be online or with one directly,
they can submit it to an available lender
that offers a rate hold
on an interest rate for you.
What is great is that you want to take
advantage of all of this without
even having a property being attached
to it, because maybe you haven't even
found one yet or started looking.
Now, it's important to know that this rate
hold does not commit you to working
with a lender,
nor does it commit you to working with
the mortgage broker who submitted it.
And it does not hurt your chances
of receiving an approval down the road.
Assuming you and your mortgage broker
have not submitted multiple rateholds
and plan to use a 3rd
or maybe a 4th lender.
But the advantage of this is that we know
these ultra low interest rates will
not last or stay this low forever.
The bank of Canada has been very
forthcoming as of when this video was
filmed during the 4th wave of Covid-19,
that everything should continue
on as planned,
and the interest rates for mortgages will
likely be raised sometime at the end
of Q2 or Q3 of 2022.
Okay, so here's the bad news.
The videos stopped rolling, but the good
news is I know what I still want to say.
So, for example,
on day 1, you submit your application
to a lender for a fixed interest rate
and 60 days after that interest rate
is moved up by a 0.25%.
As long as your mortgage closes
in the next 60 days,
you are protected and you can keep
your lowest interest rate that was
originally offered to you.
What is also great is that if rates go
down during this time and prior to your
mortgage closing, you can also take
advantage of the lower interest rate.
Once your rate hold expires,
there is nothing stopping you
from submitting another rate hold.
It will just be subject to another
current interest rate
on the day of the re-submission.
So there you have it.
That is the benefit of getting a rate hold
and making sure that you take
advantage of this service.
There's two other great videos
that I want to mention on our YouTube
channel that you'll definitely
want to check out as well.
One is simply explaining the differences
and false advice that many home buyers get
between getting a fixed or variable rate
mortgage and include some information that
you will likely not get from the bank.
The other video is the actual difference
in the people that can
offer you mortgages.
If you're curious on the difference
between getting your mortgage
directly from a bank versus a mortgage
broker, you definitely need
to watch this video as well.
You want to make sure that you know your
options for getting a mortgage
when you buy a home.
And lastly, be sure to check out our
website for all the resources
for buyers and sellers.
And while you're there.
Pick up our free PDFs on either maximizing
your home's value by up to 5% in a weekend
or the top 6 mistakes home buyers
make every time and how to avoid them.
You only get one one chance to buy or sell
your next home, so let us
help you get it right.
Be sure to subscribe to this video and we
will look forward to seeing you next time.
Thanks for watching.