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Old 03-15-2013, 10:22 AM   #121
onetwo_threefour
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Yes, I always try to explain to people that a convertible mortgage doesn't mean you get to lock in at the rate you have, it means you can convert the remainder of your term or sign up for a longer term at the posted fixed rate for the term you are signing up for. I'm not a big fan of selling people on the convertibility option, because the client really doesn't have any leverage to negotiate rates at the time of conversion. If you don't understand that, you might not realize that when you convert the rate might not be as good as you think.

This is exactly the kind of stuff where I have clients come back years later and tell me the bank is unfair,or the mortgage broker was unethical because this wasn't explained. Unfortunately, all we can tell people at that point is that is was a term of the financing they agreed to.
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Old 03-15-2013, 10:42 AM   #122
temple5
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I have heard that for most if not all Variable mortgages the payout penalty is 3 months interest - is this true?

Thanks
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Old 03-15-2013, 10:51 AM   #123
pseudoreality
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You sound like a good mortgage broker. When I first bought my house in 2007 I dealt with an idiot of a mortgage broker. He didn't shop at all, gave me one option, which I had beat by talking directly to a bank already. Then the guy left town when things were closing. It really gave me a bad taste when it comes to mortgage brokers. When I renewed I talked directly to the bank.
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Old 03-15-2013, 12:40 PM   #124
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Quote:
Originally Posted by pseudoreality View Post
You sound like a good mortgage broker. When I first bought my house in 2007 I dealt with an idiot of a mortgage broker. He didn't shop at all, gave me one option, which I had beat by talking directly to a bank already. Then the guy left town when things were closing. It really gave me a bad taste when it comes to mortgage brokers. When I renewed I talked directly to the bank.
Not sure if you were talking to me, but I realized my post might sound like I'm a mortgage broker. I'm not. I'm a real estate lawyer, so I'm more talking about the aftermath when I say I'm not a fan of selling people on convertibility as an option. Just to clear things up....
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Old 03-15-2013, 01:40 PM   #125
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Sorry, I know there's a couple mortgage brokers on here and I must have got confused.

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Old 03-16-2013, 09:40 AM   #126
Deegee
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Quote:
Originally Posted by temple5 View Post
I have heard that for most if not all Variable mortgages the payout penalty is 3 months interest - is this true?

Thanks
Most of the ones I have seen have had the 3 months penalty.

I know I have seen some mortgages with 6 month penalties and IRD, and specifically with MRS Trust I have seen it where you cannot prepay at all unless you sell the property, mind you those were both fixed situations.
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Old 03-19-2013, 01:08 PM   #127
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Anyone know what the 5 and 10 yr rates are these days? Thanks.
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Old 03-19-2013, 10:32 PM   #128
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Anyone know what the 5 and 10 yr rates are these days? Thanks.
I don't want to hijack her thread but I have just updated rates in my Mortgage broker thread in the CP power ring.
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