Military Moving Canada sat down with Mervin Quinlan*, mortgage advisor with the Bank of Montreal to get his thoughts on the current market.
What are mortgage rates doing right now?
Fixed mortgage rates have been dropping for the first half of 2019. Variable rates have remained steady during the same period. The Bank of Canada left their prime rate unchanged in the month of May.
Is it a good time to buy?
On May 16th, 2019 the Bank of Canada released its Financial System Review. The report quoted that “The housing market as a whole continues to benefit from solid fundamentals, including population growth and strong job creation”. These factors along with the recent drop in fixed mortgage rates make it an excellent time to buy.
There are many mortgage options out there. Why is BMO a good option?
BMO is the exclusive Bank of the Canadian Forces and we continue with our endeavours to support the troops and offer benefits to members through our Canadian Defence Community Banking (CDCB) Program. For mortgages, that means you automatically receive the same rates as BMO employees along with free day to day bank accounts. These benefits are also extended to military family members, veterans and RCMP. For full details on our CDCB program, click here.
Generally, how long does it take to get a military mortgage approved?
The turnaround time for a mortgage can vary on a case by case basis. From the moment a complete application is submitted to getting a confirmation of financing letter is about 6 days. A verbal approval confirmation can typically be provided in about 2 to 3 business days. Some factors that can cause delays in a financing letter are not having the correct tax documents, waiting for letters of employments, appraiser availability and changes to purchase and sale agreement. Getting a mortgage specialist involved at the beginning of the process is best as they can pre arrange the mortgage so that the only thing missing for you to do is pick the property.
What are your top things should people keep in mind when they’re mortgage shopping?
One of the key things I think you need to keep in mind when mortgage shopping is how long you expect to live in the home. 67% of Canadians choose a 5 year fixed rate but that may not be the best option for you. You may want to choose a shorter term that matches your posting (in the case of military) or even consider a variable rate if you are unsure what the next move will be. A unique feature of BMO’s Canadian Defence Community Banking (CDCB) Program is that enlisted military members are not charged a penalty when they are posted and need to break their mortgage; for example if they were posted internationally.
While rate is important, there is so much more to a mortgage such as ability to prepay, ability to transfer to a new property, set up fees, options to pause payments should their income be interrupted and customer service. A mortgage specialist can discuss their situation in person or over the phone and provide customized mortgage solutions.
Anything else you think we should know?
In summary I think everyone should have a plan in place when buying a home. One of the most important part of that plan is recruiting a team of professionals early that guide you through every stage of the process. This includes your realtor, mortgage specialist and lawyer. This can really take the stress out of buying a home because you can trust your professionals to do the heavy lifting in the background. The process becomes really enjoyable when all you have to worry about is choosing the color scheme for your new dream home!
*Mervin Quinlan BEng is a mortgage agent with BMO based in Halifax, NS. The opinions expressed here are his own and do not reflect those of the BMO Financial Group.
Contact Mervin at firstname.lastname@example.org
M: 902 448 8224