I just stepped through the process with a client of mine and thought I would share the details with you.
Do you or anyone you know have a current interest rate of 5.5% or higher on their mortgage? Would you or your client be interested in saving almost $10,000 over the next 5 years? No joke. No gimmick.
Let’s look at a case study.
I have a client with that’s 1.5 years into his 5 year term. He has a 40 year amortization.
His breakout fee is $2600 (standard breakout fee is 3 months interest).
His cost savings going from 5.79% to a 3 year fixed at 4% is $200/mo!
In a year that’s a savings of $2400. At the end of his 3 year term, that will put him ahead by almost $4800. Two more years at this rate and he’s at $9600.
On top of this, he has opted for a bi-weekly accelerated payment (26 payments a year), which further reduces his amortization from 40 years down to 26 years & 8 months at the end of 3 years. That’s 13+ years savings of not paying interest. Do the math that’s $135,000 of savings in interest over the life of his mortgage! This is why I argue that TERMS are more important than rate ever will be.
Warmest regards
John R. Walsh, B.Eng
Mortgage Agent with Mortgage Alliance
Licence Number: M08000603
Founder of O.R.E.I.O.
613-237-7044 x148
888-474-0137 (toll free fax)
jwalsh@mortgagealliance.com
jr2walsh@gmail.com
http://ForAllYourMortgageNeeds.com
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