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March, 2000 Newsletter

+++++++++++ March 15, 2000 +++++++++++++++++++

Mortgage Rate Update: Some Relief at Last!
Recent Site Updates: Choosing a Mortgage
Mortgage Comparisons
Canadian Mortgages
This Month's Tip: Mortgages--Compare but Be

Welcome to the March edition of the Home Buyer's
Information Newsletter. Spring has definitely arrived
in many parts of the U.S. and Canada, both in the
temperature as well as the activity in the Real Estate
market. Although there was a slight decline in sales
levels early in the year, the overall outlook for the
year 2000 is still for one of the best years ever in
overall sales. More activity in the market generally
equates with more choices and availability for the
Mortgage Rate Update: Some Relief at Last!
After a steady trend upward, mortgage rates have
retreated just a bit in early March, with 30 year
fixed rates just over the 8.00% mark. In Canada,
3 year closed term rates were in the 8.15% range. Both
rates are a decrease from levels earlier in the year.
Many analysts forecast a see-sawing of rates--up a
little one week and down a bit the next--in the short
term, unless there is an onrush of good (or bad)
economic news. In such an environment, comparisons
of available mortgages are extremely important. See
this months tip, "Mortgages--Compare But Be Aware!"
later in this month's newsletter.
For more information on mortgages, visit the recently
expanded section at:
Recent Site Updates: Choosing a Mortgage
The volume of mortgages available can sometimes be
bewildering, so we have added a section dealing with
the basic choices--and pros and cons--available at:

Mortgage Comparisons
We have also added a printable page where you can keep
track of up to 4 different mortgage offers including contact
information, rates, points, etc. at:

Canadian Mortgages
Although much of the information on the Home Buyer's
Information Center is applicable in Canada, there are
some basic differences in the structure of Canadian
mortgages, which are discussed at:

Free Credit Report for Tax Time
In the U.S., tax time is just 30 days away which means it
is a good time to review all of your records for the
previous year, including your credit report.
FreeCreditReport has made this a simple process
with the availability of a free copy of your credit
report as well as a free trial of their CreditCheck
monitoring service so that you can keep an eye on your
report. There is no obligation and it gives you the
opportunity to iron out any problems before they can
cause time delays and aggravation. More information at:

This Month's Tip: Mortgages--Compare but Be Aware!

One of the most important components of the home buying
process is the selection of the right mortgage. For some
buyers, unfortunately, the concentration is so focused on
small and inconsequential matters--say the color of the
tile in the kitchen--that they neglect to put enough
emphasis on mortgage choice and selection. Mistakes made
here can cost thousands--or tens of thousands--of dollars
in unnecessary expense. In addition, mistakes can hurt
in other ways, for example making a home difficult to sell
or even requiring money out of your pocket (because of a
high loan balance) when it comes time to move.

Home buyers almost always say that they want to get the
best mortgage available, focusing primarily on rate. There
is, however, no generic "best mortgage" for everyone. What
fits and may be the perfect option for one buyer may be the
worst possible choice for another buyer. One size and style
definitely does not apply when it comes to mortgage loans.
By spending some time making comparisons, rather than just
accepting the first mortgage plan offered, you can greatly
increase your chances of success. The following are a few
factors which you should consider when comparing:

Payment to Budget
Possibly the most important consideration is the proposed
mortgage payment in relation to your budget. There are 3
components here: First, your qualification (what the lender
SAYS you can pay), second, your comfort level (what your
heart says you will be comfortable with) and third, common
sense (what is realistic for your situation). Since the
final determination is always in the hands of the lender, it
is important to remember that the first component (the
lender's opinion) takes precedence over numbers two and
three. If you feel that comfort and common sense dictate
a lower payment than you qualify for, great. If you feel that
they leave room for a higher payment, the lender's opinion
will always win out!

Present and Future Needs
Many buyers make the mistake of focusing strictly on their
current needs, ignoring the possibility of changes in the
future. A good example would be securing a fixed rate loan
for a home that they will likely live in for 5 years or less.
An adjustable rate mortgage, with its lower initial rate,
may well be a better choice in this situation. For more
information on choosing a mortgage, see the new section
devoted to this topic at:

Amount of Downpayment
If you have 20% or more downpayment available, you will find
that your mortgage choices are fairly wide open. For those
majority of buyers, though, with less than 20% down, you will
need to focus your attention on those mortgage plans that can
accommodate a lower level of downpayment. Certain conventional,
FHA and VA loans would fit into this category. You will also
find a discussion on mortgage choices at:

How to Compare
Local Newspapers: Your newspaper will often list basic rates
and terms, usually in the weekend Real Estate section. This
can be a quick comparison, although you will need to contact
the lenders directly for specific requirements.

Local Mortgage Brokers: Brokers have access to several--or
many--different banks and mortgage lenders. They can act as
a "matchmaker" between your situation and specific programs.
Individual Banks and Mortgage Lenders: Although you can get
detailed information from each of these sources, it often takes
a formal application (with associated fees) to get the complete
offer and associated estimates of closing costs.

Internet Comparisons: One of the most powerful benefits of the
Internet Age is the ability to make quick online comparisons so
that you have the maximum information available for making your
decision. Sources such as Lending Tree and iOwn simplify this
process by the use of a single application. More information at:

Individual Lenders: Another option is to call or visit individual
lenders to compare their offers. Although you will get the
complete picture from each, it is by far the most time-consuming
process. If you have an ongoing relationship with a local bank,
you may want to contact a loan officer there to compare their
offer with others you have found.

Additional Hints to Keep in Mind When Comparing

* Beware of "pushing" qualifying ratios. No matter what loan
you select, you will need to meet specific qualifying ratios
(your debts as a percentage of your gross income). Pushing
these ratios to their maximum limit can have a detrimental
effect on your overall household budget. Finding yourself
"house poor" is an unfortunate result of putting too much
emphasis--and income--into your monthly housing payment. Getting
the most expensive house possible may help your ego but cause
havoc with the rest of your budget and lifestyle. The most
beautiful house in the world loses its glow when it is sparsely
or cheaply furnished, and the happiest homeowners can quickly
lose their smiles when they find that vacations, dining out or
a child's education needs to take a backseat to a crushing home

* Watch out for high ratio mortgages. You've probably seen the
TV and print ads heralding the benefits of high ratio
(100-125% loan value) mortgages. For a limited number of buyers,
these may be helpful, but for most they can have hidden
"timebombs" that can cause big problems in the future.
For more information, see the page at:


As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line to:
or access our feedback page at:
A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month!

The Team at the Home Buyer's Information Center

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