In the past few articles, we’ve talked about the importance of your mortgage as one of your most significant financial decisions. We’ve explored the value of seeking the advice of a mortgage professional -whether you’re buying a home or renewing an existing mortgage.

Today, let’s take a look at the bottom line: the savings you can enjoy by making the right mortgage decisions.

It is the primary role of a mortgage broker to find you the right product for your personal situation. A mortgage broker is a financial professional and – like your investment advisor – he or she will want to understand your personal situation and payment preferences. Your mortgage broker has access to a broad spectrum of lending institutions, so you can do some valuable comparison shopping for the right combination of features, rates and mortgage options.

All these choices offer you substantial opportunities to save money over the life of your mortgage.

If you are like most homeowners, you are focused -for good reason – on finding the best possible rate for your mortgage. Your mortgage broker can offer you the best range of rate options and terms. If a mortgage broker can get you one per cent off the posted rate, that could translate into more than $13,000 in interest per $100,000 borrowed over a 25-year amortization schedule. If, however, you believe that most mortgage rates are basically the same from one institution to the next, then consider the fact that even an eighth of a point difference in the rate can offer significant savings over the duration of your mortgage.

But it’s also important to look beyond the rate. There are other ways to find savings in your mortgage. Your mortgage broker is up-to-date on market trends and new opportunities… as well as some of the tried-and-true ways to save money in a mortgage.

Do you get an annual bonus in your job? You may want to use that bonus to pay down the principal of your mortgage. If you pursue this strategy consistently over the life of your mortgage, you could save thousands of dollars in interest by paying your mortgage off sooner.

Are you paid bi-weekly or bi-monthly? Consider a change from the usual monthly mortgage payment. Set up your mortgage payment schedule to coincide with your pay period. Again, you can shave years off your mortgage, and enjoy thousands of dollars in savings.

In the coming weeks, we’ll look at some of these savings opportunities in more detail. In the meantime, consider the old penny proverb again. How much is your time worth? Time savings is one of the key, unexpected benefits that clients say they have enjoyed when they choose to work with a mortgage broker. Above all, a mortgage broker is an expert in customer service, and that means that your broker looks after every detail of your mortgage research and negotiations on your behalf.

The housing rescue bill signed into law last week presents Bank of America with opportunities to expand its efforts to keep struggling borrowers in their homes and to increase the bank’s production of various mortgage products.

Key features of the Housing and Economic Recovery Act of 2008 include a new Federal Housing Administration (FHA) program to help distressed homeowners obtain more affordable loans, enhancements to traditional FHA loan programs and other provisions to address America’s troubled housing market.

How does the law affect Bank of America customers? It provides lenders with another tool to help at-risk homeowners, offering those who qualify a way to refinance into low-cost, fixed-rate mortgages backed by the FHA. The resulting increase in FHA loan production should create new growth opportunities for Bank of America, already the nation’s leading provider of FHA financing.

Even before the housing bill was passed, Bank of America had announced plans to modify or work out at least $40 billion in troubled mortgage loans over the next two years. The goal is to help an estimated 265,000 borrowers stay in their homes instead of lose them to foreclosure.

Overall, the new legislation is aimed at strengthening nationwide efforts to help struggling homeowners and restore confidence in America’s home financing system.

The law will modernize the FHA by increasing its maximum mortgage amount to $625,500 in high-cost areas, up from $417,000, thus offering more refinancing and purchase loan opportunities. Other features of the law include enhanced oversight and new regulatory guidelines for the government-sponsored enterprises (GSEs), including Fannie Mae and Freddie Mac.

Bank of America was a longtime supporter of FHA modernization and efforts to create a new regulatory regime for the GSEs. Bank of America also worked closely with legislators to ensure that the new FHA refinance program was voluntary, targeted and commercially viable.

To qualify for a loan under this program, at-risk borrowers must meet at least three key criteria; they must:

• Currently be living in their home
• Have obtained their mortgage between January 2005 and June 2007
• Be spending at least 31% of their gross monthly income on mortgage debt on their primary residence

Such loans will be pegged to the market value of a borrower’s home at the time the loan is refinanced.

The new legislation also includes a tax credit for first-time buyers and a new standard deduction up to $1,000 for joint filers ($500 for individuals) who are unable to itemize deductions.

In addition, the law will create opportunities for Bank of America to expand its leadership position in reverse mortgage production. As the Department of Housing and Urban Development refines guidelines that will raise the loan limits on FHA-insured Home Equity Conversion Mortgages, the product becomes a viable solution for more customers.

Nothing like this has happened in over 100 years and nothing like this may occur again.  At this point all I can say is “Buyer Beware” and “Current Homeowner Beware.”

Fannie Mae and Freddie Mac, the two GSE’s that purchase all of the conventional mortgages in the United States, last week reported losses in the 2nd quarter which was 3 times less then what Wall Street estimated.  After they reported there earnings they announced that home prices are expected to fall on average an additional 20% from their current levels.  Some areas will not lose as much while other areas will be impacted a great deal.  The hardest hit areas will be California, Nevada, Florida, and Arizona.

What does this mean to buyers?

What you buy today will be worth less in the next 12 months.  Once home do start appreciating they will appreciate at a much slower pace then at anytime in our history.

What does this mean to current home owners?

As long as you have no plans to move for several years then you are fine.   For those who cannot afford the house payment anymore you might as well just walk away because I do not see any relief in sight.  Even though the government approved that Housing rescue bill we still do not know all the details.  It is estimated that it will only help 400,000 families but it is estimated that a total of 2 million families will be hit with Foreclosures in 2008.

What can we do?

I do not have the answers.  However you may be able to find the answers by speaking to a professional in your area that handles these types of issues.  You may have to confer with an attorney, tax, or real estate professional to help you with a plan.  And believe me a plan is what every person needs right now.  Do not go into this blindly.  Get as much information as you can and be ready for the biggest roller coaster ride ever.

To find a qualified person to talk to in your area just go to 104inc.com.  This site allows me to search different firms by geo-targeting the area that I live in.  Check out 104cpa.com, 104realestate.com or 104attorneys.com as a starting point.  You can see reviews posted by other users and join a network of like people who may be in the same situation as you

There are 2 main ways of getting a mortgage, through a bank or through a mortgage company. To help with getting a mortgage you will use a loan officer or a mortgage broker.

The main difference between a loan officer and a mortgage broker is that the loan officer works for the bank or mortgage company that is offering the mortgage and the mortgage broker is independent. They may use a number of different companies to arrange a mortgage with and there fore give you the borrower more choice.

One of the main advantages of having a broker arrange your mortgage for you is that they do have a wider choice of products and companies to choose from. On the other hand you need to be aware that the mortgage broker is paid from the closing fee made on the mortgage.

So if you have a poor credit history most banks will not give you a mortgage. The mortgage broker on the other hand can search around all the companies he deals with to find a company that offers bad-credit mortgage loans. He may even be able to find a choice of offers for you and you can pick the best deal for your circumstances.

It may be faster getting your mortgage through a bank or credit union but you may not always get the best deal. The mortgage broker should be able to get you a better deal on your mortgage, although it may take longer to arrange because he is acting as the middleman between you the borrower and the mortgage company, the lender. It can be time-consuming to resolve mortgage matters between these two entities because of all the paperwork involved and the financial checks needed.

While the mortgage broker can help with filling in the applications and details it is up to the borrower to check and submit correct information so that they do not get into financial difficulties later on.

While buying a home is one of the most stressful things you can do, it is also usually a sound financial investment. However it is always best to get good and sound financial advice from an independent financial advisor, someone who is familiar with property or an independent mortgage broker

Question: “What’s the biggest financial investment most Canadians will ever make?”

Okay, that may have been an easy one if you read the headline of this column. For most Canadians, their home is their biggest investment – and their most powerful financial tool.

It’s odd – given the importance of the mortgage decision – that many homebuyers will spend much more time deciding on which mutual funds they should invest in… or even which sofa to buy… than on which mortgage will best meet their needs.

Times are changing though. Mortgage options are exploding, and Canadians have begun to demand – and receive – better rates, more flexible products and more personal service than ever before. And to get a better look at their growing range of options, more homebuyers than ever are going to a mortgage “store” – and to the professional mortgage brokers who run them.

The Ontario mortgage store is a symbol of just how much the mortgage industry has changed since those days when you simply walked into your local bank to apply for a mortgage. Today, one in three first-time Canadian homebuyers choose to work with a mortgage broker, and those numbers are climbing. It’s estimated that in the not-so-distant future, up to 50% of all Canadian mortgages may go through a mortgage broker for their financing needs. Our American neighbours are far ahead of us; almost 70% of all U.S. residential mortgages are now arranged through a mortgage broker.

Here in Canada, homebuyers are demanding choice – and they’ve been beating a path to the door of independent mortgage brokers to get it. Happily, that path is becoming shorter and more traveled; with attractive and inviting storefront offices, many independent mortgage brokers are now setting up “Main Street” offices… just like the banks.

It’s hard not to get excited about the options available through a mortgage store. To begin, consider that many different institutions lend money for mortgages: banks, trust companies, credit unions, pension funds, insurance companies, finance companies, etc. At a mortgage store – like those run by many independent consultants at Mortgage Intelligence, Canada’s premier player in the mortgage broker industry, homebuyers (through their mortgage broker) can access mortgage rates and information from a huge, varied group of lenders, including traditional banks, of course. The mortgage broker doesn’t represent any specific lending institution, but works to find a tailored mortgage solution. And they have information on the growing list of specialized mortgages that now cater to niche markets like the self-employed, or homeowners looking for a recreational or investment properties, for example.

For many Canadians, the family home has been their best-performing investment in the last several years. It’s a reminder that a Ontairo mortgage is an important financial tool – and access to a broad range of lending institutions is a critical advantage. After all, a quarter-point difference on your mortgage rate can add up to many thousands of dollars over the life of your mortgage.

Ontairo mortgage storefront offices are popping up in towns and cities all across Canada. For your own financial well being, they’re definitely worth a browse!