I have to admit – I’m a huge hockey fan, and every year I take “NHL Trade Deadline Day” off to lounge around and watch sports TV all day. I’m self-employed (I work under a brokerage – Real Mortgage Associates – but not for them), and one of my favourite benefits of being my own boss is a flexible schedule. As soon as the 2012 NHL Trade Deadline was announced, it was added to my calendar as a full-day appointment – something that makes many of my regularly-employed guy friends jealous, I’m sure. 😉
But what does the NHL Trade Deadline have to do with mortgages? As I sat there watching “player reactions” after just finding out they’ve been traded (this year there were 15 trades that included 31 people), none of them specifically mentioned their house or mortgage, but many of them noted that getting traded results in having to move their family. I imagine in many cases, this means selling their house and buying a new one. Now consider the fact that a good chunk of these athletes make $X,xxx,xxx/year, so their house and mortgage are probably a pretty decent size. If they have to break their mortgage early, this could end up costing them tens of thousands of dollars in penalties. Here in-lies the importance of a good mortgage broker.
If your situation is such that it’s possible that you may be moved for work, changing jobs, etc., it may be more important to have an open mortgage that you can easily get out of. Sure, a privilege like this could cost you a little in the rate department, but if you have to break the mortgage early, it could pay for itself hundreds of times over. Would you rather have a rate of 3.19% and the possibility of high penalties, or 3.29% with some great pre-payment privileges and low buy-out penalties? If there’s little chance you’ll be needing to break the mortgage, saving $20/month may be worth the chance, but on the flip side, that $20/month savings could end up costing $20,000 in penalties if you’re not careful.
When it’s time for you to buy your first house, or renew your current mortgage, take the time to chat with a mortgage professional. A good mortgage broker will ask these types of questions and help you pick the rate and options that best suit you! You may be a tenured college professor who’s not going anywhere anytime soon, but if you’re a NHL player, location-certainty isn’t exactly set in stone – just ask the 31 players that were traded today.
