I’m tired of seeing the ads on TV and in print about how Scotiabank or BMO can help you pay your mortgage faster. In one particular one a couple sits on their couch and scratches their heads when they see their mortgage statements, and say “I wish we could pay our mortgage off faster” which clips to a big blue room (presumably heaven) where the BMO rep says “oh but you can!”.
Of course you can pay your mortgage off faster but have BMO or Scotia or TD ever mentioned that the penalties they charge are amongst the highest in the industry IF you have to break your mortgage sooner (rather than pay it off)? No - they don’t mention that. Anyone can pay their mortgage off faster by taking advantage of the pre-payment options (which almost every lender has, ranging from 5% of the balance to 25%…
As a broker who takes a lot of calls from a lot of different people, I can tell you honestly that the worst question to answer is this: “What’s your best rate?”. Not that I don’t like talking rates over the phone or in person, I do. Matter of fact these days I love talking rates because of how low they are and will continue to be. That being said however, the question bothers me because it shows me that many people still don’t get that rate is such a far and wide question it is impossible to answer straight up. Let me give you another example: when buying a car do you call a dealership and say “what’s your best price?”. No. The dealer would obviously ask you what kind of car are you looking for? SUV? Sedan? Coupe? Used? New? Lease? Buy? You get my point, right? Just…
My happy couple just announced they were having a new addition to their family so they went out and started house hunting. We assessed their current mortgage situation (3 years left at 3.89% with a Big Bank) and found out the penalty would be $10,000 to break. They were going to increase their mortgage by $150,000 to move into the ideal long-term neighbourhood and pay off all their consumer debt. New house, new beginning, new financial plan. Luckily they found a place and won their bid with little competition, and then sold their home in 3 days (a record on the street). Mortgage approved and everyone is happy…
.....until rates dropped by a tiny amount and their penalty shot up by 60% to $16,000 from $10,000. Can you imagine? a .20 basis point drop and the penalty goes up by 60%? Suddenly we’re in trouble: my clients don’t have the…
Today I had the pleasure of reading this full-of-holes blog on the internet by Garth Turner, a post that I will counter with my own bold points.
In the first two weeks of March real estate deals in Toronto were down 11.5%. Sales of single family homes dropped about14%. This is consistent with every other market in Canada. Year/year transactions have plunged from single digits (Calgary) to a withering 40% (Lower Mainland). There is not a single major city or province where the pattern has been breached.
This is spring, and mortgages are 2.99%. Go figure. As night follows day, lower prices trail falling sales. Especially in 2013.
That’s funny because the City of Toronto keeps experiences rising prices in Real Estate.
So why would anyone empty their bank account and chunk up on debt to jump in now?
One main reason is that we are at…
Ok, let’s face it. You were smart enough to work with me, your mortgage agent. You knew I brought many benefits to the table that the big banks don’t - knowledge of the products, access to various lenders, and great rates and service. But then you want to buy my life insurance? Really? Full disclosure: I get paid if you do so I shouldn’t be complaining should I? Truth: You couldn’t pay me enough to like and stand by the product enough. I’ve always believed the most successful sales people are the ones who believe in the product they sell. If you asked me to sell lids to coffee shops I couldn’t, because I don’t care. For some reason I was fortunate enough to start in this business ten years ago and having visited so many buyers and being part of their improvement in net worth AND quality of life…
This past weekend one of my longest-standing friends, Ken, got married. I was at the wedding and we got to talking about what we all do for a living (which is inevitable at any wedding) and the topic of mortgages came up. When someone asked which banks I favour I said “oh, those you’ve probably never heard of” until the guest told me where his mortgage was and then I had egg on my face - it was one that he “probably never heard of”. Lucky for him he was smart enough to go with a mortgage broker or agent and not head to directly to the bank for his options. However, chances are that most people have never heard of: First National, MonCana, Merix Financial, Lendwise, MCAP, CMLS, just to name a few. Why? These are what we call in the industry monoline lenders. What that means is that…
Sometimes, not too often, but sometimes clients of mine get agitated or annoyed about the conditions of a mortgage approval, and ask me “why do they want that?”. It’s a natural reaction, as our private financial affairs are just that - private. However when borrowing hundreds of thousands of dollars I have to say: don’t sweat the small stuff. My role as a mortgage agent is that I’m supposed to act on both the lenders behalf and yours, the borrower. As a result I’m put in the middle between you two and have to reasonably expect that there will be demands placed by either side, and manage those expectations and demands. I try and minimize the amount of documentation needed to make the life of a consumer easier, and NOT to “hide” things from the lender. I know what it is like to amass documentation and that’s why I always…
With regret I inform you that bidding wars are happening with more regularity than Jim Flaherty wishes. In hot areas like Roncy, Bloor West, Junction, Leslieville and Riverdale, bidding wars are spiking up home values faster than the snow piled up last week. That’s not to say they will continue but in the short-term, while lending rates remain rock-steady and in the basement, and inventory is extremely low (quality inventory, that is), bidding wars are a fact of life in the Toronto market.
As a seasoned mortgage agent I get many calls from first-time and repeat buyers who are frustrated that this is happening. I have a young couple who just sold their condo through the tough Christmas market and were outbid by $50,000 on a townhouse, where the identical unit sold for only $75,000 less just 8 months ago. I have another amazing couple who…
Ever since the mortgage rules have changed there has been an increased pressure for self-employed borrowers to shore up their taxes and declare more income (thus, pay more tax). There are three insurers that lend on self-employed applications but the rules (both official and unofficial) differ, so it’s important to know where to go based on your situation.
For example, CMHC will insure self-employed borrowers but will only accept “stated income” applications (which differ from their actual tax return numbers) if the client is self-employed for less than three years but more than two years. So essentially if you’re self-employed for three years or more you’re having to prove your income via tax returns and line 150 on your Notice of Assessment. In reality this rules out a great majority of borrowers so CMHC is not the best route to go if you’re self-employed.
Genworth, on the other hand, does…
It’s a sad day when a lender leaves the broker channel. We represent about 20-28% of mortgage originations in Canada, a number that’s far too low in my opinion. I understand the allure of having “everything under the same roof” but the problem with that thinking is you don’t open yourself up to other financial opportunities or offers that may end up saving you loads of money. Yes, free banking for a year may seem like a great deal, “Hey Honey! We just saved $16 a month at the bank because we took our mortgage there!”, but wait until you get your IRD payout from that bank and the conversation will go more like “Hey Babe! We can’t afford that furniture for our new house because we are paying $17,000 to break a $220,000 mortgage! But we got free banking!”
But I digress..
Back to my original point. When a…