Mortgages Made Easy Blog

Our brokers post interesting news, tips, and industry updates every week.
NOV
25

The very best mortgage rates start years before you need a mortgage……

Credit card shopping spree

Most of us want to raise healthy, happy children, and one great component to that is teaching finance for teens. This should include a very healthy understanding of credit at an early age. When you understand how powerful smart credit habits can impact your life, you make it work for you, not against you; that can be life changing.


As a counter-intuitive as it might sound, one great way to raise financially bullet-proof kids (works for any age, of course) is get them two credit cards, not one. Having and using two credit cards strategically is powerful credit score builder.

The secret is keeping the amount of credit used on each card to 75% or less of the total available credit value of that card, and then paying off the card completely in advance of the due date to avoid high interest charges or poor ratings. When you consistently do this, your credit rating will soar! Sure, it requires a bit of discipline and a healthy fear of paying fees, but without discipline, no plan in the world is going to save you from yourself. And down the road, when you start looking for a home & mortgage, the payoff for this discipline will be massive. Plus living a life of debt respect is truly stress-free living. More to follow on this subject.

Looking for a mortgage? Wondering if you qualify? Interested in refinancing” Our secure and completely confidential “no obligation” quick-form can give you answers, fast.

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NOV
17

Most Canadians don’t use a mortgage broker. That’s unfortunate (for them).

Mortgage broker explaining document to couple

It’s true, less than 30% of Canadians use a mortgage broker.

I think there are two main reasons for this:

  1. Most Canadians don’t understand what a good Mortgage Broker does or how that broker can save them a great deal of money, and
  2. Most people hate the idea of change (until they understand the cost of staying put, that is)
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SEP
10

Prime Interest Rate Stays the Same

Bank of Canada

The Bank of Canada met again yesterday September 9, 2015 to discuss another possible rate drop:


After much anticipation and talk about the rates dropping by another quarter percentage point, The Bank of Canada met today and decided to keep the prime interest rate the same.

http://www.cbc.ca/news/business/bank-of-canada-interest-rate-1.3220395 

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AUG
11

Is Variable Really the Way To Go?

Variable rates may be more expensive than you think...


It’s hard to go wrong with today’s fixed or variable rates but here is a great article on variable rate mortgages that most consumers do not think about when picking the lowest rate:

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/why-variable-rates-are-more-expensive-than-you-think/article25898959/

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JUL
27

Take Advantage of our Variable Rate Special

Would you consider an interest rate at 2.00%?

With the prime interest rate dropping many people are taking advantage of our new variable rate at prime -0.70%. 

This rate is available for all types of mortgage transfers, refinances or purchases for both high ratio and conventional deals.  This rate can be held for 60 days - real deals only. *OAC.

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JUN
25

Pitfalls of Collateral Mortgages

Miniature man figure standing on coins

Most mortgage shoppers will ask about rates, terms, mortgage payments, prepayments, etc. Most people would not know to ask if their mortgage is going to be a conventional or collateral mortgage.

Many people don’t know the difference between the two. You could end up with a collateral mortgage from your bank and not even know it? It is usually in the fine print and many times the banker does not understand or will not disclose it to you. Not knowing the difference between the two mortgages can become expensive for you. You want to not only know the difference between the two products, but you want to have a choice of products. Most people when they ask for a $300,000.00 mortgage believe that that is the amount that the bank would register on title. This is not what happens when the banker registers their collateral mortgages.


 

Collateral Mortgage

A collateral mortgage registered on your home is usually for a larger amount than you asked for. If you asked for a $300,000.00 mortgage, the banker can choose to register $350,000.00 or $450,000.00! The amount registered can be 100% to 125% of the house value! This allows you to borrow, at a later date, the extra funds based on the bank’s current lending criteria, your ability to repay the mortgage. The banker will tell you that this will save you money and it is for your benefit; it is what they don’t tell you that can cost you money and hassles.

Beware of What The Banker Does Not Tell You!

They won’t tell you that you cannot transfer your mortgage to another lender on the maturity date for FREE. You could pay the mortgage at maturity from another lender but it would likely cost you close to $1,000.00. This means you are married to the bank regardless of what their renewal rate is! There would likely be lower rates available, (there usually are), but you can’t do a FREE TRANSFER if you have a collateral mortgage.

Would you agree that this is why many of the major banks are switching to collateral mortgages?

The bank may also use the collateral mortgage to offset other mortgage debt, your car loan, credit card debt, or line of credit.

See Collateral Mortgage Article

If your banker declines an increase of funds to you at a later date you can’t do anything about it. You would have to pay the bank in full plus penalties & legal fees. You cannot put a second mortgage behind the bank’s mortgage because the bank has registered 100%-125% of the property value. You think you have equity but you don’t!

Risks & Costs

We see clients all the time that have gone back to their bank to borrow more money on their home and they are declined for the increase. So they ask us for a small second mortgage. We cannot help them unless we pay their bank’s mortgage in full. No one can help them because their bank has a mortgage registered on title for 100%-125% of the house value. Now they have legal fees, discharge fees & potential penalties.

You may decide you want a collateral mortgage but we think most people want to have choices.

The best advice is asking the question up front to your broker or banker and make sure you know what you are signing up for. Not knowing could end up costing you thousands of dollars.

Our clients have the options explained to them up front and they choose what they want, not what some banker is selling. At many of the banks now you don’t have any options, other than their collateral mortgage.

Call us for more information on this or any other mortgage questions you have at 613-563-3447.

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Contact Us

  • Ottawa-Carleton Mortgage Inc
    381 Richmond Road Ottawa,
    Ontario K2A 0E7
  • Phone: 613-563-3447
    (24 hours)
  • Fax: 613-563-3195

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