Mortgages Made Easy Blog

What does a mortgage broker do?

I’m a registered mortgage broker – not an agent (I’ll explain the difference in another later blog post). In a nutshell, my job consists entirely of arranging mortgage financing for people either looking to buy a home or refinancing a home they already own. I’ve been happily doing this job for 28 years.

So who pays the Mortgage Broker?

Good question. I am 100% self-employed, which means I am not paid a salary. Everything I earn is simply a result of being paid a commission by a mortgage lender, and I only get commissioned if I’m successful in connecting the right lender with my clients. You are my priority, so for that reason, I never deal with a single lender. Every client has unique circumstances, which is why I work with a pool of about 20 different lenders, including Banks, Trust Companies, and Credit Unions. This gives my clients more and better options and it makes lenders compete harder for your business. This results in the best mortgage experience for my clients.

In the simplest of terms: If I don’t keep you happy, I don’t get paid.

The only time there might be a charge to you the borrower is when I’m arranging finances for someone with a challenging credit situation or income issues that may make it necessary to borrow from “B” type or private lenders. Sometimes people need help, even when the big banks say no. In this situation, all fees are required to be disclosed up front, by law, so there’s never a surprise and never an obligation before you decide what’s best for you.

This is a tiny list of some of the things I do. If you’re looking to buy or refinance your home, always do your homework and ask questions, because you need to be sure that the mortgage you get is right for your needs – both today and down the road.

I do this stuff every single day. I get paid to help people. In fact, it’s the only way I get paid.  I love what I do, and I’d love to help you.

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. Find it here.

A lot of young adults are eager to break out of their parents’ houses as soon as they finish school. Most rent, but more and more young adults are intrigued by the idea of owning and either renting or sharing costs and accommodations. It’s an exciting idea that begins to build asset wealth early, but first time home ownership comes with a set of challenges that you need to plan for if you are going to be successful.

The best place to start is by understanding how lenders think and act, and what they expect from an applicant.

Credit companies are in the business of making money; a lot of money. Most of it in the form of high interest charges on balances not paid back within 30 days. So, as we look at another Christmas spending season in our rear view mirrors, I thought I would share a few credit tips to help reduce the future cost of using your credit card.

If you can’t pay the full bill, always pay the minimum.

Sounds obvious, but you would be surprised how many times a person misses the minimum payment and how that hurts their credit score. Little things really do matter when it comes to protecting and improving credit scores.

If you pay the minimum payment after its due date, you are late. Not only are you paying additional high rate interest on your balance, but your credit card company also reports your late payment to credit agencies like Equifax or Trans Union. These services rate your credit worthiness and share this information with any lender you may hope to deal with.

 When you pay on time, you are rated at “R1”, which is perfect. Pay 30 days late? Get an “R2” rating. Pay later than that, and it keeps getting worse. The more frequently you pay your bills late, the worse the impact on your credit score, and that impacts the terms upon which you can borrow. A credit score of 800 is excellent, 675 is average, and below 600 is problematic when you need to borrow money.

Always carry less than 70% of your card limit as your balance on your card

Here’s a secret not many people know. Even if you pay on time and are “R1” rated, when you carry more than 70% of your available credit limit as your balance, credit bureaus use an algorithm that will end up actually rating you as a higher credit risk, and this will negatively impact your credit score. Do everything you can to not carry an outstanding balance. If you can’t pay your full balance, keep your balance under 70% of your credit limit. If you can’t do that, be sure to pay your minimum on time (or early). When you do these things, you will improve your credit score. That will give you better borrowing options and save you a ton on fees.

Today mortgage lending has become almost completely dependent on having a good credit score. If you have any questions on credit scores or mortgages, I’m happy to help you answer them. 

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. Find it here.

Buying your first home is an exciting event. In fact, for most of us, it’s the most significant purchase we may ever make. As a new homeowner, you put a lot of work into buying the right home for you at the right price and getting the best first mortgage possible, but there are other costs you need to plan for. If you don’t, you could be in for a bit of a rude awakening. I’m going to show you how to avoid this additional financial stress.

Getting your mortgage pre-approved has some obvious benefits:

1. When it’s done right, you get am accurate understanding of how much home you can afford. That’s important, because of you stick to a plan that you can afford, you take a ton of future stress out of home ownership.
   
   
2. When you get pre-approved, you lock in rates so that you are protected from any unsuspected rise during the buying process. Again, stress-relieving.
   
   
3. You tell sellers that you’re a serious buyer, and given how competitive the property market has become, this can be advantageous to you.
   
   
4. You are not obliged to work with any lender, even the lender who pre-approved you, so there’s really no reason you shouldn’t find out where you stand in the eyes of lenders, and doing so before you start house hunting can make the process way more efficient and way less stressful.
   

Now that’s all good, but here’s what you need to know about the process to really take full advantage of pre-approval:

• Different lenders act differently. Some pre approvals offer rate guarantee, but don’t look into your qualifications until you go to buy.  That could set you up to be rejected when you go to buy. To avoid disappointment, be sure you are actually pre-qualified and not just getting a rate.
  
• The Devil is always in the details. We offer the best advice available, but in the end, the lenders underwriter has final say on what you qualify for. Lenders always look at what you have for down payment, your employment record and income, your credit rating and your debt load. Accuracy always makes the process and results better.
  
  
• How you act after pre-approval matters. Being pre-approved is step one. Maintaining good standing after pre-approval is a critical step 2. If you miss payments, increase your debt or mess around with your down payment money, you could quickly find yourself not approved. This stuff really matters to lenders, so forewarned is forearmed.
  
  
• Pre-approval don’t necessarily mean best rate. Getting pre-approved actually costs the lender money, so those costs find their way into your rate. The best rates are often found for 30 – 45 day property closings, so check your rate then and if you don’t like the rate compared to what the market is offering, simply ask the lender to improve it. If they won’t, you can apply with another lender, but remember; your mortgage is never simply about the rate. Terms matter, even more than rate sometimes. When you compare your rate make sure you compare your terms as well, for a tiny advantage in rate may come at the price of better terms, and that’s not a smart decision.
  
  
• Let me restate: features and details matter. Not all lenders are created equal and that means that not all pre-authorization is created equal. Every borrower has a unique set of circumstances they are faced with and choosing a lender should always come down to a combination of rate, features and terms. Some people need long rate holds. Others want the deepest discounts available, and some simply want better repayment/pre-payment terms and features in a mortgage. Add it all up and one thing is clear; doing your homework with the help of a great mortgage broker can only improve your experience and your results.
  

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. Find it here.

A skilled mortgage professional deals with multiple lenders. While there are options other than mortgage brokers available, the simple truth is that the mortgage industry revolves around Canada’s big banks, and it’s hard to imagine any option fully out-flanking our six big banking brands. Banks control funding markets. They own trusted brands and they possess extraordinary resources. And while the banks competitors will continue to earn decent slices of the lending market, I believe that banks will retain their dominance in mortgages.

So why am I telling you this?

Because Mortgage brokers are experts at dealing with banks, we deal in ways that most borrowers can’t. A skilled, full-service mortgage professional offers a compelling combination of experience and the ability to deliver one-on-one personalized service that mortgage customers, including income property investors, leveraged investors & credit-challenged borrowers can gain greatly from.

We bring a level of competition for your mortgage business to the table that the average borrower couldn’t hope to on their own. And even if you are traditionally comfortable working directly with banks, we get the banks and our other lenders sharpening their pencils that much more for the opportunity to do business with you. In other words, we keep lenders lean, so to speak, in that the deals and terms we expect from them.

At the end of the day it really comes down to this: who’s working for your best interest? Put us to the test and we’ll show you just how much easier life gets when you have a great mortgage broker on your side.

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. Find it here.

Many people don’t really understand what a mortgage broker is or what they do. 

The simplest way I can explain a mortgage broker (and believe me, we are not all created equal) is that I find and secure the best mortgage rates and terms for my clients based on their goals and situations by making sure that quality lenders have to compete for the right to your business. In short, I save you money and reduce stress. 

As this blog grows, we will be sharing the best of what we know so that anyone following us will be fully informed to make great decisions when it comes to mortgage and personal finance. For today, I’m going to share some key mortgage broker insights with you. 

1. In all but rare cases you don’t pay for my services, the lender does. Knowing that fact, you should also know that we’ve been doing this kind of work – successfully – for more than 30 years, which means that when it comes to the bottom line, your bottom line rules, and we’re great at getting our clients superb mortgage options and financial solutions that most folks couldn’t hope to on their own. And we only get paid when we get you what you need, so we are completely motivated by your success.
   
   
2. We have relationships with dozens of lenders, which means we have a lot of lenders competing for the right to lend to our clients. We actively negotiate with multiple lenders with one goal; to get the hungriest of the best of them to give you a superior mortgage deal. Dealing with just your bank to avoid the hassle of trying to do what we do might seem easier, and most of us hate change to begin with, but we take all of that stress off of your plate and you’ll be surprised how much money we can save you. Like really surprised.
   
   
3. When I wrote that all brokers are not created equally, I wasn’t kidding. Experience really counts in this business and few can come close to our experience. We do things right, which means we have solid, longstanding relationships with the best of the lending industry, experience with every imaginable client situation out there, and a history of successfully helping clients in challenging situations. We can stick handle like few others can. Again, I share this for the simple fact that no matter what your reasons or situation, you still want the best mortgage solution possible, and our experience really matters in the Mortgage industry.
   
   
4. We are absolute detail hounds. Great rates are what everyone is after, but a low rate without great terms and conditions can be costly for you in the long run.  A great broker forensically goes through the details of any mortgage to ensure that rate and terms are the best for you and your situation. Again, our experience offers borrowers a massive level of security. Rate is important, but your future financial health is just as important. Fear any broker who doesn’t think this way.
   
   
5. Sometimes it’s about low rates, but sometimes it’s about fixing bigger problems. We are exceptional at what we do, but sometimes we have clients that are really up against it for a host of reasons. For example, if you have a really poor credit score and a history of unpaid bills, you may qualify for a mortgage to help you reset things, but you won’t qualify for the kind of rates that lenders offer tier 1 credit ratings. If your goal is to get the lowest rate, we may not be able to help you. If your goal is to turn things around and legitimately rebuild solid credit worthiness for yourself, we absolutely have solutions.  Again everyone’s situation is unique, and a great broker can help just about anyone who’s serious about planning a better way forward. But, to be clear, we do not walk on water.

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. Find it here.

When it comes to mortgages or home equity loans knowing who to trust is every bit as important as knowing how to get a great rate. Sure, everybody wants the best, lowest rates, but everyone’s situation is unique and not all mortgages are created equally. Like a lot of things in life, the devil is in the details. You can trust our mortgage advice and tips. 

For instance, most people think a mortgage is little more than a commodity. Most people are wrong. A mortgage is a complex, detailed agreement and navigating one without a trusted advisor is a scary thought that can cost you a bundle. Plus, picking a mortgage without using all the information available to you can be a deadly mistake. We’ve seen many people withhold key information only to secure a new mortgage or refinancing that is inadequate for their needs, which means that in a couple of years, they can wind up in an even worse financial situation. Don’t be that person.

A mortgage or a home equity loan is an incredibly powerful device that can help you improve living, expand property ownership, and to better manage debt - but only if you secure the kind of mortgage that is connected to a plan that’s perfect for you and your goals. A good mortgage broker lives to show you the way to plan your financial future by securing the very best mortgage solution for you, and the best part: in almost 100% of the cases, you don’t have to pay a cent for this help.

Drop us a line or check out this link. We’ll work our butts off for you and we’ll get you the right mortgage the right way.

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. Find it here.

The short answer is yes, there’s never been a cheaper time to borrow money in history. The longer answer is yes, but only if you’re willing to follow a better mortgage plan.

A good mortgage broker can be a very powerful ally, but as much knowledge as we have to offer and as many lenders as we have bidding for your account, we still have limits. For example, if you’ve refinanced before and you are in the position to have to do it again, we can help, but the solution might not be instant or easy.

Every mortgage shopper in the country is seeking the lowest mortgage rate possible, but be careful: sometimes the lowest rate may not get you the best mortgage.

For example, many folks automatically look to the banks we’ve known our whole lives for their lowest rates. While banks may post low mortgage rates for banks, they often aren’t the lowest rates in the market, and unless you work with someone like a mortgage broker, you probably wouldn’t know that.

You are not alone in your search. Mortgage brokers live to hunt down the best mortgage rates and terms for their clients (good one’s do, at least) Here’s how a brokers mind works: in almost all cases, it costs you nothing for our services. Zero. We have many lenders we negotiate with on your behalf, so at the very least, working with a broker will get competing lending institutions battling for the right to provide you with a mortgage. Do you seriously believe that simply approaching one bank can compare when it comes to saving you money?

And the better your credit score, the more leverage you have when it comes to securing the very best rates and terms out there. Plus, the larger the down payment you can afford = even more leverage. But remember, it’s not just about rate. Mortgage terms really do matter. It really serves you great advantage to shave basis points off your mortgage if potential future penalties and fees in the mortgage completely nullify those initial savings. Again, a good mortgage broker will show you where the mines are hidden.

Mortgages are a great opportunity, but only if you do your homework and really understand all aspects of what makes a mortgage right for you. As mortgage brokers, we breathe this stuff daily and we can’t wait to share what we know. Give us a call or check out our confidential online mortgage form. The worst that can happen is you’ll save a bunch of money. Your money.

Grant

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.  Find it here.

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.

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)

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 

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/

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.

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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