The Meaning of Home

Every once in a while you find a story that touches your heart.  As a mortgage broker we get caught up in the day to day activity of mortgages, not homes.  As I heard this story, it brought home (no pun intended) the vision of why I am in this business.

At  CAAMP’s recent symposium in Winnipeg, Genworth talked about the contest they run called “The Meaning of Home” in conjunction with Habitat for Humanity.  Every year students in Grade 4 to 6 are granted entries in the contest whereby they complete a story about “The Meaning of Home”.  We take a lot for granted in our lives but this story really hit a chord on what a difference we can have in people’s lives.  Here’s the story:

Edie, Grade 4 Calgary, AB

Hi! My name is Edie.

I was born in Ethiopia and lived there until I was 7. In Ethiopia you do not have much food, water, clothes or shelter. Every day I would walk to the river and stand at the edge getting water in my bucket. Then I would walk all the way home with the bucket on my head so I could use the water to wash clothes, faces, dishes and give water to plants. At the end of the day I would use the water to make dinner. We would all sit together and have a great time! I did not go to school, only my brother did. In Ethiopia most girls stay at home and let their brothers go to school. There was a lot of love in my family but I was having a hard life.
My Birth Mom told me that she was sending me to a place where they would take care of me better. When I was at the place, Mom adopted me and brought me to Canada to live a better life. Now I am in a perfect school with friends. I am in grade four and I have the best education I could possibly imagine. Water comes out of a tap and I know it is clean and safe. I am having a great life and I never want to leave it because of all the love everyone is giving me.

With all that I have been through, home is different to me than to a lot of other kids. Home means a person, place or thing that makes you feel good when you are around them. It is a place were people love you and you love them back. Home means a person you can cry on when you are down. Home means a person you can tell secrets to. Home means a person you can jump up and down with when you are exited. Sometimes things in life can be hard but having a good home can make a difference.

Home means fun, love and care!

This story kinds of puts things in perspective for all of us, for that I thank you Edie.

If you are a teacher and would like to involve your students in this activity, please follow this link.

10 year mortgage rates, understanding the odds in your gamble

Since interest rates are at historic lows many consumers are asking questions about 10 year mortgage rates.  This short video gives you an understanding of what you need to understand to ensure you get the best odds on your bet, a 10 year mortgage is like placing a bet.

Here are few other keys points about 10 year mortgages:

1)  After the first 5 years of a 10 year mortgage, Canadian law states that the maximum penalty is 3 months interest payment and not Interest Rate Differential (IRD) like 1 – 5 year mortgages.

2)  Before you commit, have an Accredited Mortgage Professional assist you in the calculation in the video.  This will help you understand what your break even interest rate is in 5 years time.

3)  10 year mortgage rates are not very competitive in today’s environment, a mortgage broker can be a huge advantage for you, your bank or credit union may not be able to be very competitive.






Similar topics:  Understanding Mortgage Rates 

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates
10 year mortgage rates


Happy New Year 2012

It’s the time of the year where everyone has made New Years resolutions and set goals for 2012.  As Canadians we have been fortunate in 2011 with our economy when other parts of the world like Europe and USA have faltered.  We must be more diligent and focused in reducing high interest debt (personal loans, lines of credit and more notably credit card debt).

If you own a home and have a mortgage you will want to check out this video titled New Years Mortgage Strategies to make the most out of your financial position in 2012.

All the best in 2012 for your goals, remember the difference between a dream and a goal is taking action, I would be delighted to help you with that.

Please email/text/tweet/message me if you would like a budgeting tool or a form to increase your mortgage payments.


Happy Thanksgiving Winnipeg


I know what I’m thankful for…
The child who is not cleaning his room but is busy playing or practicing hockey, football, golf or baseball and therefore off the streeets.
For the taxes that I pay because it means I’m working.
For the mess to clean up after my party because it means I’m surrounded by loved ones.
For the clothes that fit a little too snug because it means that I have enough to eat.
For the lawn that needs to be mowed, the windows that need to be repaired and the gutters that need to be cleaned because it means that I have a home.
For all the complaints that I hear about the government because it means that I have freedom of speech.
For the parking spot that I find at the far end of the lot because it means that I’m capable of walking and I have transportation.
For the steady economy we enjoy in Manitoba and jobs which help us provide for our families.
For the return of the Winnipeg Jets because we all live with passion for hockey and community.
For my Manitoba Hydro gas bill because it means that I’m warm.
For the huge pile of laundry because it means that I have clothes to wear.
For the weariness and aching muscles at the end of the day because it means that I’m capable of working hard.
For the alarm that goes off in the early morning hours because it means that I’m alive.
And finally, for a profession that allows me to make a difference in people’s lives.
Happy Thanksgiving Winnipeger’s, it will be a Thanksgiving to remember!

The Value of Good Mortgage Advice

A recent situation arose where a client was preapproved for a new home purchase by their bank.  Great, right?, not necessarily, they owned an existing home and were told by the bank representative that they should sell their home first and then purchase a new one.  They were moving down in price so the client assumed this was a no brainer.  The bank representative did not do the diligence in exploring their current situation.

They proceed to sell their home, agree on a price and then go out looking for a home.  They would have some equity to purchase a home however, were hoping to buy a new home with 5% down payment as pre approved by the bank.  The only catch in this situation is that in Canada an insurer(a 2nd step in the approval) needs to approve the mortgage with less than a 20% down payment.  The clients were not made aware of this and their application was not approved with 5% down payment.  Instead the insurer requested 10% down payment with some conditions that the client had to meet before the bank could get it approved.  The clients are now scrambling to look at options so they can own a home rather than rent.

The moral of this story is as follows:

1)  Get a second opinion after meeting with your bank.  The experience and knowledge of the bank representative may not be as good as you think.  Ask about their experience in mortgages and how many times they have handled a situation like yours.  A mortgage broker with the Accredited Mortgage Professional (AMP) designation is committed to ongoing education and professional development, a great first step in identifying someone who is committed to the consumer.

2)  Speak to your realtor about your options.  A professional realtor will review the options with you and team up with your mortgage advisor to assist you in a smooth transaction.  Making an offer, “subject to sale of your existing home”, may offer you the necessary security to ensure your new home and fianancing is approved before you sell your existing home.

Good advice from a team of professionals acting in your best interest is the key.

Realtors Beware

There has been a lot of discussion in the mortgage brokerage community over the last 2 years about the practice of sending in “dummy” mortgages to CMHC or Genworth for an approval before an offer to purchase is written.  Professional and ethical mortgage agents do not get involved in this practice.  As a realtor, if you ask for this to happen or knowingly are a part of this transaction, you need to be aware of this. 

CMHC is actively investigating these instances and as I understand it, will take necessary action against those who go against the rules.  As an Accredited Mortgage Professional, we need to have an ACCEPTED Offer to Purchase in order to proceed with an application.  Sending in a mortgage application without it is bordering on fraud. 

Realtors may not be aware of this and may become an unknowing party in this type of transaction.  You are now officially aware and will be judged by who you associate with. 

From one professional to another!

Manitoba Mortgage Broker Regulation

Great news for the mortgage broker industry when it was announced that Mortgage Broker Regulation would be introduced as soon as May 1, 2011.  For consumers this is good news, protection one of the biggest purchases in your life is important. 

These proposed regulations would require:

1.)  Mandatory licensing,

2.)  Minimum education requirements,

3.)  Errors & Omissions insurance. 

All of these are an excellent step in the right direction for the mortgage broker community and consumers in Manitoba.  Once regulations are finalized they will be issued by the Manitoba Securities Commission.

Falling in love

Have you fallen in love with a house?

Have you ever fallen in love only to be disappointed? This week a family was looking to purchase a home.  They were pre-approved by a mobile mortgage specialist at a major bank for up to $235,000.  The real estate agent and family continually stayed in touch with the mobile mortgage specialist to make sure everything was okay as they had made 7 offers on homes. They finally had an offer accepted on the 8th home they offered. It was accepted by the seller and they had 48 hours to arrange their financing, but they were pre-approved – so what could go wrong?

In actual fact they weren’t pre-approved, based on credit history and obtaining proper employment information up front. They could have been steered in a path to strengthen their position or look for a smaller home.  Imagine the realtor’s disappointment when they found they couldn’t get an approval.  They had just spent hours upon hours with this family, not only wasting their time and the family’s time but also the time of other realtors and sellers of homes.

My advice to realtors is this:

1 Be confident in asking the purchasers if the bank, mortgage professional, or mortgage broker actually reviewed their credit score and credit history with them.

2 Did they also ask for their employment letters, pay stubs?

3 Did they verify the down payment? (some down payments don’t qualify)

If they didn’t ask for this information, your purchasers may fall in love only to have their heart broken.  Don’t let it happen, make sure they are really pre-approved.

New Mortgage Rules – Part 3

For those that heard the news this week, Finance Minister Flaherty decided to make some more changes to “cool” the housing market.  At first glance this got a lot of press but when I really looked at it and considered the impact in our Winnipeg market, this will likely affect 2 – 3% of people with or looking for a mortgage.

Those most affected will be first time home buyers looking to purchase at the maximum of the range they can afford.  These people may be left with no options other than a 5 year term to qualify.  Let me explain, today if you wanted a variable rate mortgage or a term less than 5 years for a $200K mortgage, your qualifying payment would be $1090.  If the same consumer on a $200K mortgage, decides to take a 5 year mortgage, their qualifying paymnet would be $910, a difference of $180.  On a $300K mortggage, the difference is $269.  These amounts are due to the fact that amortizations have been reduced from 35 years to 30 years(only for those with less than 20% down payment)  For those purchasing in a hot market like Winnipeg with less than 20% down payment, you need to be aware of all these changes and how it will impact your purchasing power.   The importance of a proper pre approval is even more important when you are competing against other home buyers.  If you don’t have a proper preapproval, you may end up falling in love with a home only to find out you don’t qualify in the end.  I have seen this too much when consumers are pre qualified at the bank.  In essence the bank doesn’t obtain the information and documentation necessary to help the consumer and instead gives them an large amount that they don’t necessary qualify for.  An Accredited Mortgage Professional will work with you to make sure you have no surprises or disappointments.

These rules come into affect on March 18, 2011.  Please contact me if you require further clarification.

Let’s hope that future government intervention applies to credit cards and unsecured lines of credit.  Home purchase is very stringent and structured with documentation and qualification standards however, credit cards do not require the same type of standards.  Once a consumer moves into their house, assuming they qualify at the maximum amount, they can go out and obtain thousands in additional credit card limits and all they would need is a good credit score to qualify.  How can that be responsible?  If the government is really trying to protect consumers from themselves, let’s look at credit card debt next time.

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Crystal ball repairs not needed

Over the last few years I have been asked to make predictions on interest rates by the press and consumers.  Since my Crystal Ball has been broken for many years I have been reluctant to stick my neck out and instead take the wishy-washy answer of  “it depends”.  Most people don’t like the answer I give, but then it leads to a discussion about them.

The 3 questions I ask consumers before considering a variable rate mortgage are highlighted in this article at CTV News . This really helps me to understand their interest rate risk tolerance.  If there is some tolerance to risk, the second part is the “Numbers.”  I love numbers and have been tinkering to develop a tool to help every consumer assess their current situation and come up with a comparison of Fixed vs Variable Rate based on their situation.  We recently stumbled across a spreadsheet that will help us do the same calculation.  With the last 5 consumers I have compared the fixed vs variable rate calculations with, all have found the information very useful in helping them make a decision.

This was a recent interview Rob Carrick conducted with Will Dunning – Economist for Canadian Association of Accredited Mortgage Professionals which outlines the numbers of Canadians at risk if interest rates increase featured at Globe and Mail.

Canadian’s have been very responsible and should be able to weather any rate increases in the future.  A small percentage could get caught if they don’t act soon.  With fixed rates dropping and variable rates increasing the spread between the two is returning to normal.  This means the savings in Variable rate mortgages is not as a large as it once was and presents more risk if rates increase.  Trust the advice of an Accredited Mortgage Professional, let us give you a no obligation assessment of your situation to help you with the decision of fixed or variable.

No Crystal Ball needed!

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