Tag Archives: winnipeg mortgage broker

Happy New Year 2012

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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.

 

The Value of Good Mortgage Advice

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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.

Falling in love

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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.

Why I do what I do!

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The first question of a prospective clients mouth is “What is your best rate?”.  This always leads to a discussion and I never really answer the question right off the hop because I’m not wired that way.  I saw a recent stat that says 10% of consumers shop based on rate and 90% shop based on value, I need to hang out more at Starbucks because those consumers are looking for value, it’s definitely not price.

When I entered this business I came into it because I want to make a difference in people’s lives through education and communication of my previous experience and knowledge.    To me it’s not about the transaction of a mortgage it’s the life long relationship of purchasing a home and future homes, thereby fulfilling goals and dreams, I love this business.  I see many people advertise on a rate that seems unreasonable only to deliver no value, just a product.  If that’s what you as a consumer want, I’m not your guy, it’s the way I am wired.

I conducted my first Mortgage University course last night because it’s what I love to do, educate and inform consumers.  The best sense of accomplishment I get is when a consumer has had no surprises through the whole process.  So many consumers come to me with inaccurate information from family, friends, etc, that the best way to help them is educate them.  I plan to continue my focus on education so that I can “Make a Difference”.

I would like to thank a friend of mine who recommended a specific website that awakened and help me understand “why I do what I do”.  This website has a video which he recommended I watch.  He gave me enough teaser information to peak my interest.  This video is Anthony Robbins whom many people know.  I have seen him in person and never left with much information, I was unimpressed as he just seemed to try to motivate.  This presentation and video Anthony gave is the most relevant piece of work of his to me.  I hope you have the same takeaway.

Thanks Darren Sawchuk, a friend is someone who knows you better than you know yourself, for that I am grateful!

Fixed or variable

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FIXED OR VARIABLE? This is a question that comes up increasingly in conversations with new or existing homeowners. My answer is always that it depends on their circumstances. There are 4 main factors to consider:

1. What is my risk tolerance? If you don’t like to take risk and want the sure thing, fixed rates offer you the comfort and security of knowing your payments for the next 3-10 years. Sometimes I refer to this as the sleep factor, does it keep me awake at night, if it does consider a fixed rate.

2. What is my current debt load? If you have tight cash flow and are concerned where you might be able to squeeze out more money for higher payments, you may want to consider a fixed rate. The other factor that can affect your debt load is job loss, reduced income, adding children to your family plus other factors. The opposite can be true if you are well educated and the prospects for your career and profession has a good future. Variable rate mortgages can save you money now if you are in this situation.

3. Do I know what is happening with rates? If you read the business section of the paper daily chances are that you know what is going on with interest rates. If you have a mortgage broker that communicates with you regularly, you have the advantage of being on top of this. I provide regular emails with rate updates and Bank of Canada announcements to keep consumers informed. Ultimately, it is their decision if and when they decide to lock in if they so choose.

4.  Consumers with equity in their home may feel more comfortable in choosing a variable rate mortgage.  If you have less equity and you get caught with rates increasing, you may end up with less equity.  This will be explained in a later post.

If you have been in a variable rate mortgage over the last century, you have fared better than someone in a fixed rate mortgage with your savings in interest. At some point this economic cycle will end and those with fixed rates below 5% will be seen and having made a good decision. The question is when is this time. In the investment world, market timing has never been viewed as a strategy to live by, the same is true in mortgages. If you wish to receive rate updates regularly, please let me know.