ANOTHER BANK ‘HORROR’ STORY TURNED GOOD

We recently had new clients come in who had sold their home firm and purchased another based on a bank pre-approval.

Initially they were assured “No Problem” by the bank and all seemed fine until they realized the bank was taking too long to get them an approval for their purchase financing. They had to get an extension on their financing (offer) condition only to be told later that they had been declined.

What had happened was that the couple (having sold their home) decided that since two of their credit cards were going to be paid off from the proceeds that they didn’t need to make the last few payments.

Wrong! These two delinquencies cost them dearly. Their credit scores plummeted below the acceptable minimum effectively turning them into bad credit risks from an institutional lender standpoint. Now they forfeited the chance to get a prime institutional mortgage.

They only remaining option was for them to take a private mortgage at 8 per cent or more than double the going rate. They wanted the new house that badly so they proceeded with the knowledge that within a year we could get them into a low rate mortgage.

Fortunately they had good jobs and income and could afford it, but what a hard lesson for sure.

The bottom line is this. Bank pre-approvals typically are not worth the paper they are printed on if no credit check is done. Things like this can go wrong, really wrong and present a very nasty and unwelcomed surprise.

When we give you a pre-approval you can count on it since we are very thorough which includes a credit review, proof of employment and income. In fact we are pre-approvals are guaranteed and only subject to purchasing a property, the quality and marketability of which is satisfactory to the lender. Your rate is also guaranteed in advance and you are protected.

If you are thinking of selling your home or you are in a buying mode please call us first for peace of mind protection on your next purchase.

                                                                      
For most homeowners, figuring out your mortgage penalty can be like solving a Rubik’s Cube. Mortgage penalties see to be written in a language similar to legalese. The sad fact is that you don’t realize how costly it can be to break your mortgage until you have to, are forced to, or if you decide to refinance or sell your property.
Most don’t ever think they will ‘Break’ their mortgage when in fact over half end of doing so during the term. Life happens, changes occur and when they do your mortgage penalty from the banks cannot just be overwhelming, they can be (and usually are) shocking.
Unfortunately the banks play games. They use the ‘Posted’ rate to calculate your penalty when in reality posted rate has nothing to do with your mortgage. This allows them to get more money from you. For this very reason most bank penalties anymore are IRD’s or interest rate differential and not simply a 3 month interest penalty.
Please do not be fooled on any long term ‘Relationship’ or perceived comfort you may feel you have with your bank because any value from it simply does not exist anymore. The Banks want you to choose a fixed rate over variable so they can nail you with a huge penalty if you have to break your mortgage. You see, you can only be charged a maximum of 3 months interest on a variable mortgage so please do not fall into the trap they have set for you.
You may feel more comfortable choosing a fixed rate with fixed payments and in dealing with a local branch versus a mortgage broker, but it will end up costing you a bundle for such misplaced trust. The problem is in doing so you do not receive professional advice and counsel we provide in your best interests.
Don’t get me wrong, we are not advocating fixed versus variable, it’s just that you may not be aware of several other important benefits of going variable. We also want you to know that any penalty from a mortgage we arrange for you is not only fully spelled out to you, but we will show you that our penalties are much much lower than any of the banks’ penalties which are sometimes triple and therefore very punitive.
Folks experts in our industry are starting to speak out to expose such practices and recently have even stated that bank mortgage penalties are “Bordering on Fraud”. Yes it’s that serious.
Please do not leave yourself exposed to such a potential negative consequence. Look out for the fine print or better yet call us first for your next mortgage need. 
We are your WATCHDOG when it comes to mortgages.
 

This is but one of many adages that suggests we avoid  trying new things  so that we stays with and keep the good old ‘status quo’.  Another one is “Better To Be Safe Rather Than Sorry”. 
In this hectic world today we are bombarded with messages of ‘Caution’. We are ‘fed’ a steady diet of reasons not to “Rock The Boat”creating a mindset which is based in ‘Fear’ and ‘Negativism’. For these reasons our human condition or tendency is to avoid change. In fact most people dislike ‘Change’ and even fear change.
These are people who continue to believe that “The Bank is their friend”. “The Bank Has Always Been Here For Me” they say. In reality they can only say this if and only if they have never had a problem that involved approaching their bank to help them, only then to find out that the bank is not their ‘friend’ any longer. The banks are always eager to ‘serve’ us but when we have a problem such as job loss, separation, divorce, injury, disability etc., we are seen as ‘risky’ to them. Then the response is “Sorry We Cannot Help”.
But it goes much deeper. We are all aware of the relentless cycle of banks to increase ‘Profits’.  They are doing a great job of it aren’t they. We continue to see record profits year and after, pretty much without exception. What other industry can produce so much profit. Clearly our big banks have an unquenchable thirst to keep profits rising, seeming without fail. How can this possibly be? It is not ‘normal’ is it? It goes against conventional thinking does it not? They must be “Getting Away With Something” one might surmise.  
The truth is that every bank’s ‘modus operandi’ is to maximize profit by getting as much from the customer as possible. Bank staff is trained to accomplish this and they are required to meet quotas designed to achieve this end. 
Our role is to create consumer awareness of bank practices and products that are widely considered to be shall we say ‘Opportunistic’. Last week we wrote about excessive and punitive bank penalties (including how they are calculated) versus the much lower penalties our lenders require when a mortgage ‘investment’ is terminated before its contractual term/maturity. We have also written about bank collateral mortgage products that are also designed to extract maximum profit while at the same time giving the banks more control over the borrower than ever before, all this (apparently) without full and proper disclosure to the client. Such lack of disclosure is now commonly seen in the media.
Making a ‘change’ is a good thing to do when one has taken the time to understand the real benefits. ‘Informed’ Canadians are choosing mortgage brokers more and more as they realize we are looking out for your best interests and we can invariably provide you with the best solution and experience.
For your next mortgage, please call us first. You’ll be so glad when you do!

BETTER THE DEVIL YOU KNOW, THAN YOU DON’T?
This is but one of many adages that suggests we avoid  trying new things  so that we stays with and keep the good old ‘status quo’.  Another one is “Better To Be Safe Rather Than Sorry”. 
In this hectic world today we are bombarded with messages of ‘Caution’. We are ‘fed’ a steady diet of reasons not to “Rock The Boat”creating a mindset which is based in ‘Fear’ and ‘Negativism’. For these reasons our human condition or tendency is to avoid change. In fact most people dislike ‘Change’ and even fear change.
These are people who continue to believe that “The Bank is their friend”. “The Bank Has Always Been Here For Me” they say. In reality they can only say this if and only if they have never had a problem that involved approaching their bank to help them, only then to find out that the bank is not their ‘friend’ any longer. The banks are always eager to ‘serve’ us but when we have a problem such as job loss, separation, divorce, injury, disability etc., we are seen as ‘risky’ to them. Then the response is “Sorry We Cannot Help”.
But it goes much deeper. We are all aware of the relentless cycle of banks to increase ‘Profits’.  They are doing a great job of it aren’t they. We continue to see record profits year and after, pretty much without exception. What other industry can produce so much profit. Clearly our big banks have an unquenchable thirst to keep profits rising, seeming without fail. How can this possibly be? It is not ‘normal’ is it? It goes against conventional thinking does it not? They must be “Getting Away With Something” one might surmise.  
The truth is that every bank’s ‘modus operandi’ is to maximize profit by getting as much from the customer as possible. Bank staff is trained to accomplish this and they are required to meet quotas designed to achieve this end. 
Our role is to create consumer awareness of bank practices and products that are widely considered to be shall we say ‘Opportunistic’. Last week we wrote about excessive and punitive bank penalties (including how they are calculated) versus the much lower penalties our lenders require when a mortgage ‘investment’ is terminated before its contractual term/maturity. We have also written about bank collateral mortgage products that are also designed to extract maximum profit while at the same time giving the banks more control over the borrower than ever before, all this (apparently) without full and proper disclosure to the client. Such lack of disclosure is now commonly seen in the media.
Making a ‘change’ is a good thing to do when one has taken the time to understand the real benefits. ‘Informed’ Canadians are choosing mortgage brokers more and more as they realize we are looking out for your best interests and we can invariably provide you with the best solution and experience.
For your next mortgage, please call us first. You’ll be so glad when you do!