KNOW WHAT’S SECURED AGAINST YOUR HOME
Most people don’t know it.
It’s not disclosed at the time of sale and comes as a shock at time of refinance. And it
happens all the time.
Nancy and John did a kitchen and bathroom renovation and put it all on their credit
cards and (LOC) line of credit. The cost was $57,000. Their plan was to refinance their
mortgage when all was done. But they hit a stop sign at the bank.
Having had sufficient equity to refinance, their refinance was approved only to be
declined at the last moment (at closing). What happened was that two liens had
previously been registered (by the air conditioning and water conditioner companies)
against their property which the bank insisted needed to be paid off because their debt
service ratios were too high. They couldn’t borrow any more on the mortgage from the
bank and came to us to see if we could find a solution because their credit card and
LOC payments were killing them.
We went to work. Because they had excellent credit we found a prime lender (we have
many lenders and options than the banks) who would accept their higher debt service
ratios and approved them at the higher amount to be able to pay off the liens.
They were thrilled with the new mortgage with an incredible rate of 2.05% which
included a line of credit facility. This was over a half per cent less than what the bank
But there was one more issue. With the two liens added to their new mortgage rendered
it in excess of 80% based on bank value thus making it ‘high ratio’ and would have
required an extra mortgage insurance premium. Fortunately we were able to find them a
appraiser who could support a higher (than bank) ‘after renovation’ property value
keeping the mortgage in the conventional range avoiding any insurance premium.
We see situations like this all the time. Our advice to you whenever you buy major
appliances that you ask the supplier if the loan will be registered against your property.
If the answer is yes, it’s best to find another option. Calling us would be a good start.
Month: October 2015
COME CELEBRATE OUR 15TH YEAR ANNIVERSARY
Dear Customers, Friends and Community Partners please join us on Sunday October
18th for our Customer Appreciation Day & 15 Year Anniversary Celebration from 1 to 4
pm at our front parking lot on Tower Street.
What fun it will be for all, and especially for us to see you and thank you personally for
your patronage over the years. Also an opportunity to catch up, to share, to meet new
people and to look forward to the future together.
It’s really hard to believe that we have been serving fellow citizens of Wellington, Centre
Wellington and Wellington North Counties for a decade and a half already. How time
flies by doesn’t it?
We continue to love what we do more than ever. It has been so rewarding to have
helped people in difficulty, improve their lives and to assist the rest of the spectrum of
folks from all walks of life.
It has been a trip for sure and one that will endure for years and years to come, as our
business begins its next chapter growing as a family business with daughters involved
going forward to carry on helping, caring, giving all they can to make a positive
difference in people’s lives.
We are having a professionally catered barbecue, face painting and will be giving away
free pumpkins along with draws for great prizes including a free vacation for one lucky
To attend please RSVP by calling or emailing us. We look forward to seeing you then.
DISCOUNTED RATE MAY NOT BE DISCOUNTED AT ALL!
A recent client contacted us to improve their cash flow after a major renovation. They had used a loan and credit cards to complete the reno and now wanted to consolidate (lower) payments and improve cash flow. In other words, they were finding it ‘too tight’.
Their original bank rate was 2.99%. The bank offered them a new rate of 3.49% which they found uncompetitive and so they came to us. We did our analysis and determined that we could lower their payments by over $1,000 per month. They were delighted. But hold on. After asking the bank for the mortgage break penalty, they were told it was going to be $17,843. The calculation was based on the difference between 4.64% or original posted rate and 2.99% the discounted rate. A difference of 1.65%. By the way ‘Posted’ rate is fictional.
We showed them what the penalty would have been if we had arranged their initial mortgage through our lenders and they were shocked. It was $4,228 a difference of $13,615. Wow.
By adding the bank penalty onto the ‘so called’ 2.99% ‘discounted’ rate the effective rate was 3.79% meaning this was the effective or actual cost of the bank mortgage. And of course it represented IRD not 3 month’s penalty.
So be careful when dealing with the banks folks. Better yet, come to us because we protect you. In most cases our lenders charge 3 months interest versus interest rate differential and even when IRD applies, our our mortgage break penalties are are typically up to 75% less. A HUGE SAVINGS.
Consumers continue to be OB-SESS-ED ….the act of being preoccupied or fill the mind continuously, intrusively and to a troubling extent… BY RATE, and continue to be caught in the cross-hairs of bank marketing.
Shouldn’t the focus be on GETTING THE BEST VALUE FOR THE MONEY over the terms of mortgage? Of course it should because here’s where the banks take advantage of you.
Almost 60% or 6 out of 10 new 5 year fixed mortgages are changed/broken/altered within 38 months into the contract. If 60% seems high to you, just consider all the reasons mortgages get broken, like debt consolidation, job loss/change/move, major renovation, death by accident, marriage breakup, becoming disabled and on fixed income etc, etc, etc, and the list goes on. The banks know this and so they pitch ‘Fixed’ vs ‘Variable’ rate, and make a fortune on your back.
Getting a mortgage today is complicated. Should it not involve a professional (expert) who can explain the terms, the pitfalls and find you the best solution for your needs?
Stop letting the banks win the game. Call us for your next mortgage need and we promise to get you the best rate and terms to save you thousands and YOU WIN!