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!

Finally great spring weather has arrived and with it a ‘Bloom’ in home listings giving prospective buyers much more to choose from.
Once again it is a great time to buy a new home. With a more plentiful supply of listings things have started shifting back to a more balanced market between Buyers and Sellers. And this is healthy.
With all time low interest rates and the expectation of real estate ‘appreciation’ this year of 4 – 5% makes it an especially good time to make a move.
We are even seeing people selling and buying again at 5% down to be able to ‘pull’ out equity for other purposes and take advantage of our ultra low rates. In many cases they can pay off their high interest existing credit cards, and high payment lines of credit while buying at the same price point and ending up savings thousands of dollars per month in payments. This is because refinancing is now restricted to 80% of value meaning that up to 15% of equity can be accessed to do any number of beneficial things for home owners.
Not a bad strategy to get ahead in the game of finances don’t you think?
In addition, many are also taking advantage of our CHRP – CANADIAN HOME IMPROVEMENT PLAN to be able to improve/upgrade etc., the newly purchased property to their liking. Call us today for more details on this wonderful program which is part of your new mortgage.
Make your next home, your ‘Dream’ home with CHRP.
The current 5 year fixed bank rate is 4.79%. Our best rate is still 2.89%. Amazing. Certain conditions apply, OAC.
The bank variable prime rate is 3.0%. Our best variable is 2.45%. Conditions apply.
When we get you a mortgage, you avoid the dreaded bank collateral mortgage and you also avoid high penalties if you break your mortgage during the term. Did you know the vast majority of home buyers say they will be in their new home for at least 5 years and they are not concerned about the penalty? This is in the face of the fact that Canadians move on average every 3.5 years. Ouch! Yes this is true. So will our stellar advice and service, you will save big, and we protect you too. Bank penalties can be as much as 5 times any penalty associated with a mortgage through us.
For your next mortgage, the choice should be clear. Choose us first. You’ll be so glad you do!

IT’S NOW OR NEVER FOR VACATION/SECOND HOME FINANCING WITH 5% DOWN!
CMHC recently announced it is eliminating vacation and second home financing at the end of May, shutting down access to buying a second home, cottage or homes/condos for children attending post-secondary institutions in other cities.
Starting June 1st, a minimum 20% down payment will be required to purchase such properties.
This program has provided a tremendous opportunity over the years for home owners to purchase a second property that eventually can become a rental/investment/income property, since after one year of occupancy the owner/borrower can do whatever they want. In other words it can be turned into a rental property for arm’s length/third party use, thus adding to one’s real estate portfolio.
It represents the last ‘Easy’ way to acquire a second property with a minimal down payment AND AT THE LOWEST RATES available, not the surcharged rates that apply to ‘rental’ properties when 20% down is required.
If you have any thought of buying a cottage or purchasing a property for your children to live in (to defray educational costs) while they attending college or university, ‘IT’S NOW OR NEVER’ folks, to be able to do so with minimum down AND AT DEEP DISCOUNTED RATES. 
The mortgage payment for example of a property purchased at $250,000 with 5% down or $12,500 at 2.99% today is $1,123 per month whereas after May 31st with 20% down or $50,000 down with the full market (surcharged) rate of 3.49% is $997 per month. While the payment is $126 less you must invest an additional $37,500 of your own money versus $12,500.
Get this. The total amount of interest paid over the amortization for the 5% down vs 20% down scenario is $99,322 versus $99,245 or almost identical. So you pay the same total interest either way but the return on your investment will be much higher with the 5% down scenario. For example if the property value increases say $75,000 divided by your investment of $12,500 the ROI return is 600% whereas the same $75,000 divided by your investment of $50,000 is only 150% while paying the same total interest. This is the power of ‘leveraging’ which will disappear by June 1st.
So act now and call us today to take advantage of this last great mortgage financing loop hole and create wealth for your future.

With increasing regularity, people are coming to us at the eleventh hour to help them get out of a power of sale situation. Many of them have significant equity in their properties that they stand to lose when it is completely unnecessary.
Homeowners miss payments for many reasons. Often the situation is temporary and can be fixed in the short term, whereas others such as divorce, acute health problems, job loss resulting from an industrial plant closing requiring re-education and/or new job training take much longer.
Unfortunately the banks do not care about your problems, the amount of equity in your home etc., or to work with you to do what is called a 'Workout' designed to help you remedy your situation. You miss 3 payments and they go legal the costs of the action against you mount up very quickly, and your equity drops like a stone.
It's a cruel world anymore folks when money is involved. There no longer is much compassion (any compassion from the banks) or desire to do what's right by helping the client find a solution. 
Folks we constantly write about banks exposing their practices that you should be aware of. The above is one great example of why consumers should avoid getting a bank mortgage by choosing us instead. We will find you a mortgage with a non-bank lender who cares to do a workout with you should you run into trouble. We can assist you if you have a high ratio mortgage by liasing with CMHC or Genworth who both have workout programs and will intervene when a lender does not. We can get you a private mortgage to cure your problems. Unfortunately the banks use a sledgehammer to crush a bug so to speak. When you choose us, we also give you the best advice, most flexible solutions that will save you money,  more compassionate lenders, better than bank rates, no collateral mortgages, lower penalties etc. 
'Informed' consumers now choose experienced mortgage brokers over the banks because our services overwhelmingly protect your interests and save you money. It's a slam dunk decision and if you are one of our regular (informed) readers, then please remember to tell your loved ones and friends about us. We love this business, and it shows! Thanks much.