As mortgage professionals with 25 years experience, we see it all. In the present economy we are seeing more and more people selling their homes, not because they want to, but because they ‘believe’ they have to. If you have approached your bank and have been turned down and put your home on the market, you still have several other options to consider before giving up the house you love.

The Bank is ‘Not your friend, especially when you have any ‘issues’ such as job loss, job injury, prolonged illness, separation/divorce, even death of a spouse who was the main bread winner. The banks think and operate ‘inside the box’ whereas we do so ‘outside’ the box. The banks will only tell you that ‘your credit is not satisfactory’ or ‘sorry we cannot help you’ without going into any detail with you, leaving you in the dark, confused and stressed. Most of all, you must understand that all the banks are out ‘for themselves’ first, foremost, and always.

We on the other hand, have your best interests in mind, and we use our experience and ingenuity to structure deals that we can get approved though more ‘common sense’ lenders when you have issues. Even if you are in a consumer proposal, bankruptcy, or prepower of sale circumstance, we can still help you keep your home. We have over 40 institutional lenders(and private lenders) and products that meet a multitude of circumstances.

Call ‘The Price Team’ today, consistent Award Winners with Dominion Lending Centres, Canada’s largest and most respected mortgage brokerage company. Look for our Don Cherry Ads on hockey night in Canada and our weekly column in the Wellington Advertiser, and Guelph Mercury. Hear us on Magic 106.1 FM. Visit our website:www.ronandtracy.ca. Better yet, you can call us at 519-843-5854 or Toll Free 1-866-244-3289 we will be delighted to hear from you.         

Buying a place for your children is a good alternative to paing thousands of dollars towards residence fees or rent. Here’s the math. Rent $500/month=$6,000 a year=$24,000 over 4 years of school. This money could go towards a mortgage instead as an investment for you, as opposed to paying the landlord’s mortgage.

We have owned a 3 bedroom townhouse condo in London for the last 6 years, first housing our daughter and later our son who is graduating later this year. By renting out 3 bedrooms to other students with 1 extra bedroom in the basement, our kids actually lived rent free. With summer jobs they were also able to avoid any student loans and avoid debt repayment.

It has been a great investment for us. Every year, even with improvements, all our costs were covered while the property has appreciated and the mortgage is now less than half the original amount. Our equity is quite substantial. Even with a capital gains tax we will make a nice profit in addition to not having to move(with your help)every summer either.

Over the years we have arranged many mortgages like this. Some are parents and some are professional investors who buy properties suitable for student rentals. Did you know that all student rents are guaranteed by the parents and cover the full year not just the school year?

For the inside track on buying and financing an investment property for your child’s post secondary education, please call us.

Don Cherry is on the move in Fergus. Spot him and fill out a ballot to win one of many prizes from local businesses and grand prize, a one week summer vacation at beautiful ‘Lighthouse Lane’ log cottage in Port Elgin.

Last weekend Don Cherry, our celebrity spokesperson, was stolen from our front door on Tower street. Thieves actually cut the wires that held the life size poster of Don. People have called to ask where this most recognizable celebrity has gone.

Who could do this dastardly deed?

Kids are crying, Women are wondering and men are hopping mad that Don has been kidnapped, especially with the playoffs on. We want our Don Cherry back. The latest scuttlebutt is that he is moving around Fergus, frequenting various local businesses. Please help us find him. If you spot Don please fill out a ballot to win one of many local(rewards) prizes and become eligible for the grand prize, one week summer vacation at Lighthouse Lane, a beautiful log home/cottage in Port Elgin on Lake Huron. Certain conditions apply. Listen daily for the latest sighting of Don Cherry on Magic 106.1 FM or check out his whereabouts in both the wellington advertiser and the Guelph Mercury. Prize winners will be announced weekly. The contest will run until Friday July 1st, Canada Day.                                                                                                                                  

                                            WHO STOLE DON CHERRY-CONTEST

We had a life size cut out of Don in our front door window on Tower Stret that was stolen on the May 24 weekend. We have decided to turn that ‘lemon’ into ‘lemonade’ with contest/promotion, and have fun with it.

When:June 3rd to July 1st Canada Day

Where:Local Fergus businesses;Bredalbain Inn, Tandori Grill, Stone Creek, Brew House, O’Briens, Goofie Newfie, DJ’s Pub, Remax, Freshco, Home Buildng Centre, Zehrs, Van Gali’s; locations subject to change.

What:A new life size cut out of Don will be left at the above locations for one to two days each this month. Final schedule to be determined. Each sponsor will post a ‘WHO STOLE DON CHERRY’ sticker in a prominent place (ideally front window)when Don is there. Patrons will submit ballots to win one prize from each establishment and be eligible for a Grand Prize on Canada Day, a one week summer vacation at Lighthouse Lane, a beautiful log home/cottage in Port Elgin on lake Huron.

How:Staff should be apprised of the contest and can give a ballot to every patron who asks about Don being there. Each sponsor will draw the winner of their prize when we arrive to move Don to another location. Since the real Don likes to have ‘a few pops’ now and then, we have placed emphasize on local pubs and restaurants for fun. Staff are not eligible. Balloters must be at least 21 years of age or more.

Promotion:The contest will be promoted daily on Magic 106.1 FM and carried weekly in the Welly and Guelph Mercury starting Thursday June 2nd. Locations will be revealed, with humour, and the prize winners will be announced. Four vehicles will also carry ‘WHO STOLE DON CHERRY’ decals around town throughout the contest. The contest will also be promoted on ‘ronandtracy.ca’ and Magic 106.1 FM websites.

Thank you to all participating sponsors.

Warmest wishes,

Ron & Tracy Price

The Price Team

The cornerstone of all relationships is truthful communication, especially when it comes to finances. Despite the fact that an overwhelming majority of Canadiands agree that a couple getting married needs to share financial information and goals, a surprising number of newlyweds do so. Less than half have discussed key financial matters prior to marriage, including debt, savings goals and establishing a financial budget/plan and 57% of newly married or engaged coiples have or are planning to purchase a home in the next two years.

Because there is no formal education in the school system teaching young people about credit and finances, the above statistics are not surprising. However, knowing that financial stress is a major cause of marital problems and can ultimately lead to divorce, makes the stats scary indeed. The biggest reason for mortgage default and bankruptcy is financial problems.

‘Managing credit is also very important. Knowing not to let balances exceed half the limits, not to seek new credit on a regular basis, understanding that is important not to apply for all credit jointly, and having one’s credit remain separate are basic tenets of maintaining a good credit rating.

With new home buyers, Tracy and I emphasize how important it is for both spouses/partners to plan and manage their finances together. It is a mistake to allow one spouse to be responsible for paying the bills, leaving the other in the dark. Ideally, everyone should allocate part of each paycheque towards savings. Five to ten per cent is common. This important discipline lays a foundation for responsible ‘spending’ which we see as the biggest cause of financial problems due to the availability of easy credit.

Buying a house changes everything. Finances become so much more complicated than before. So many new things are needed. So many new and unplanned expenses just ‘happen’. Buying a new car, furniture and appliances are the three most common purchases that put heavy pressure on one’s budget. Before you know it you are over your head. The wife gets pregnant, her income drops adding more pressure.

Call us today to help you plan your home purchase. We will help you get a solid understanding of your credit position,(the banks won’t do this for you)your finances and your ‘affordability quotient’. We will also help you cooridinate your home buying team of professional service providers saving you time and money.

As mortgage professionals with 25 years experience, we see it all. In the present economy we are seeing more and more people selling their homes, not because they want to, but because they ‘believe’ they have to. If you have approached your bank and have been turned down and put your home on the market, you still have several other options to consider before giving up the house you love.

The Bank is ‘Not’ your friend, especially when you have ‘issues’ such as job loss, job injury, prolonged illness, separation/divorce, even death of a spouse who was the main bread winner. The banks think and operate ‘inside the box’ whereas we do so ‘outside’ the box. The banks will only tell you that ‘your credit is not satisfactory’ or ‘sorry we cannot help you’ without going into any detail with you, leaving you in the dark, confused and stressed. Most of all, you must understand that all the banks are out’for themselves’ first, foremost, and always.

We on the other hand, have your best interests in mind, and we use our experience and ingenuity to structure deals that we can get approved through more ‘common sense’ lenders when you have issues. Even if you are in a consumer proposal, bankruptcy, or pre-power of sale circumstance, we can still help you keep your home. We have over 40 institutional lenders(and private lenders)and products that meet a multitude of circumstances.

CALL ‘The Price Team’ today, consistent Award Winners with Dominion Lending Centres, Canada’s largest and most respected mortgage brokerage company. Look fo our Don Cherry Ads on hockey night in Canada, and our weekly column in the Wellington Advertiser, and Guelph Mercury. Visit our website:www.ronandtracy.ca. Better yet, you can call us at 519-843-5854 or Toll Free 1-866-244-3289 we will be delighted to hear from you. 

When people refinance, a penalty is incurred. The bank’s method to avoid having the customer pay ‘out of pocket’ for the penalty is to ‘blend’ the old with the new rate. That is if they stay with the same bank.

Remember the bank will not tell how they came up with the blended rate, you do not know whether it is fair or not.

We had clients who told us their bank had offered them a blended rate of 4.39% when the market rate was 3.89% The penalty that was worked into the blended rate was $800. When we checked to see whether it was better for them to change lenders, pay the penalty, and get the best rate for the next 5 years, we determined that they would pay an additional $3,478.60 more to the bank than they would versus paying the penalty themselves and changing lenders.

On the surface the blended rate of a half per cent more looks fair, but it is not. Our new clients agreed and did not think paying almost $3,500 more was a good thing to do. Guess who got their business. We did. We refinanced them so they actually did not pay out of pocket for the penalty.

Your ‘friendly’ banker may do this with a smile, but what’s behind the smile is them knowing the bank just ‘made’ a nice profit on the transaction. We just think about how many(perhaps) tens of thousands of blended mortgage transactions are done like this every year.

No wonder why bank profits are excessive, and this is but one example of many ways ‘you get beat’ by the banks.

If you think your bank is taking advantage of you, give us a call to prove you right. Better yet, why not call us first. We are on your side and we’ll do you right the first time, every time.

The interest rate picture is once again looking good.The Bank of Canada did not increase prime, and in fact they may not until next year. Main reason being, our heady loony will soar if the spread between Canadian and U.S.A. prime grows further, hurting exports further when economic growth for the second half of this year is already expected to slow.

So why are all the banks pushing us to ‘lock in’ to a fixed rate when rates appear to have stabilized and the pressure is off. Even longer term fixed rates have come down slightly and are very attractive. However the premium between fixed and variable is significant. The best variable rate is 2.25% compared to 5 year fixed at 4.24, 7 year 4.79 and 10 year 4.99%. Not too many people are opting for the 10 year fixed rate which is essentially ‘double’ the variable rate. The savings choosing a variable over fixed is staggering.

A $250,000 mortgage at 4.99 requires a monthly payment of $1,332.73 versus the variable of $954.28 a savings of $378.45 per month. The ‘peace of mind’ fixed rate, fixed payment mortgage principal balance at the end of 5 years is $229,372.47. By being able to apply interest savings as prepayments over the term reduces the principal balance to(are you ready for this?)only $148,026.90 an incredible savings of $127,399. Add this to the monthly interest and the total savings increases to $150,106.

A certain bank’s marketing theme has been for some time, ‘You’re Richer Than You Think’ and always makes us scratch our heads. In actual fact, and in all likelihood ‘You’re Poorer Than You Think’ if you take the bank’s advice. You see, your bank ‘advisor’ is first and foremost, a salesperson acting to maximize bank profits and shareholder return(at your expense). No wonder they are always encouraging people to ‘lock in’. We on the other hand  want to save you money and make sure your interests are protected first.

How many people would rather pay the bank the bank an extra $150 K(if they realized this)by locking in to a fixed rate mortgage, as opposed to gaining such a ‘potentially’ huge savings with the variable, which also gives you the added ability to pay down your mortgage much much faster.

In addition, because ‘life’ often throws us unexpected curves,(for example, the need to move during the term), the penalty is often considerably less(3 months interest)with the variable, versus a possible Interest Rate Differential being applied with fixed rate mortgages which is usually thousands(sometimes tens of thousands) of dollars.

Who’s advice sounds better to you? Even if prime goes up over the term, and the actual savings decreases to some extent, is the ‘risk’ not worth the savings? We certainly think(know) so, you be the judge. If you are still unsure, give us a call. We’ll be glad to discuss further.

This was the title of a recent article in the Financial Post by a financial author(presumably some kind of expert)who described how she saved thousands by going from bank to bank negotiating for the best deal she could get.

Her story began over 10 years ago when she bought her first house. She went to Bank A and got a commitment for a 5 year fixed mortgage, then turned around and took it to Bank B, and finally to Bank C. She ended up with a great rate and as very proud of her efforts which were considerable and figured out that she saved thousands of dollars in interest. This however took much time and effort including completing 3 applications and requiring 3 credit inquiries in rapid fire. Two months later she applied for a line of credit and wondered why her credit score had gone down. She didn’t like the rate offered her and so she went to Bank B a week later employing the same strategy as before. She ended up getting refused because of too many recent credit inquiries. Her credit score dropped further.

Three years into the mortgage, she took a job promotion and had to move to another city. The penalty she was told she must pay ended up being over $8,000. Her friendly banker told her ‘not to worry’ because they would give her a new mortgage and the penalty would be absorbed into the new(blended) rate so she would not have to pay it out of pocket. She was unhappy and tried another bank only to find out she could not move to another bank because they could not absorb the penalty. Another credit inquiry had been made.

As years passed, rates dropped substantially to all-time lows. Her fixed rate was not looking as good as it did before. She literallty drooled at the thought of how much she could save if she redid her mortgage, but realized she had no choice but to tough it out until maturity, because otherwise, there would yet again be another sizeable penalty to break her mortgage.

Last year her mortgage matured and she switched to a variable rate mortgage after learning that any penalty would be 3 months interest only. If she had only known that before. Shwe would be giving up the safety of a fixed rate but she felt the risk was now worth it. At the time she received .20 below prime. Now she felt wonderful about the money she would be saving.

We found it ironic that not once did this financial ‘expert’ mention(or consider) going to a professional mortgage consultant. If she had we could have ‘shopped’ for her(using our expertise and clout), with one application to get her the best rate(and product), and one credit check saving her time, money, and not adversely impacting her credit score either. Had she called us, at any point, we would have pointed out the virtues of choosing the variable rate (proven to generate superior interest savings over fixed) saving her thousands in penalties. Lastly, had she dealt with us we would have got her into a mortgage at .75 per cent below prime, saving her big time.

It just goes to show, it’s not all about rate. It’s also very much about the product and the terms, about timing and about getting ‘independent’ expert advice from a pro in the know.

Who said doctors do not make house calls anymore? Last week a doctor called us for a mortgage. Over the years we have provided mortgage solutions for many professionals:Teachers, Nurses, Police, Firefighters, Project Managers, Engineers, major Business Owners etc., but nothing says ‘you have arrived’ like a doctor wanting us to arrange a mortgage for him.

It is becoming more and more evident that Canadians from all walks of life are ‘finally’ getting the value of our services. Like the doctor who takes care of you, we take great care of our clients. Once you experience our professional services, you will never go back, to the Bank that is. Why? Because you will understand how much we really care about finding the best possible mortgage ‘custom tailored’ to your needs and future expectations.

You will instantly see how much more time we will take with you, how much more professional(and valuable) our advice is, and how much more comfortable it is, with us than the bank. With our years of experience we also protect you from overlooking those areas that can potentially ‘cost’ you dearly. Our goal is always to save you as much money as possible right from getting you the absolute lowest rate and choice of mortgage product and prepayment terms(up to 25% per year)to help you pay down your mortgage and increase your wealth and financial security faster.             

No matter who you are, what you do for a living, or what your circumstances are, we promise to do our absolute best for you.

DID YOU KNOW: One of the worst things you can do if you are drowning in debt is to call a debt restructuring company(or do a consumer proposal) Reason is, that while they may in fact get your debts reduced, you are considered bankrupt anyway, AND you will not be able to recover for much longer, often up to 7 years. Recovery from bankruptcy usually takes 2 years from discharge until you are back on your(financial) feet and you have demonstrated excellent repayment history of newly acquired credit. Also debt restructuring fees can be very costly, prohibitively so.

Lines of credit(LOC) are popular products pushed by the banks because they can earn better interest for the bank than variable rate mortgages and human nature being what it is, people have difficulty paying them down. Most new clients are unaware their LOC may be secured against their home as a  mortgage. The positive side of LOC’s is that they ‘revolve’, which means as you pay it down, the difference between what you have used and what’s left is available to borrow again and again. People like the flexibility of being able to borrow and not have to go through an approval process over and over. And there is no penalty for paying them out. If you are in the market for a line of credit we have better rates than the bank branches right now with one of our lender’s offering only .25% above prime(we deal with 47 including all the major banks, non banks and credit unions). So it’s easy to switch you out of your LOC and into one at a lower rate.

Personally, we are not big fans of LOC’s because people are forever in the ‘banks clutches’. We call them sleeping lions because one day you wake up and realize you’ve chewed through all the available limit. The more sinister side of LOC’s is that they give you additional purchase power, and make you ‘feel’ like you have more income than you do. They allow you to spend recklessly all on credit.

Doris had been paying on her LOC for several years trying desperately to pay it off. She was making weekly payments but every time she picked up a statement she couldn’t figure out why the balance was not going down. She came to us armed with her LOC statement. We determined that her ‘regular’ payment was actually not covering the interest(a little bank trick used when there is excess room on the line. We also saw that she had also signed on for a big life insurance premium on the outstanding balance. With all kinds of equity in her home, this made no sense at all especially when she was trying to pay off her house prior to her retirement. That money would be better spent paying down her mortgage. When we pointed this out to her, she said “I am so done with the bank.”  And she too did not know that her LOC was registered as a first mortgage on her house.  

Doris wanted to tell her story to educate others and she added “I wish I had called you guys sooner.” We were able to get her .7 below prime on a 10 year mortgage. Doris is adamant on getting the mortgage finished before she and her husband Nick retire, now she can have the mortgage paid off taking advantage of the 20 per cent pre-payment privileges on the new mortgage we found for her. If you need help with your situation, drop in to our Fergus office across from the old high school or give us a call. We are always ready to help.