A couple, in their 30’s, contacts me for a mortgage. They want to buy a new home. She is a teacher, he is a Manager at a computer firm. Incomes are good. I check their credit. Let’s stop here for a minute.. If they had good credit, an approval is simple and we would provide the clients with several mortgage options.
But let’s assume that this couple ran into some debt and credit issues 3 years ago… and they made 3 different choices about how to resolve those credit problems. Credit counselling, Consumer Proposal and Bankruptcy. And I’ll bet the results will surprise you…I want to take you through each scenario and show you how long each of these 3 options affect your ability to finance a home.. Continue reading “Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options.”
Remember 2008? It was almost 5 years ago that the U.S. sub-prime mortgage scandal erupted. October 2008, to be exact. That’s almost 5 years ago… And with October and November 2013 renewals being less than 120 days away, we can now lock in some rates for those upcoming renewals. So I thought this would be a great time to see what sort of advice and recommendations the Banks were giving to their mortgage customers.
THE BANK’S ADVICE
The funny thing is, Banks have never changed their advice or strategy. ‘Take a 5 year fixed rate’. That’s all the Banks seem to want to promote. And with good reason… it’s the most profitable product FOR THE BANKS. But historically, it’s NOT the best product to take. There is no historical data that I am aware of that shows taking a 5 year fixed is the best strategy. But I’ll get into that in more detail later. Continue reading “Looking back 5 years.. which mortgage product did your Banker recommend in 2008?”
There’s been a surge of ‘Best Rate’ sites popping up… Chances are, you’ve probably seen one or more of their online ads… You know the ones…‘shopping’ for the Best mortgage rates in Canada’ and ‘comparing Canada’s mortgage brokers for the best rate”. It does sound great… and it seems to be getting lots of attention… Even the media are covering and quoting these sites… And although I like that these sites promote how Mortgage Brokers can offer great rates, I’ve noticed some disturbing trends that you need to watch out for.
“I JUST WANT THE BEST RATE”
You say you want the ‘best rate’? Really? Or do you want to pay the least amount of money on your mortgage? I’ll bet it’s the latter. Make no mistake, these two things are very different and I’ll prove it. But let’s face it, the rate gets everyone’s attention.. Most people don’t want to hear anything beyond that.. until they get burned for $$thousands on the mortgage later on.
Now what if I told you that 80% of my clients were paying a rate of 1.35% during 2009 and 2010, would that get your attention? Of course. And it’s true. 80% of my clients were in a Variable Rate mortgage based on my recommendations….and almost all of them didn’t panic and lock into a fixed rate (like the BIG SIX BANKS wanted them to)…they stayed in those products based on my specific advice recommending they not lock into a Fixed rate…. That’s called being in the right product at the right time. My average client saved $6,000 during that time. Continue reading “So-called “Best Rate sites” are put to the test with shocking results.”
Hey, here’s an interesting stat that should make us Canadians feel good…. Our Federal govt keeps telling us to slow our personal debt levels… maybe they should start balancing their own books… I remember when, in 1997, the Feds actually balanced the budget and even made a surplus. Remember that? In fact, from 1997 to 2008, the Feds reduced our national debt from $563billion to $458billion. We seemed to be heading in the right direction.
Then the U.S. sub-prime mortgage crisis hit and the Feds starting spending in an attempt to avoid a major recession. So far, it’s worked. Our economy has performed pretty well when compared with most other countries. But our National Debt level has now surpassed the $600billion mark for the first time ever. How concerned should we really be? Is our national debt level really that high? I decided to compare out debt with a handful of other countries to see how we stacked up….
NOW FOR THE GOOD NEWS
Continue reading “Canada vs the world…debt level comparison study.”
FINALLY!!!!! A major TV news program calls out TD Canada Trust’s collateral mortgage. CBC Marketplace aired an episode called ‘Busting the Banks’ on January 25th. Hey, it’s only taken 2 years but who’s counting??… Lol! If you want to skip to the video link, just click here and scroll to the 8:00 min mark. (by the way, I should point out my contributions to this episode. I was contacted by the producers of CBC Marketplace for my opinions and advice during the filming of this episode….over the past 3 months, I assisted with some of the research. Hope you find the info useful).
During the program, CBC took a hidden camera into a TD branch….the reporter posed as a potential mortgage borrower…. Only when questioned for the 4th time did the TD banker disclose their mortgage was a collateral charge…. but they didn’t seem to explain the difference between a conventional mortgage and a collateral mortgage… The Banker only agreed that the collateral charge was a disadvantage. Continue reading “CBC Marketplace exposes TD’s collateral mortgage”