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So-called “Best Rate sites” are put to the test with shocking results.

which mortgageThere’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.”

Mortgage Penalties exposed… an in-depth study, part 2…the update.

greedy banker Two years ago I published, what would become, my most widely read article.   Mortgage Penalties exposed…. an in-depth study reveals unjust penalties was written to show just how unfair penalties had become.   The surprising results showed that the BIG SIX BANKS were the leaders when it came to charging the highest penalties in Canada.   If you had a Fixed rate mortgage and thought your mortgage penalty could only be a 3 month interest charge, you were in for a huge shock.

Consumers were experiencing $10k, $15k, $20k and even $30k in prepayment penalties and more! Ridiculous amounts.   Put another way, these penalties equaled 12, 16, 20 months worth of interest and sometimes more!   But we also discovered some good news..   There are better alternatives to the BIG SIX BANKS.!  There are several other Lenders that don’t use the same inflated and unfair prepayment penalty calculation as the BIG SIX BANKS.   There are other Lenders with competitive, and often better, interest rates, and with much lower penalties.  That original study opened the eyes of Canadian borrowers. (another eye-opening stat…the BIG SIX BANKS reported a record $30billion in combined profits for 2012.)

Two years later, with more consumers being forced into Fixed Rate products, we thought it was time to revisit Mortgage Penalties and see what changes had been made, if any…

Continue reading “Mortgage Penalties exposed… an in-depth study, part 2…the update.”

Personal Debt level concerns are overblown according to Equifax stats.

Equifaxdebt amination So here we go again.. More stats that show our personal debt levels aren’t out of control… That’s right, I said ‘aren’t’ out of control.  Equifax Canada says our defaults are at record low levels and we are paying off our debts faster.   This doesn’t come as any surprise to me.   Anyone that’s followed my posts knows that I have questioned all the popular articles telling us we are not managing our debts responsibly.

You’ve seen the reports… ‘Personal debts at record high levels’…..’Personal Debt crisis’.     We’ve been hammered with the same headlines for the past few years.  I just wasn’t seeing this with my readers or my clients… I kept seeing consumers wanting  to take advantage of these record low interest rates to invest or improve their homes (why is that a bad thing?).   That’s not bad debt in my opinion… that’s good debt.. And now we have some stats to back up what I have experienced. Continue reading “Personal Debt level concerns are overblown according to Equifax stats.”

Canada vs the world…debt level comparison study.

debt 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.”

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