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Posted 2 Comments on Your mortgage is paid? Beware of mortgage fraudsters…. Mortgage News

Your mortgage is paid? Beware of mortgage fraudsters….

“You’ve worked hard all your life… your house is finally paid off.  You decide to it’s time to get a smaller house, maybe a condo or you just want travel.  Does this sound like someone you know?  You sell your home but discover that someone has registered a mortgage on your house without you knowing it.  Sound impossible?  Guess again… this is Mortgage Fraud and it’s happening now.”

I wrote that back in 2006.  Since then we have seen some provincial governments step in with laws to protect unsuspecting homeowners….  You can also purchase Title insurance to protect you as well.    But once you have been victimized by the crooks, you still need to make a claim and go through the hassle of clearing things up…. Who wants to go through making a claim? This takes time and can be a big paid in the rear. 

What if there was a way to make yourself less of a target?   The good news is there is a better way to protect yourself….. The criminals go after homes that have no mortgage.  This is PUBLIC information.  Anyone can find out if you have a mortgage just by going to the Land Registry Office and doing a search.   So what should you do?

The solution is to register a mortgage on your home.  This doesn’t mean you need to borrow money.  By getting a secured line of credit you will have a collateral mortgage registered.  The criminals will not know if you have a balance on that mortgage or if it’s $0.   And they will probably go searching for the next home that has no mortgage.

What makes this product unique is that it is available to both salaried and self-employed individuals that cannot prove their income.  If you don’t use it, it doesn’t cost you anything.  

Let me know if you would like more details about this.

Posted Mortgage News

TD is not able to accept collateral mortgage transfers.

Last October, we reported one of the biggest changes by a major bank in recent history…. TD Canada Trust changed how they would register mortgages…  Quietly, TD announced they would now register all mortgages as a collateral charge…  Most borrowers won’t know what the difference is, but for us in the financial industry, we know this will have huge ramifications and limitations and could end up costing the average borrower $$thousands.   Click here to read what the experts say.

And then in December, we heard a rumor that TD was looking at ways to transfer in collateral mortgages…. They wanted to give us the impression that there were few limitations to taking a TD mortgage… uh, let me say that again… that’s TD collateral mortgage.

We just heard that this has been put on the shelf.   They just can’t figure out a way to transfer in collateral mortgages…  If this doesn’t make you think twice about taking a TD mortgage, then I don’t know what will.   I’ve never heard of any bank accepting a collateral mortgage for transfer……Just isn’t possible with today’s real estate and mortgage laws.

Oh and by the way, if you’re wondering.. TD will allow you to transfer in your mortgage from any other financial institution…  But be warned, once you are there, I think you’ll have a hard time getting out.

Posted Case study

Investing in a multi-unit properties? Take care…

Recently, I noticed something very strange happening with multi-unit properties and I want to share two experiences with you…

I was approached to refinance 2 separate and different Multi-unit properties by 2 completely different borrowers.    Both properties were in the Greater Toronto area.   They were both in great condition and were bringing in good rental income.

Property 1 was purchased in 2008 for $385k.  There are 3 legal rental units.   It generates good rental income of $3700/month. The owner paid utilities.

Property 2 was purchased in 2006 for $610k.  There are 3 legal rental units.  It generates rental income of $3400/mth…. The tenants paid utilities…(it should be noted that Property 2 is in a more expensive part of town where real estate prices are higher).

Fast forward to today…. Based on current appraised values, Property 1 is currently worth $460k, Property 2 is currently worth $660k.   Keep in mind that these are actual rents for both properties.

So how can this happen?  It’s clear to me… the buyer’s of Property 2 overpaid in 2006….Property 1 is in a less expensive part of town but the rental income and condition of the property are more relevant when dealing with investment properties….

How can you avoid this mistake?  Seek out the help of a good Mortgage Broker… A good broker can seek out the opinions of a recognized real estate appraiser… and even crunch the numbers with an experienced Lender to determine the property’s Lending Value…

As an aside, the average sale price of a single family home in GTA in 2006 was $350k…. today, it’s around $427k.   Multi-unit dwellings can be attractive but consider single family homes if you want to invest in real estate.  Always discuss the purchase with a trusted group of advisors… including your Mortgage Broker.

 

Posted Mortgage News

Bond yields fall after Middle East turmoil

Earlier this month, we saw Fixed mortgage rates go up and the forecasts were calling for rates to continue to go up over the next 2 years.   It’s important to remember that all forecasts make certain assumptions and don’t allow for the unexpected… These forecasts may still be accurate but of course, no one was expecting the uprising in Egypt, now Libya and possibly other Middle East countries…

The Canada Bond yield has dropped around 22bps to 2.58% from a 10 month high of 2.80%.    This takes some of the pressure off to raise fixed rates… and we might even start to see some Fixed rate decreases if the Bond yields fall further…(or course, the Banks are famous for raising rates immediately but lowering them slowly and this was even identified by the most recent Bank of Canada quarterly review)

I can’t help but to reflect on Professor Moshe Milevsky’s article from a few weeks about how to deal with rising interest rates…. In this article he cautioned us about overreacting to warnings of huge rate hikes or calls to lock in your mortgage…    Wow, the timing of his article couldn’t be more perfect.   I recommend you take a moment and read what the Professor has to say.

Posted Case study

Report shows Canadian borrowers are too complacent…don’t drink the koolaid.

That’s what a report in the latest Bank of Canada Review had to say…    This article in the National Post sums it up well…  “Simply put, borrowers are often complacent and end up paying more than they should.”

This is exactly the reason I started this site…..To make you an informed borrower. Like the review said,  “consumers have different preferences and skills when shopping and bargaining for a mortgage and where lenders maximize profits based on observing these preferences and skills.”

So, how does the average Canadian borrower know if they are getting the absolute best rate or the right mortgage product?  Is there a better product with a different Bank, Financial institutions or other Lender?  How do you know if you aren’t speaking with an unbiased professional that doesn’t work for any one bank?  For me, there is only one sure way to know you are getting a highly competitive mortgage product…..You must deal with a Mortgage Broker.

Here’s another quote from the Bank of Canada Review…  “Canadian lenders appear to be extremely slow to pass on changes in the Bank Rate to their customers.”  I’m sure this comes as no surprise to most of us.

Never forget that the Banks are a business… and they are here to make a profit… It’s imperative to seek unbiased, market neutral advice…..  A Bank Mortgage Specialist just can’t be neutral or unbiased….They can only offer one set of products…  I save the best for last….

A Mortgage Broker helps to ‘creates competition’ as the report said.

Hopefully, this site will keep you informed and awake…Don’t settle for the status quo….