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Tagwhy use a mortgage broker

Online shopping for Stocks, Vacations and Mortgages.

Online shopping …. Stocks, Vacations and Mortgages. What’s the difference?

Online shopping for Stocks, Vacations and Mortgages.Is choosing a mortgage as easy as booking a trip or trading a stock?   Let’s find out! 

Sure, you can book a flight online or buy a stock through the web.  But, can you really choose the right mortgage product on your own?  Can you really find the absolutely lowest cost mortgage financing option?  I’ll bet some consumers can. I’ll also bet the vast majority cannot.  There’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.

I’ve shared dozens of those experiences on this site.  Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’.  I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping …. Stocks, Vacations and Mortgages. What’s the difference?”

Online shopping for Stocks, Vacations and Mortgages. An In-depth comparison…

which mortgageIS CHOOSING A MORTGAGE IS AS EASY AS BOOKING A TRIP OR TRADING A STOCK?…LET’S FIND OUT!

Sure, you can book a flight online or a buy a stock through the web.   But, can you really choose the right mortgage product on your own?  Can you really find the absolutely lowest cost mortgage financing option?  I’ll bet some consumers can. I’ll also bet the vast majority cannot…. and there’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.

I’ve shared dozens of those experiences on this site.    Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’.   I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping for Stocks, Vacations and Mortgages. An In-depth comparison…”

Is your banker giving you their best rate?

greedy banker EVEN THE BANK OF CANADA SAYS MORTGAGE BROKERS WILL GET YOU A LOWER RATE.

The Bank of Canada did a study a few years ago called Competition in the Canadian Mortgage Market.   The study concluded that consumers get a lower interest rate through brokers.    They also said that higher income earners were actually paying higher rates because they are less likely to spend the time to shop around for lower rates.

Last week, I did an interview for the news media about what a broker does.   They also interviewed one of my clients.  This client owns more than one property, he’s an experienced real estate investor and a senior manager for a major corporation.  He uses my service because I save him time and money.   He trusts my advice.  It’s that simple.   Here’s a link to the article.

IS YOUR BANKER GIVING THE BEST RATE?

A simple question.  How many of us can truly answer, yes?    You walk into your branch, you see a posted rate.  Then your banker shows you the “special rate” or “discounted rate”.   And then maybe they tell you they can do a little better.  But how much better?  And why aren’t they giving this up front?   Don’t loyal customers deserve the best?  Does this game sound familiar?

Continue reading “Is your banker giving you their best rate?”

Giving up the Bank Kool-aid.

Big six banksRecently, I’ve had several new clients contact me about getting out of their higher rate BANK mortgage… No surprise here… with interest rates reaching new all-time lows, it only makes sense to look into this further…

But I’ve noticed a very familiar pattern developing….See if this sounds familiar:

1-First, you hear about these record low fixed rates… maybe online, from a friend, or from one of my current clients…

2- You contact your Bank to see what they can do…

3-Your Banker gives you 2 options… 1- pay an inflated prepayment penalty (BIG SIX BANKS make you pay for any rate discount) and get into a new 5 yr fixed rate of 3.29% (this is the best advertised rate today by a BIG SIX BANK).  OR 2- they’ll blend the penalty into a new mortgage but your rate will be higher… (this never works to your advantage.. there is NO assurance the Bank will offer you the absolute best discounted rate when calculating your new rate.. it’s been a favorite tactic of the Banks for decades…don’t drink this kool-aid… it will cost you $$thousands). 

Most of us will stop right there and go no further…We’ve consumed so much Bank kool-aid that it’s turned us into a flock of sheep… But if you’ve started to become immune to the Bank tactics and want to explore further, then read on…

4- You call a Mortgage Broker, maybe me… you discover that today’s best 5 yr fixed rate is under 3.00%…   (That’s today’s best 5 year wholesale mortgage rate with NO ADDITIONAL RESTRICTIONS OR LIMITATIONS…It’s important to understand this fine point.)  And you discover it’s now worth paying the penalty to get into this new mortgage.

5- Everything is going great… but come payout time, your Banker contacts you… They make a last-minute plea to save your business… Somehow, they miraculously offer to match the Broker rate…

Every heard of this before?  What would you do?

Most of my clients, that go through this process, quickly discover who has their best interests at heart.  They realize it’s better to deal with ‘rate-setters’ vs ‘rate-matchers’.    But oddly enough, I have seen some clients stick with their Bank… Like other addicts, they can’t seem to explain it..   Even after going through the entire mortgage review and approval process (or what I refer to as the  Bank detox process).   When asked why they stayed, they couldn’t give any logical reason.  They just keep going back to the Bank for another fix.

10 years ago, this happened more often.  But times have changed.  Kool-aid is out.  Protein shakes and Red Bull are in.  Today’s consumer is more educated… information flows faster.  Even the Bank of Canada said “borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly”. (February 2011 entitled ‘Competition in the Canadian Mortgage Market’’).

As always, if you have any questions or comments or are just looking for a better mortgage, please free to contact me anytime.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Why use a Mortgage Broker

There was an article in the Globe and Mail recently entitled ‘Why use a mortgage broker?’.    No, this image wasn’t part of the article but it’s an image that many  will conjure up when we hear the word ‘Banker’.

The article talks about why Financial Planners and other professionals will recommend, and work with,  a Mortgage Broker vs. having the client go directly to the Bank.  Here’s a few quotes from the article that make it easy to understand.

  • “It’s the most efficient way to get the best-priced and best-structured mortgage”.
  • “So rather than shopping at multiple financial institutions and negotiating with each financial institution and arm wrestling them to give you the best deal, it’s one phone call and they do the rest for you.”

And here’s some facts from a Bank of Canada review published in February 2011 entitled ‘Competition in the Canadian Mortgage Market’:

  •  This one is no surprise…. “The results also indicate that borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly”. 
  • Here’s one that may surprise many of you…  “The results also indicate that higher income households pay higher rates, on average, than lower-income households.”
  • And here’s another one…  “Banks also offer larger discounts to new clients than to existing clients.”

I’ll add a few more of my own….   A broker shops the market…doesn’t work for any one lender but instead works for the borrower….. and provides the borrower with clear, neutral and unbiased advice.    Brokers save borrowers money and will continue to shop for better rates at renewal and throughout the life of the mortgage…

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