Existentialism via your Mortgage

Mortgages brokers are essentially salespeople. I've been doing this for a couple of years now and I can honestly say I don't think we really see ourselves as that though. Maybe it is because we don't sell our clients anything tangible. We sell percents, theoretical savings, education and insurance. If I want to continue the sales pitch- peace of mind. Salespeople are usually equated with cars, televisions and furniture. Not future savings.

We don't sell you houses; that is the profession of Realtors and a good one is worth their weight in commissions. We definitely don't buy you houses as ultimately it is your name on the title deed. You are the home-owner, no matter how big or small.

I find you the right lender for your needs. The lender is the one who will probably give you the largest amount of money in your life. And while you don't technically see it in nice crisp $100 bills like in the movies, you do become responsible for it and most importantly, paying it back.

that's a whole lot of house right there...

So what is a mortgage broker? As I mentioned earlier, we sell you numbers and savings. If it helps to be more tangible, we find you the right lender for your needs.You don't pay us to do that; instead the lender pays us.

I think the biggest question out there is 'Why bother?'.



I get that. I'm of a generation that likes two things; Simplicity and Convenience. Yes, I was one of those people that needed instant gratification. I expected my food in 10 minutes or less. I hated waiting in lineups, I would hang up the phone if I got an automated switchboard and had to press more than two numbers.


Before I entered the housing market in my 30's, I never considered buying a house. I was too immature for such a large responsibility. Then life caught up with me and offered me some other choices. I bought my first house (with the help of my parents) for the only interest rate I was offered at my bank, It was 6.49% on a $68,000 purchase price - I KNOW!

It was listed as 'small and cozy'

I signed that mortgage contract because of the two things - it was Simple and Convenient. It was the bank I had been at for 10 years. It was at the local mall and they were already cashing my paychecks and had my Visa statements. I believed that was where I was supposed to go. I never heard of a broker. All I knew was there were 6 Big Banks in Canada and they were all the same.

So I bought the house. A few years later I was in a great relationship and we needed to upgrade to a bigger house (for the baby). So I sold that one for a good profit and didn't flinch when I was told there was going to be an $8000 penalty if I didn't buy another house with the profit. Not a big deal as that was what the plan was anyways. We stayed with the same bank (convenient) and increased the mortgage amount. I don't know even know what my new rate was (simple). In a few more years we again sold our house for a work opportunity. We were again told of that $8000 cancellation fee but this time we didn't buy another house. We instead rented our house out, the rent covering the mortgage.

We eventually sold that house. It was too much to be a long-distance landlord. We used the profit to pay off student loans and consumer debt, keeping enough for a down-payment on our next house (when we found the right one). This time there was no getting away from the cancellation fee.

So what does this have to do with my becoming a mortgage broker. Simply and conveniently put - I've learned things. Things that in hindsight would have saved me a lot of money. And as my life meter tips more towards the end than the beginning, like Frank Sinatra says, Regrets, I've had a few.

like investing in that Penny-farthing business

So here's what I learned being in the Mortgage Brokering Business;

1) We link prospective buyers with prospective lenders.
2) There are more options out there than you know.
3) Interest rates vary according to lender.
4) The less interest you pay, the more money/equity you have in the long-term
5) Your bank isn't always the best rate you can get. Often it's not even in the top 5.
6) The more financially organized you are, the simpler the process is.
7) Conveniently, you don't have to do the shopping.
8) Eight, eight I forget what eight was for.
9) Violent Femmes have forever ruined lists for me.
10) There are a varied amount of products out there that you may not have thought of.

Selling the Math

The difference between 2.75% and 2.85% might not sound like a big deal. It wouldn't to me. Until I do the math on one of these handy Internet calculators right here which is also attached to my website.

A $275,000 mortgage at 25 year amortization.

Monthly payments are 1266.41

Interest rate of 2.75%

The total money to be paid back would be $379,921 over 25 years.

Of that, $104,921 is interest. 

In this comparison the same $275,000 at a 25 year amortization but at a 2.85% interest charge would be $1280.35 a month. A slight $14 difference. Not a big deal, right? 

After 25 years you would be paying back $384,106 with $109,106 of that going to paying back the loan.

That is a $4,185 difference and that's taking only 2 relatively close interest rates offered by competing lenders on a straight forward mortgage.






Of course, there are other factors involved; perhaps you want to buy farmland. Perhaps your house has a rental suite. Perhaps your house has well water or you are looking at buying a condo. I find those lenders that will sell you their mortgage 'product' and bring them to you at your convenience.

So what about your bank? As of this writing, a nameless Canadian bank rate today has a special of 2.94% (based on you being able to qualify at a 4.64% rate).  

Keeping with the same $275,000 over 25 years your monthly payments would increase to $1292.97.

Over the life of your mortgage you will pay $387893 in total.

Of that, $112893 is payments to your interest.

That's $7,972 you are paying simply because you decided it was simpler and more convenient to go ask your bank for a mortgage.

Huh. I seem to have digressed from an information blog to a sales-pitch blog. Ultimately my goal is to give you options aside from your bank.

I will try to convince you what lender I think works best for you. So, yes. I guess I am a bit of a salesman. And what I'm trying to sell is the best peace of mind for you in purchasing your dream home or investment property.

Thanks for reading! If you have any questions you can always contact me through my website.