Playing the Interest Rate Chicken Game with your Term

5 Year vs. 10 Year Mortgages – Does it Matter? 

The best and worst thing about becoming a mortgage broker is the training. On one side, getting your license involves doing a lot of math with specialized calculators and an understanding of legalities and other professions surrounding purchasing real estate. The advent of the Internet has made the former redundant and while it's nice to know how a real estate appraiser uses comparable sales to determine a home's net worth, it isn't up to me to actually do the appraisal.

Your friendly mortgage broker learns a lot through osmosis and trial and error and trying again. Most of my education has come after I received my license. Understanding credit reports and lender's various positions regarding credit scores, 'high-risk' locations for lenders, purchasing your parents' house, sweat equity as a down payment, all matters not covered in the How-To-Brokerage textbook. 

The Mortgage Broker And You

Hi.

You want to buy a house or perhaps you have one and it's time to renew. Where is the first place you turn to for help? Your bank. After all, you have most likely been with them since you opened your first savings account, an idea that was forced upon you by your parents. They will know what to do and they will help you because you've been with them 10, 20 years.

I totally get this kid...

And they do help you. You go in, talk about purchasing a house and they say we will give you the money to buy this house and you can slowly pay us back over the next two or three decades with this little amount of interest tacked on. Next thing you know, you've signed some papers, told your Realtor and by this time next month, you are a proud new homeowner!

Yes, mortgages are complicated. Some are more complicated than others. Hotels, apartment buildings, skyscrapers, they all have mortgages of some type. But let's just keep things simple. I'm talking to you, the simple home owner or buyer.

Ten Costs to Consider When buying a House.

There's a lot of things to consider when you are looking at 'moving on up' in the world, or even just 'moving across the street'. Here are 10 things. You may overlooked one or two.

Balloons help in every situation. 

5 Reasons to Avoid Big Bank Mortgages

In Canada, there are few things guaranteed. Snow. Taxes. Roll up the Rim to Win.

Wearing out your snow shovel...

We want guarantees. We need them. So when we want that feeling of security that only home ownership provides we turn to the first thing that we think may be able to help us financially; our parents.

But what if you are past that stage of wanting/needing parental assistance? Your second choice is most likely your financial institution. After all, you've been with them probably ever since your parents set you up with your first bank account in a perhaps misguided attempt to teach you about savings and earning interest.

I know that's where I started. I was told that the banks will 'give me money on the money i give them'. It was called interest. So every once in awhile my folks would take me to the local bank and I would give the teller my bankbook and some birthday money from Gramma and the teller would take my money and give me the book back. Inside it were numbers; my previous balance, the money the bank gave me for keeping it there, my deposit and then finally my new total.

The one time i remember registering how much my bank was giving me it was 11 cents. I probably had not been in there for a few months. I remember thinking 11 cents isn't very much. Fast forward 30+ years and I'm still wondering when I'm going to be getting paid for giving my money to the bank to hold for me so that robbers wouldn't get it.

I digress. You are a grown up now and want to buy a house. You need a mortgage because you don't have $400,000 built up from the interest you have earned from your bank. So, after your parents say no, you decide to go to the only place you know that deals with big amounts of money; your bank.

Is that your smartest choice?

The Art of Selling Privately or Not

The Art of a Nearly Non-Deal

I think this is the one...

Perhaps you found someone looking to sell their house privately, someone who wants to avoid the thousands of dollars of commission a Realtor would make for doing nothing more than getting someone to sign some papers from a Real Estate For Dummies handbook. Perhaps this sounds like a great idea in the short term – maybe it’s family, maybe it’s an acquaintance you've known for years. 

Perhaps you should rethink that idea before everyone gets too excited and starts planning renovations or Mexican holidays.

Now I’m not advocating entirely for one way or the other – there are thousands of private sales that go through without a hitch. There might be a few small hiccups along the way, but as long as everyone is negotiating in good faith, happy is as happy does. Unfortunately there are also thousands of Realtors out there with more than a few that push potential clients into a house that they may not be happy with in order to receive that juicy commission. Like everyone else, when looking for a Realtor, ask for referrals. There are plenty of good Realtors out there and there are bad ones which gives the others a bad name and is why private sales or Do-It-Yourself companies like The Property Guys have become such a popular option in recent years. 

That said, here’s some warning signs that you should be wary of when attempting to purchase privately and trying to shave a few thousand dollars from your mortgage by using a do it yourself kit. If you step back and remind yourself that this is a deal worth perhaps hundreds of thousands of dollars, when and if a delay happens everyone can continue to work diligently to making the deal happen. That said, the most stressful factors in attempting a private sale (from my own personal experience);