ATT'N BC Teachers

There's an old story about a guy that is going around the scene of a battefield, pulling the boots from dead soldiers. Asked why he was doing that, he says "Hey, a guy has to make a living somehow."


For those in the Internet world with No Boundaries, in British Columbia, Canada there is a pretty big ideological fight going on over our public education system. Our public school teachers are on strike and have been since last June. The current government (called the Liberals but ironically more right wing than what the term suggests) have not negotiated a new contract with the teacher's union in over 10 years. In fact, they were found guilty 2x of attempting to union-bust and are currently appealing for the second time in Canada's Supreme Court.

BC's current public education system is represented by the guy on the right

Anyways, all you BC teachers know this; I'm just updating the dozens outside BC that are unaware of your situation. Keep reading and I will get to a small way I may be of help financially.

As this drags on the 90% of BC parents who rely on the public education system are caught in a war of words and mis-information. Everyone has picked a side but as the dispute plays out in the game of public opinion, it belies the fact that there are a lot of teachers out there that are starting to have troubles paying their bills. Much has been said of how the extended legal battle (again, original verdict in 2002) has drained the union's coffers. Food drives are being organized on behalf of teachers standing strong and walking the picket lines, other unions are starting to pledge financial help to the teachers while the government continues to state there is no money in the system to provide decent wage increases to make up for a decade of declining economic worth. Like I said, I'm going somewhere with this...

Renewal Time - Should I Stay or Should I go (to a Different Lender)

RENEWAL TIME – Switching a Mortgage (to a new lender)

So there you are, grooving to The Clash and thinking 'Where did the time go?' as you are opening your mail. You then notice a letter from your bank or credit union, which is curious as that means they have paid the cost of a postage stamp to contact you. That probably will be added to your monthly bank fees. And if they are contacting you, that means they probably want money.

You open it and find out its actually not that bad - just a friendly note reminding you that your mortgage term is coming up for renewal and hey, why not stop in and renew early before rates rise? They will even disregard any fees or penalties that may have occurred because they care about you.

You get suspicious at that word 'care'. If they cared would they be charging you that $15/month banking fee? Would they charge you $100 for an NSF check when they know that you obviously don't have or else that check wouldn't be NSF?

Buying a Home, the Basics

How many times have you asked this; "If there was only some visual representation of what I need to do as someone who wishes to buy a new home?"

Well, that's what Kiss Mortgages is here for, to Keep It Simple Simple. Feast your peepers on this.  

While it's meant for your basic mortgage broker 101 course, I believe it helps to take away the mystery of what a mortgage broker does and why. After all, we may understand why we need a T1 General (Canada represent) or two years NOAs but do you? Do you even know what that means? Let me be your tour guide. Follow me down the rabbit hole...

1) Initiate Client Contact - Whatever the marketing pros want to call it - 'touches' 'collisions' 'interactions' all it is really is someone saying 'I might need help one day and I will remember you first.'

The Pros and Cons of Using a Mortgage Broker

If you know me (and you probably don't) you should know I'm a mortgage broker. I'm not a great one, but I'm pretty good, so I like to think. Sometimes I tell people that maybe they should stick with their current lender or that they aren't ready to buy that house yet. In this cutthroat world of commission-based sales, I believe that you have to do what is right for the client, not my bank account. And sometimes that news isn't what my clients want to hear. 

So when I was trying to come up with an idea for this week's blog post, I found this little article about the pros and cons of using a mortgage broker. And I thought 'Cons? What cons?". Then i realized I'm a little biased on the matter so I decided to deconstruct these cons as posed by Krystal Yee, an interesting lady who does her own thing at the greatly named  www.givemebackmyfivebucks.com and makes some freelance income on the side such as with this article which you can read in entirety here but I'm going to deconstruct it on my blog anyways but still - every writer loves the web hits. 

Support Krystal - she's worth the read. 

'You don't need double-talk, you need Bob Loblaw'

The Pros and Cons of Using a Mortgage Broker


Whether you decide to purchase a house in the country or a swanky downtown loft, your home will likely be the biggest investment you will make. But before the keys get handed to you, there is a lot of research and paperwork to do -- and that includes securing financing for the most expensive purchase of your life. 

- I'm with you so far, Krystal. 


According to a 2011 survey by the Canada Mortgage & Housing Corporation, 81 per cent of recent buyers, at some point, will rely on a mortgage professional (either a mortgage lender or mortgage broker) for advice and consultation.

When you decide to use a mortgage broker to help you with your financing, they will act as a liaison between you and the lending institution. Mortgage brokers negotiate the best available terms and rates on your behalf, and will usually work with dozens of different lenders in order to secure the financing options that you are looking for. 

- this is our typical sales pitch; all new mortgage brokers must recite this from memory in their secret initiation ceremony.

Here are three reasons to use -- or not use -- a mortgage broker: 

1. Mortgage brokers provide their services for free to borrowers. 

Pro: Since mortgage brokers are only paid when a loan is approved and signed, their assistance will cost you nothing. 

Con: Brokers are paid a commission by the lending institution, and don't work just for you. 

- I'm glad I wrote the intro before actually reading this - It's more fair to say that brokers work for themselves. All lending institutions provide close to the same commissions - that's actually not a big factor - what we look for is competency, co-operation (ie; some lenders will never finance farm land) and competency again. If we have difficulties with a lender on your behalf, we're most likely not going to use them again just so we make an extra $50. 


2. Mortgage brokers help those with less-than-perfect finances secure a loan. 

Pro: For those with blemishes on their credit report or a low household income, a broker might be able to negotiate better rates than if you approached the lending institutions yourself. 

Con: If your finances are less than perfect, you might not be financially ready to become a homeowner, whether the bank will give you a mortgage or not.

-Most everyone has less-than-perfect finances, that's why you have a consultation with a mortgage broker. A good mortgage broker will tell you what you need to do to qualify, can help you budget or give you a referral to someone who can if you don't and will keep in contact with you to see how you are doing. If you aren't going to be a present client, you might be a future client.   


3. Mortgage brokers will save you time. 

Pro: Mortgage brokers will do all of the legwork for you in terms of paperwork and negotiating with lenders. They will also be your point of contact for everything related to your financing. 

Con: Even though you will most likely save time by using a broker to do all of your negotiating, some brokers may compare the rates from only a handful of lenders. If you want to ensure that you're getting the best possible financing, you will have to do the research yourself. Because mortgage rates are so easily accessible by anyone online, it is a lot easier than it used to be to compare and negotiate with different lenders on your own. 

-ummm...well, speaking for myself, i get daily and monthly rate sheets all in one nicely formatted email. If you are concerned if you are getting .2% or .5% less than Prime then sure; you could save maybe $4 a month shopping for yourself but you won't know if that lender is 'competent, co-operative and competent'. Rates are pretty level across the board as public lending institutions are extremely competitive with each other. Plus, some brokers (like me) receive 'unadvertised discount rates' for preferred mortgage brokers. An advantage that online do-it-yourself'rs don't have.  


When deciding which type of financing is right for you, here are a few details you need to make sure you share with your mortgage broker or the lending institution you decide to work with. 

- please mention assets, please mention assets.

Prepayment 

How often will you be able to make additional payments on your mortgage without being assessed a penalty, and how much will you be able to pay? 

Frequency of payments 

Whether it's weekly, biweekly, accelerated biweekly or monthly, make sure the lender offers the payment frequency you feel most comfortable with. 

Penalties to breaking the mortgage 

Make sure that you are fully aware of what the penalty would be should you decide to opt out of your mortgage term. 

- These are actually details that the broker needs to share with you, not the other way around. These are all considerations in the 'fine print' of a mortgage contract. 

The one other thing you will need to decide is if you are going to go with a fixed rate or a variable rate. The advantage for variable is the penalty is awfully small compared to fixed...ask your broker to explain it.

Now...
details you need to share are your assets, liabilities, any breaks in work history the last three years. Your personal information, your SIN #, bank information, any other properties owned, current mortgage amount (if applicable), possibly the current appraised value of your house.

Unfortunately if you are paranoid this will bother you that I will be seeing so much of your financial life, but trust me, I see a lot of people's financial information...yours won't be anything spectacular. To share that information outside of my office is a severe breach of trust and criminally irresponsible. If I don't have your trust and confidence from this relatively anonymous blog or in person, then you will have to find someone you do trust or someone recommends. Ask around.  

Whether you decide to use a mortgage broker to help you through the home-buying process or to secure your own financing, it is important that you do your research so that you are happy with your decision. Some banks or lenders might give you the runaround, while a mortgage broker might be able to hold your hand through the entire process, securing a great rate for you. Or vice versa. Don't be afraid to shop around and ask for references whenever possible. 

Would you consider using a mortgage broker? 

-Thanks Krystal, Mortgage brokering is not rocket science - it's more data analysis with some sales thrown in and long-distance financial forecasting. Brokers are fast becoming a reasonable, growing option for a cost-conscious society. Nothing is more satisfying than having new business come to us because of someone else's referral. It's our way of knowing we are doing a good job.

Until next time...

Three Bank Mortgage Renewal Traps to Avoid

It's Mortgage Season! 

Three (3) Renewal Traps to Avoid; 

How do you get the most bang for your mortgage buck? By understanding you are the one in control of your mortgage. All banks want your mortgage payments. Here are three ways that banks will try to trap you into staying with them instead of finding the most affordable option for you.

Maybe I can convince you with this free pen as well? 

1. 'Encouraging' you to Renew Early

You do not need to renew early. Banks will call 6 months before the renewal date and say "if you renew early, we will give you best rate". The best strategy is to get the best rate from all of their competitors over the next 6 months.

For example, we can lock in a rate at 3.19% today. If rates go up before your renewal date, we will use the 3.19%. If rates decrease, we then use the lower rate.

Try to determine if your bank rep is smiling or growling. That helps.

2. Renewal Mail Outs 

Don't ever sign this! Banks will send out renewal letters, citing the 'convenience' of you not having to come into the bank yourself. Sometimes they will give you rates .5% higher then what they are currently offering new clients counting on you not to know the big picture. A .5% difference over 5 years is 2.5% profit for a bank. On a $400,000 mortgage, that's $10,000 you lost and the bank gained because you didn't liked the convenience of not shopping around.

This says a lot right here when it comes to mortgage renewals. 

3. Last Second Renewal 

They will contact you a week before your renewal date. If you are unprepared, you may agree to what they offer you. Never agree and call a mortgage broker! AKA - Me! Most mortgages can be turned around in 2-3 days.

Yes, I am Daffy Duck in this situation...

HOW TO AVOID THE ABOVE THREE SITUATIONS:

Email me here your renewal date. I will get in touch with you 6 months before your renewal and build a strategy with you. Worst case scenario, if I can't find anything better, I will negotiate directly with your current bank for you.

Don't pay money that you don't need to. Stay informed, contact a mortgage broker today.

What in tarnation?! Where's my cameo?