Why are you moving now?

As a Calgary Mortgage Broker I get asked: Should I move again?   You Realtor friend says move, and Upgrade!    Should you listen?  All I ever say is do the math before wanting a new home.

The average person moves homes every 3-7 years and has 5 homes over their adult life.  In that process they pay fees for lawyers, realtor fees, inspections, movers, getting it sale worthy, and appraisals all which is money you will not get back.  For the record we are not talking about the flippers, who if and when they do get it right circumvent paying taxes on sweat and labour because your principle residence is exempt from capital gains tax. 

Is now common knowledge that a portion of the population has nomadic tenancies, and want to move to follow the heard, and maybe because they are bored.   That is why many get a portable mortgage, so they can take it to their new property.

Before you sell your house, and buy a new one, do some fun math, and figure out what you will save by staying, what you will spend by moving.   Figure out timing so you don’t have to pay extra charges to get out of your mortgage if you are not porting it.   Then think about what you can do with the money in your current house by not moving.  Would a new kitchen or something new around the house make it a little less boring and a tad more exciting?

We can figure out what is the best plan, if you need some help with budgets, or asking the tough questions.  That is why we are here to save your money on your mortgage, get you the best interest rates, and get your new house approved should it be that time in your life.  Contact a Calgary mortgage broker today.  And for the record we can help all of Alberta with their mortgages!

Marital Breakdown? What can I do with my mortgage?

If Marital Breakdown is looming what happens to the mortgage? Can you keep the house? Can you refinance your mortgage without the other party?

There is so much to consider when dealing with a divorce so if you don’t feel like reading and just want to talk, or you are just reading for the sake of research as an Alberta Mortgage Broker I would be more than happy to talk or text through your troubles.  If you just want to know my thoughts and some facts, just keep on reading.

You don’t have the 15% to refinance with the new rules, or your spouse wants to be paid out, or maybe they are threatening a lien on the house.   There is hope after all.   CMHC has some unwritten rules when it comes to this, and knowing a Calgary Mortgage Broker who speaks with them all the time can save you time, stress, and pressure.

CMHC has a program where they will under certain circumstances take your loan back up to 95% Loan to Value (LTV). The main advantage of this new possibility is that you will not be mandatory to come up with 15% equity to refinance.  You can buy out your spouse with the difference, or you may be able to use and option to receive a ‘gift’ of 5% of the value of the home.  This comes from your ex-spouse which acts as your new down payment. This does have its advantageous for payout of joint debt or paying off high interest rate credit cards, and will make the separation easier to handle and hopefully keeping your credit rating intact as possible.

• You must have good credit
• There must already be a finalized Separation Agreement in place.
• Gift letter for the 5% gifted equity by the spouse who is leaving the home
• A statutory declaration must be signed 

 

If you are looking to refinance your mortgage due to a marriage breakdown and are still not sure what to do give me a call or text.  Being a trusted Alberta Mortgage Broker is not always about the best mortgage rates, its about helping people stay in their home.

Finding that down payment, before the rules change again?

Balancing “today you” and “future you” is something we all think about.  Weather its letting the chores pile up so that your “future you” can do it so that “today you” can watch TV is a form of procrastination that many comedies poke fun of.  However saving for a mortgage down payment is no laughing matter.  It’s increasingly hard to do when the rules are changing all the time.      How does one look at creating a nest egg, while increasing its value, and flexibly without having to sacrifice today?  But you want into that home mortgage as soon as possible right?  

There are some tips from a Calgary Mortgage Broker to help you with that.

You can save inside a RSP for a Home buyers plan redemption, or a Tax Free Savings Account, and invest in just a savings account to GIC’s Bonds, mutual funds or even stocks.  Each has different time horizons, and risks.

I do think that the HBP is a great way to save for the purchase of a new home and putting the tax refund towards to the down payment sure does work too.   Before you consider not replacing the money taken out consider that in most cases normal Canadians will need some extra income when they are older for retirement.  However on each side of the spectrum the wealthy do not want more income at their regular tax bracket and the very poor do not want the income as it would bump up their rent or assistance they are getting.

Regardless you should wait 90 days before you plan to withdrawal your funds as this will leave you in a enhanced situation to control if you will be able to have enough money to refill your RRSP. This provides you with flexibility.    The total withdrawals do have to be back into your RRSP each year for 15 years.  Some decided to do this quickly and some decide to take the tax hit every year and don’t replace them.  

Starting up a monthly contribution to replace or to start the nest egg is key to flexibility as you will not notice a small amount being taken off your paycheque. When you do your taxes it is nice to receive a tax refund for any amounts you contribute above the minimum you have to repay or you saved up over the year.   Many do a Investment loan as well more than 90 days out, this if done a the right time of year will also net you a big rebate back.  Even more so if it bumps you down a tax bracket.

If you need some help with investing, planning, or figuring out a plan to get you into the lowest rate mortgage, give a Calgary Mortgage Broker a call, and get some free advice.

What did the bond rate do now? Down Down Down!

Source: Bank of Canada

A Calgary Mortgage Broker  has to watch the bond rates every day to see what is going to happen next to the Mortgage Rates.  They are heading down, and if they stay that way, the Mortgage Rates will go down to.  Read on for an explanation!

Questions:

How Do Bonds Affect Mortgage Interest Rates?
How Do Government Bond Yields Relate and Affect Mortgage Rates?

Answer:

Bonds are eye-catching to investors who want a fixed and established return on their investment. Most lenders and Banks fall into the classification.  In a typical market, the average "spread" or mark-up above the government bonds is about 120 basis points, or 1.2%. That mark-up widens and contracts with a variety of market circumstances, investor appetites, and amount of available product -- as well as the presence of rival investment opportunities.

Government bonds are 100% guaranteed to be repaid, but mortgages are not; therefore mortgages carry more risk of default or early payout, which could potentially disturb the return on the investment. Therefore, mortgage rates must be priced higher to compensate for that risk.

I bet you are trying to figure out if you should lock in your mortgage with a fixed rate or go Variable?

Traditionally I would always recommend a variable.  But with rates so low and the bond rates going down and the 10 year rate being within 1% of the 5 year rate I would say lock it in for 10 very soon!

If you are still apprehensive you don't necessarily want to choose. A couple of lenders have programs where you can have one mortgage charge and multiple terms.  Which means it will eliminate your stress with a solution to split your mortgage into chunks and diversify your borrowing across variable and fixed terms.   A format that has proved to be very popular from my days investing clients’ money into GIC’s and Term Deposits.  Diversification of your interest rate risk can minimize your interest rate risk and potentially lower your interest charges.   

Give your friendly Calgary Mortgage Broker a call to see how we can help you.

Can I port my Mortgage?

Do you think that when you port the mortgage if the mortgage amount or the term is the same then it would be easy to arranging a mortgage valuation on the new property, have the bank check a couple of things then assign the mortgage to the new address?

In today’s market place this is no longer the case.

With amortization periods lower, and lenders criteria of what they can now finance having tighter guidelines.  It effectively means you have to re-apply for the mortgage before you can move it over. All with tighter guidelines and rules than before.

Yes, the potential exists that you will be asked far more questions than you might have been previously.    The paper chasing you had to do when you first applied will have to be replicated and you might even need a couple more things this time!  

Before you get mad at your Calgary Mortgage Broker, for wanting more stuff, you have to remember that, when it comes to moving your current deal to a new property, you have to meet the lender's criteria at that specific point in time. So, while your situation might not have changed, their lending criteria might have become much stricter, which means you may no longer be eligible to transport your mortgage over.

What should I do if they won’t port me?

Sadly, early redemption penalties would apply and your best bet is to move lenders, just don’t move at all.

While the big banks market share is decreasing as a result of these changes the companies that service clients with a slightly more lack underwriting rules have taken these clients and have moved in excess of 5% up the market share ladder, which in terms of dollars and cents are big moves considering the amount of total Mortgage debt in Canada is sitting at over 1 Trillion Dollars

Porting a mortgage is no longer an easy choice to be taken lightly without considering the repercussions.  Talk to a Calgary Mortgage Broker to see what your best course of action is.

Are all Bankers the same?

In my 11 years at the bank, I still easily recall training lenders who no matter how you explained it, could not grasp some of the simple concepts.   Then there were the ones I trained who were like a sponge, and absorbed everything I threw at them regardless of the pace. 

I see evidence of bad bankers all the time when I review the liabilities of a client.  When I see credit scores of 734 and an interest rate that is indicative of a high risk lender I shake my head and wonder.  Selling is helping is not always the case when the interest rate is not competitive.   I think this is partly caused by the promotion mentality.  The lender wants get enough experience to be rounded out enough to become a Branch Manager, or Regional Manager where the pay is more rewarding.  The promotion mentality which has high turn over in these roles is counter productive to keeping a client for life and building that relationship.  When I go to the branch where I do my banking, I have seen a new person in that role at least twice a year.   Where did they go?   Why did they leave me and give me this separation anxiety?

As a Calgary Mortgage Broker I am not aspiring to become a Branch Manager, nor looking for career progression.  I know the more clients I make happy, the greater my chances of creating super-fans are.  These super-fans will wear my colours and scream and shout to tell other people about the most excellent customer service ever, all while sporting my face on the back of their cape.    They know I will not be leaving, rather creating repeat business by being there for them for years to come.  Its all part of my value.

Don't get me wrong I am sure there are bad brokers as well.  Bad customer service maybe, bad attitude, check, and I have met many part time mortgage planners that have other full time jobs.   Do these people have the time to stay up to speed, and be masters at what they are doing?   We are talking about peoples money here after all.  Would you not want someone who dedicated their entire attention to the field?   Mastery takes 10 years of full time effort at the very least to accomplish, which is close to 10,000 hours of dedication. Its took Albert Einstein 9 years of thought experiments in his patent office to get to a level where he came up with Relativity.   How long would it take if you were only part time at something?

That is why my team I work with have all been in the industry for well in excess of 10 years and do this full time.  Which means that if I need a sounding board, or help with anything I know my team has my back.

The simple fact is we all have different views, different objectives, different ways of dealing with clients.   Every client has a certain way they want to be treated.  Some like a no nonsense approach, while some love to have a laugh along the way, which I am told I am more than capable of providing.

Adapting to my clients needs is one of the fun aspects of my job, and is second only to the smile caused by a closed deal and seeing the clients eyes light up when they know they about to get their keys to their new home.

Have you met a bad banker?

Have you met a bad broker?

What questions did you use to make sure they were up to your standards?  Tell me the story below!!!!