One of my favourite things about being a mortgage broker is bumping into a potential client who hasn’t ever used the services of a mortgage broker before and in this case, didn’t even know what a mortgage broker was.

I remember getting the text around 9:00 p.m. and I was just putting the finishing touches on a different mortgage file I was submitting that evening.

“Hi, I was referred to you by my REALTOR.  What is your best mortgage rate?”.   I answered back, “I’m just finishing up a mortgage submission, I will call you in 5 minutes.”  I always find the “best rate question” to be a way to start the conversation.   The conversation was about 15 minutes in length and I explained that a mortgage broker will do the following:

✅ Will most likely get a better mortgage rate and/or better terms
✅ Will spend the time to review the entire mortgage application upfront and look for any potential challenges.
✅ Will explain mortgage penalties and other mortgage terms.
✅ Will explain mortgage privileges such as pre-payment and portability.

The client mentioned they went to their bank for pre-approval already and had an amount that wasn’t exactly what they were looking for.   I offered to send her our introductory e-mail with our process, application, and other helpful information.  They agreed.

The next morning I woke up to their mortgage application (it was excellent by the way) and a text stating that our introductory e-mail had more useful information than their financial institution had provided.   I sent them our required documents list and to be honest and fair they thought the amount of documents we requested was too much.  I explained that their financial institution would ask for the same amount of documents, however, we like to invest our time into our clients to make sure that everything about their application meets/exceeds the lending qualification standards.  As it turned out there was an issue reporting on their credit bureau (an old Cable Company collection that was paid but not updated).  We were able to get this fixed with property documentation and by fixing it in advance saved us a lot of time when the clients made an offer to purchase a home and it was accepted.

The mortgage submission process was flawless, we had their mortgage approval back the same day without any conditions.   Their REALTOR, the clients, and the Listing REALTOR were all impressed and maybe a little shocked by the speed of our approval.  And while we would love to take all the credit for this, it helps when we have amazing clients who provide us with all of the proper documents, amazing REALTORs who have detailed MLS listings and contracts, and of course, amazing lender partners who take the time to also review mortgage documents upon submission.

I specifically asked this client how they liked using a mortgage broker.  I hoped to get some good feedback to help us improve our process and the information given.   Here are the hi-lites:

✅ Our response times were very fast.
✅ Our explanations were clear and easy to understand.
✅ The level of education provided far exceeded their financial institution.
✅ The mortgage rate was lower.
✅ The mortgage terms are better (no one had ever explained mortgage penalties and how they worked).
✅ Being able to have questions answered in the evenings and weekends was very helpful.
✅ Having a tailored pre-approval letter when writing the offer helped them during the purchasing process.

I always like hearing feedback whether positive or constructive.  It’s what makes us better.   And of course, the best compliment for us is getting a referral from our clients.  This lovely couple has already referred us 3 new clients.

We would love to help you with your next mortgage, answer any mortgage questions you have or provide you with a 2nd opinion.

Let us know how we can help!

I want to start by thanking my usual sources of information Chief Economist for DLCG Dr. Sherry Cooper,  RMG Vice President of National Sales – Bruno Valko,  and our friends at TD Economics.

The US and Canadian Economies seem to be diverging on two different paths.

The US is in an election year and everyone is laser-focused on the economy, seemingly out-performing expectations.  The US is posting higher-than-expected jobs and their inflation rate came in higher than expected.  In Canada, we received some good news on Tuesday when our inflation rate was lower than expected at 2.9% vs the 3.0% expectation.
Let’s examine our Canadian numbers:

2.9% – Inflation Rate Year-over-year
2.4% – Core Inflation Rate Year-over-year
-0.3% –  Inflation Rate Month-over-month

Groceries I think we are all noticing prices are pulling back down to 3.4% year-over-year down from 4.7% in December.   When I go to Costco, I notice that everything is “on-sale” back down to what their regular prices used to be.  It’s a good anecdotal sign!
To all the sun-seekers, your vacation prices are coming down.   Our shelter costs are still very high propped up by ridiculous housing policy and high interest rates.

The US economy doesn’t show many signs if any of slowing down.  In Canada we are lagging badly, even the Prime Minister is hoping for the Bank of Canada to start reducing rates.  We are directly affected in Canada by the US economy.   The 10-year US treasury yield is directly correlated to our 5-year Canada bond yield which we determine our fixed-rate mortgages.

So if Canada is lagging and the US is surging, what does this mean for people like myself who are renewing their mortgage this year?

We don’t know. However when I asked my magic 8-ball this morning “Will mortgage rates come down this year?”, I flipped it over to a pleasant “All signs point to yes”.

If you are purchasing a new home, renewing your current mortgage or planning on refinancing, having a discussion and making a plan that is suitable to your own situation.

We would love to help!

Our scenario comes from a recent client we helped with their mortgage.   Credit scores were good, employment and income were very good, but there was quite a bit of consumer debt.   The mortgage on the home was at a pandemic-low interest rate, and while it seemed silly to try to find a replacement option, the amount of interest being paid on credit cards and unsecured lines of credit was gut-wrenching. for our readers who don’t have the time to read to the end here is our Cole’s notes version.

Refinancing didn’t make sense – Sold Home – Paid Off ALL Debt – Bought New & Better Home – Lower Overall Monthly Payments – Better Cashflow ($1,500/mo.) – $25,000 put into savings – HAPPY FAMILY!

The first thing we tried to do was to refinance the home.  There was enough equity built up in the property to qualify for a mortgage refinance (more than 20%), but not enough to consolidate enough of the debt to make sense (especially at a higher mortgage rate).
We explored some other options such as an independent consolidation loan, a car loan refinance, and even a 2nd mortgage.   Nothing made the family’s situation all that better.

We asked the question, “How would you feel about selling your existing home and leveling up on a new home?”   The clients wanted to know more about this option.  Let’s break it down.

The home was purchased in 2019 for $350,000, with a 10% down payment a mortgage payment of $1,518.66 per month, and a mortgage rate of 2.89%.   The mortgage is coming up for renewal in December 2024.   Since 2019 the house has increased in value to about $480,000 due to some very nice renovations, modernization, and a market increase in price.  Their current mortgage balance as of November 2023 was approximately $287,111.00.   The debt they hoped to pay or consolidate in the refinance was close to $115,000.00 (a couple of credit cards, 2 lines of credit, 2 car loans, and a buy-now-pay-later credit card).  The interest rates on the consumer debts were, 19.99%, 19.99%, 28%, 3.9%, and 1.9% and the buy-now-pay-later had a rate of 33% if the full payment wasn’t received by July 2024.  Total monthly payments including the mortgage and all debt payments were approximately $4,300.00.

Remember, we didn’t have enough equity to refinance and accomplish the goal of a full consolidation   For this family in particular, their current home, while beautiful wasn’t meeting their needs (3 kids under 10, 2 dogs, 1 cat, a bird, and some fish).   We qualified the clients for a new home of $550,000.0o with a minimum down payment of $30,000.   They sold their home for $485,000 just before Christmas with a March 15th, possession date.  After fees, commissions, and mortgage penalty ($2,100)  they had about $173,500 left to pay out the debts in full.  They had a remainder of $58,000 to use for the down payment and closing costs.

They purchased a new home for just under $500,000 with a possession date at the end of February.   This home was bigger, nicer, and in the same neighbourhood.  We were able to secure them a rate of 4.99% for a 5-year fixed rate.   Their new mortgage payment will be $2853.10.   This is a lower overall payment of $1,457.13 per month because all of the debt will be paid in FULL!!!  This family will have an extra $1,500 per month in their budget.

For transparency,  there were costs.  The cost to sell the home (REALTOR, Lawyer, Mortgage Penalty), and there were costs to purchase the new home (Closing costs approximately $7800).

This solution worked perfectly for these clients.   A new home that suited their needs, one lower monthly payment, and $1,500 more cash flow for their household budget.  I forgot to mention they had a little money left over to put in their savings account of just under $25,000.

If you applied for a mortgage refinance and were denied, or the numbers didn’t make sense, please call us for a 2nd opinion!

Did you get your mortgage last year?  Are you in a Fixed Rate Term over 5.5%, maybe even over 6%?   Are you worried that you may have a very high penalty?

I’m writing this post today to tell you that you may be able to get out of your existing mortgage with a 3-month interest penalty, or a small IRD (interest rate differential).  This works particularly well if you have a mortgage that is insured with CMHC/Sagen/Canada Guaranty because you can transfer your mortgage to a new lender with a rate very near 5% –  In almost all cases a 0.5% – 1.2% rate reduction can save a staggering amount of money.

Here’s what we can offer:

1. A lower rate that can save you $1000s
2. Complimentary legal work through FCT or FNF Canada (The lender will cover these costs)
3. We can include up to $3,000.00 of your penalty into the new mortgage.

Contact us today for a complimentary consultation!

Yesterday, the US released economic data, which is already negatively impacting Canadian fixed mortgage rates.

US inflation numbers were 3.1%, which is above market expectations of 2.9%.  Core inflation also remains stubborn and it ticked up from 0.3% to 0.4%.   Immediately we saw our bond yields increase.  The 5-year Canada Bond Yield opened this morning at 3.79% (Remember the 5-year fixed rate mortgage rate will usually be priced 1.5%-2% over the yield).  The higher bond yields mean tighter margins for mortgage lenders and increases will most likely be coming today and tomorrow (Feb 14 and 15th).

Last week Statistics Canada Labour Force Survey is starting to show signs of increasing immigration.  Full-time jobs increased by 37,300 and part-time jobs increased by a whopping 48,900.   Many of the jobs are in the public sector and many were in the service sector.  The working-age population increased by 125,500 or 1,000,000 people year-over-year.  ONE MILLION PEOPLE! *insert Dr. Evil laugh here*

Canada is challenged.

1. Population explosion.
2. Housing shortage.
3. Interest rates are being dragged up by a hot US economy.
4. Terrible mortgage policy for over 12 years.
5.  Infrastructure concerns (schools, roads, services, transportation, health)
6.  Wages are up over 5% year-over-year.

I’ve been saying this for quite a while now that I think any rate decreases are going to be slow and steady barring the occurrence of a major calamity (financial, health, war, weather).  This early rate reprieve may be coming to an end.  It is a great time to call us for a 2nd opinion on your existing mortgage.  If you are going to purchase this year, it’s an even better time to get pre-approved and lock your rate in!

If you made it this far, contact us right now and we will be happy to answer your questions.

It’s easy to think of your mortgage transaction as a “one & done” scenario.  Many people in the mortgage industry, from bankers to loan officers to other brokers, can provide a transactional service.   You’re another number, a notch on the post, and a check-mark on the spreadsheet.   The mortgage product you may have may have been the best rate at the time and it may have been the worst.  The terms may be excellent, or not so excellent.  It doesn’t matter to the transactional salesperson.  It reminds me of Alec Baldwin’s famous scene from Glengarry Glen Ross “ABC – Always Be Closing” (for your reference here is the YouTube link https://www.youtube.com/watch?v=AO_t7GtXO6w).  This isn’t how we’ve ever viewed our business.

We prefer a different approach.  In the spirit of Glengarry Glen Ross, I was trying to think of a good acronym and came up with PRESS.  We always want to have good PRESS!!!
P – Partnership
R – Responsive
E – Educational
S –  Supportive
S – Secure

We apply this holistic approach to our business so that we can provide you with a lifetime of excellent mortgage advice for you, your friends, and your family.   We can explain and educate you why we are recommending to you a product, rate, term, insurance coverage or referring you to one of our excellent industry partners.  When choosing to partner with clients, REALTORs,  lawyers, insurance providers, financial planners, etc the standard we’ve always used is if we would refer them to our parents.  If the answer is yes, we would love to work with you!

As mortgage professionals, we are more than just the rate and the transaction.  We can recommend the right products, lenders, and strategies that will give you financial savings and peace of mind.

Contact us today for a complimentary 2nd opinion about your mortgage.

This isn’t a trick question.  Many of the big banks in Canada this week are offering 120-day locked-in pre-approvals/rate holds of 5.7% or higher.   There isn’t any reason for a borrower to agree to pay more.

Before we get into the large sums of money that can be saved, I wanted to take a moment to mention the virtues of using a mortgage professional.

1.  If rates go down during your pre-approval period, we will automatically get the lower rate for you.
2. When you purchase a home we will again shop your rate around to all of our 20+ lenders.
3. We are going to review all of your documents up front, check your credit, and about 140 more items to ensure your pre-approval is as bonafide as it can.

These three features on their own should be enough to convince anyone to use a broker.  But WAIT!  THERE’S MORE!  There are massive savings that you can realize as a borrower.

Our average mortgage size over the last 3 months has been $330,000.00.  Let’s compare 5.7% vs 5.14% for a 5-year fixed insured mortgage rate over a 25-year amortization.

$107/month lower payments.
$8,906 less interest paid over 5 years.
$2,474 more principal paid over 5 years.

The savings are substantial.

What happens if you apply the $107/month payment to the principal each month (an apples-to-apples comparison)?

The payments will be the same ($2,053 per month if you’re wondering).

$9,779 less interest paid over 5 years.
$9.767 more principal paid over 5 years

But WAIT! THERE’S MORE!

If you simply increase your payments to match there is an added benefit that the amortization of your mortgage drops from 25 years to 22 years and 7 months.

It really pays to speak to a mortgage professional.  We can help you save $1000s of dollars in unnecessary interest and fees!

Contact us today!