Yesterday we had a major lender reduce the discount off of prime by .25%. We also had one other major lender say something similar is coming down the pipe and to be prepared.
In my career, which is 7 years, this is only the second time I've seen this. I'm curious to see if other lender will follow or if it's a blip with this particular lender.
There's too much competition out there that now they've put themselves out of the market.
The bank is claiming there profit margins are diminishing.
Lenders have always disliked variable mortgages for this very reason.
I'll keep you posted!
Wednesday, April 27, 2011
Sunday, April 17, 2011
It's NOT always about the lowest rate.
First off this blog is in no way being written to bash any lender or bank out there. Every lender serves their purpose and are the right fit for someone. This blog is to make you, the consumer, aware that it's not always about the rate you see on paper. It's about the flexibility and options that you need in a mortgage. I like to say to people, "do you want the best rate or the best product". With the options of a mortgage broker you can get that best product!
Here's just a couple of many examples:
Yesterday I opened up my local paper and saw Prospera's "myStyle' low rate fixed mortgage product that offers free legals, appraisal and inspection or $1,500 cash back. Sounds great right? In theory it is great, however, the small print that comes along with this mortgage is a bit alarming. The biggest thing that stands out to me is the 12 month interest penalty...yes 12 months. That's 9 months more than standard. There is only a 10% increase in payments per year and no lump sums as well. http://bit.ly/e5ywbA All this to get their 'best rate'. That $1,500 doesn't sound very good anymore.
On the variable product they do something as well that some lenders do that is NOT GOOD. They don't allow your payment to increase when prime goes up. What essentially happens, especially now that we're in an increasing rate market, is that more of your payment goes to interest and the principal portion diminishes. This leads to negative amortization. I've seen a 25 year amortization jump to almost 40 years before. The person was quite upset when I explained to them what the bank was doing.
There's also the Vancity product that is quite low on the fixed rate. This isn't offered unless you take 2 other products with them i.e., RSP's, insurance etc. If you're not a member, prepare to pretty much move everything to them to get this rate.
As mortgage brokers we know the lenders that not only have pretty darn good rates, but they also have all the features that you have come to expect. You can't always find this with one particular bank or lenders' products. Remember it's not always about rate. Planning and working a mortgage around your needs is what's important.
Make sure that you at least give a mortgage broker a shot to see if they can help you make the right decision. You owe it in yourself to do so. We don't charge for a consultation and unless you're obtaining private money (seconds etc) we do NOT charge a fee to help out. The lender/bank compensates us.
Again, know that I'm in no mean going after any one lender or banks products. This blog is solely to make you aware to read the fine print, it could mean a lot.
Here's just a couple of many examples:
Yesterday I opened up my local paper and saw Prospera's "myStyle' low rate fixed mortgage product that offers free legals, appraisal and inspection or $1,500 cash back. Sounds great right? In theory it is great, however, the small print that comes along with this mortgage is a bit alarming. The biggest thing that stands out to me is the 12 month interest penalty...yes 12 months. That's 9 months more than standard. There is only a 10% increase in payments per year and no lump sums as well. http://bit.ly/e5ywbA All this to get their 'best rate'. That $1,500 doesn't sound very good anymore.
On the variable product they do something as well that some lenders do that is NOT GOOD. They don't allow your payment to increase when prime goes up. What essentially happens, especially now that we're in an increasing rate market, is that more of your payment goes to interest and the principal portion diminishes. This leads to negative amortization. I've seen a 25 year amortization jump to almost 40 years before. The person was quite upset when I explained to them what the bank was doing.
There's also the Vancity product that is quite low on the fixed rate. This isn't offered unless you take 2 other products with them i.e., RSP's, insurance etc. If you're not a member, prepare to pretty much move everything to them to get this rate.
As mortgage brokers we know the lenders that not only have pretty darn good rates, but they also have all the features that you have come to expect. You can't always find this with one particular bank or lenders' products. Remember it's not always about rate. Planning and working a mortgage around your needs is what's important.
Make sure that you at least give a mortgage broker a shot to see if they can help you make the right decision. You owe it in yourself to do so. We don't charge for a consultation and unless you're obtaining private money (seconds etc) we do NOT charge a fee to help out. The lender/bank compensates us.
Again, know that I'm in no mean going after any one lender or banks products. This blog is solely to make you aware to read the fine print, it could mean a lot.
Wednesday, April 13, 2011
Collateral mortgages
I really feel strong about the consumer, you, knowing about these collateral charges.
I sat with a realtor today and explained the difference of a good rate and a low rate and one is this collateral charge. She was blown away wi the differences. Always talk to a mortgage professional. One who has options and is not tied to one lender.
This video blog may not make perfect sense to you and if it doesn't, please ask me for more clarification. I just couldn't say what I wanted in a short video blog!
Here's the other two blogs:
'follow-up-on-collateral-mortgages'
'collateral-mortgages-yes-or-no'
I sat with a realtor today and explained the difference of a good rate and a low rate and one is this collateral charge. She was blown away wi the differences. Always talk to a mortgage professional. One who has options and is not tied to one lender.
This video blog may not make perfect sense to you and if it doesn't, please ask me for more clarification. I just couldn't say what I wanted in a short video blog!
Here's the other two blogs:
'follow-up-on-collateral-mortgages'
'collateral-mortgages-yes-or-no'
Tuesday, April 12, 2011
Where did all my friends on FB go?
Ever wondered why you don't see all your friends on your personal or fan pages anymore? I did and found out why. My conclusion is that FB makes way TOO many changes TOO frequently and doesn't tell anyone. It's kind of annoying.
Anyways, I had to create an event with this...
PLEASE READ:
THIS IS VERY IMPORTANT TO EVERYONE WHO USES FACEBOOK FOR BUSINESS OR PERSONAL REASONS AND WISHES TO STAY IN TOUCH WITH THEIR CONTACTS!!
Have you noticed that you are only seeing updates in your newsfeed from the same people lately? Have you also noticed that when you post things like status messages, photos and links, the same circle of people are commenting and you are not hearing from anyone else?
...The problem is that a large chunk of your contact list can't see anything you post and here's why:
The "New Facebook" has a newsfeed setting that by default is automatically set to show ONLY posts from people you've recently interacted with or have interacted the most with (which would be limited to the couple of weeks just before people started switching to the "new profile"). So, in other words, for both business and personal pages, unless you or your friends/fans commented on one anothers posts within those couple of weeks - you are now invisible to them and they are invisible to you!!
HERE'S THE FIX:
On your homepage click the "Most Recent" title on the right of the Newsfeed, then click on the drop down arrow beside it and select "Edit Options". Click on "Show Posts From" and change the setting to "All Of Your Friends and Pages" (you can also access the "Edit Options" link at the very bottom of the Facebook homepage on the right)
Note: Business pages do not have a newsfeed. Owners of business pages should adjust the settings on their personal accounts.
The good news is:
You can now view all of your friends and fans again.
The bad news is:
YOU ARE STILL INVISIBLE to a large portion of your list. If you want to re-establish contact, you will need to get the word out to ALL of your contacts by inviting them to this "event" or creating one of your own so they can read the post and adjust their settings.
To invite your friends:
Click on "Attending" at the top and then you will see an option to invite your friends under the smiley face. It’s public so everyone who logs onto Facebook can view it and even the friends who can’t see your posts WILL see the event invitation. You can also tweet about it, create a blog post or send out an email to your subscribers in hopes of reaching them all.
Anyways, I had to create an event with this...
PLEASE READ:
THIS IS VERY IMPORTANT TO EVERYONE WHO USES FACEBOOK FOR BUSINESS OR PERSONAL REASONS AND WISHES TO STAY IN TOUCH WITH THEIR CONTACTS!!
Have you noticed that you are only seeing updates in your newsfeed from the same people lately? Have you also noticed that when you post things like status messages, photos and links, the same circle of people are commenting and you are not hearing from anyone else?
...The problem is that a large chunk of your contact list can't see anything you post and here's why:
The "New Facebook" has a newsfeed setting that by default is automatically set to show ONLY posts from people you've recently interacted with or have interacted the most with (which would be limited to the couple of weeks just before people started switching to the "new profile"). So, in other words, for both business and personal pages, unless you or your friends/fans commented on one anothers posts within those couple of weeks - you are now invisible to them and they are invisible to you!!
HERE'S THE FIX:
On your homepage click the "Most Recent" title on the right of the Newsfeed, then click on the drop down arrow beside it and select "Edit Options". Click on "Show Posts From" and change the setting to "All Of Your Friends and Pages" (you can also access the "Edit Options" link at the very bottom of the Facebook homepage on the right)
Note: Business pages do not have a newsfeed. Owners of business pages should adjust the settings on their personal accounts.
The good news is:
You can now view all of your friends and fans again.
The bad news is:
YOU ARE STILL INVISIBLE to a large portion of your list. If you want to re-establish contact, you will need to get the word out to ALL of your contacts by inviting them to this "event" or creating one of your own so they can read the post and adjust their settings.
To invite your friends:
Click on "Attending" at the top and then you will see an option to invite your friends under the smiley face. It’s public so everyone who logs onto Facebook can view it and even the friends who can’t see your posts WILL see the event invitation. You can also tweet about it, create a blog post or send out an email to your subscribers in hopes of reaching them all.
Tuesday, April 5, 2011
Purchase plus improvements
Purchase plus improvements transactions allow the purchasers to finance the costs of immediate renovations or improvements through the mortgage loan by using the “Estimated Market Value”; value after these renovations or improvements have been done.
Here's how the program works at one lender which is pretty much standard across the board.
Conventional Loans – In addition to the standard purchase requirements, the
following criteria apply:
• Appraisal will be required. The appraisal report should indicate both values e.g. “Current Market Value” and “Estimated Market Value”.
• Lending value must be calculated using the lesser of the “Estimated Market Value” or the “Total Cost to Improve Value”.
• A quote outlining the work to be done, the cost of improvements and expected completion date must be obtained and reviewed prior to completion.
• Work must normally be completed within 90 days after completion
• An amount equivalent to the cost of improvements must be held back. The hold back should be released once the work has been completed, inspection report provided and any lien period has passed.
• No maximum threshold for the cost to complete renovations / improvements.
• Progress draws are allowed when renovations / improvements are major and progress draws requirements apply.
CMHC Insured Loans – CMHC will insure mortgages for purchases plus improvements.
• The loan to value is the lesser of the “purchase price plus direct costs associated with the improvements” or the “Estimated Market Value”.
• A quote outlining the work to be done, the cost of improvements and expected completion date must be obtained and reviewed.
• Appraisal is not required. Originator and underwriter are expected to ensure reasonableness of the “Estimated Market Value”.
• Purchase advance based on the property’s “Current Market Value” and additional advances to cover improvements based on the “Estimated Market Value”.
• Work must normally be completed within 90 days
• If the increase does not require Progress Advances, the hold back may be released upon confirmation that the work has been completed. The following documentation should be obtained prior to releasing the funds:
• letter from the applicant confirming renovations / improvements have been completed
• receipts showing invoices have been paid.
An inspection report confirming the renovations / improvements have been done may also be acceptable
-----
Even though the program is out there it is not widely used. Most people don't like the short time lines used and most people are capable or know someone very capable of doing the work themselves.
Here's how the program works at one lender which is pretty much standard across the board.
Conventional Loans – In addition to the standard purchase requirements, the
following criteria apply:
• Appraisal will be required. The appraisal report should indicate both values e.g. “Current Market Value” and “Estimated Market Value”.
• Lending value must be calculated using the lesser of the “Estimated Market Value” or the “Total Cost to Improve Value”.
• A quote outlining the work to be done, the cost of improvements and expected completion date must be obtained and reviewed prior to completion.
• Work must normally be completed within 90 days after completion
• An amount equivalent to the cost of improvements must be held back. The hold back should be released once the work has been completed, inspection report provided and any lien period has passed.
• No maximum threshold for the cost to complete renovations / improvements.
• Progress draws are allowed when renovations / improvements are major and progress draws requirements apply.
CMHC Insured Loans – CMHC will insure mortgages for purchases plus improvements.
• The loan to value is the lesser of the “purchase price plus direct costs associated with the improvements” or the “Estimated Market Value”.
• A quote outlining the work to be done, the cost of improvements and expected completion date must be obtained and reviewed.
• Appraisal is not required. Originator and underwriter are expected to ensure reasonableness of the “Estimated Market Value”.
• Purchase advance based on the property’s “Current Market Value” and additional advances to cover improvements based on the “Estimated Market Value”.
• Work must normally be completed within 90 days
• If the increase does not require Progress Advances, the hold back may be released upon confirmation that the work has been completed. The following documentation should be obtained prior to releasing the funds:
• letter from the applicant confirming renovations / improvements have been completed
• receipts showing invoices have been paid.
An inspection report confirming the renovations / improvements have been done may also be acceptable
-----
Even though the program is out there it is not widely used. Most people don't like the short time lines used and most people are capable or know someone very capable of doing the work themselves.
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