It’s not over till

It’s not over till the fat lady sings, or in the case of your mortgage till your lawyer receives the funds. So just because you have received a file complete on the purchase of your new home, it does not mean that it is time to go on a shopping spree and go wild. The lenders continue to work on your file behind the scenes up until your closing date.

Any material change that you make from the date you received word that all your conditions were met until the closing date may in-fact effect your ability to close the transaction.

Here are a list of 10 things in no particular order of what NOT to do prior to closing on your new home.

  1. Don’t quit your job.
  2. Don’t suddenly become self employed
  3. Don’t commit a crime or get arrested
  4. Don’t finance your furniture
  5. Don’t finance a new vehicle
  6. Don’t get divorced
  7. Don’t go on a spending spree on your credit cards
  8. Don’t close any credit accounts
  9. Don’s apply for new credit
  10. Don’t increase the limits on existing cards

“Before you attempt to beat the odds, be sure you could survive the odds beating you.” Larry Kersten

Today I am thankful for a smooth closing, a starry sky during our morning walk and new applications that come in while I was asleep.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Rate change

Last night I received notification from several of my lenders that they were reducing their 5 year fixed rate. Depending on the lender reductions were anywhere from 10 to 40 basis points. Remember one hundred basis points = 1%. However you know what did not change? The variable rates did not change. This is because the variable rates are based on the bank of Canada prime lending rate and the fixed rates are based on bond yields.

If you are renewing your mortgage or buying a new home, I always ask my clients if this will be your forever home. If the answer is yes then there is nothing wrong with the fixed rates. However most 5 year mortgages are broken around the 38 month mark of the 60 month term. If you are on a fixed rate this will possibly trigger a large interest rate differential penalty.

Since the Bank of Canada meets only 8 times a year to discuss monetary policy and the last time they increased the prime lending rate was Oct 30th of 2018, I am putting my own mortgage on variable this time. This along with the fact that if I needed to break it at any time the penalty will be only 3 months interest. The choice is yours to make, as your trusted advisor I supply you with the information you require to make the best decision.

Today I am thankful for the kindness of strangers at Costco this morning, my dog seeing his favourite other dog on our morning walk and funny texts from my brother on his birthday.

“The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” -Albert Einstein

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Trusted Advisor

To me it hasn’t seemed that long ago when if you had car trouble someone always had a guy who could fix it at his place. It didn’t matter if it was as simple as brakes or a complicated as major motor work, it was all possible in someone’s back yard. Now vehicles are so complicated it is in your best interest to trust the repairs to the experts at the dealerships or major garage networks.

The same can be said for your taxes. If you were self employed like I am you kept all your receipts in various shoe boxes and worked through them at the end of the year in the hopes that everything made sense. Now it is best to seek the expert advice of a competent tax specialist or accountant. Also no more shoe boxes, everything is tracked with state of the art online accounting software and filed electronically.

Also some times you think that you know the right thing to do but in hindsight you didn’t. Dealing with a trusted advisor or expert is in your long term best interest, whether it be for your car repair, taxes, financial planning or yes even your mortgage. There is more to consider when deciding on your mortgage than just the interest rate. You need to consider term, fixed or variable, amortization, pre payment privileges, post closing support or portability.

“From my experience, the best advisors help in three ways: encourage you to look at the problem or opportunity from multiple angles; help you balance the tug of the short-term with important long-term priorities; and ask the tough questions you need to know to reach the best solution.” Margo Georgiadis

Today I am thankful for the advice of experts for challenges that came up recently, for how much better I feel knowing I have competent people to help me and for the change of pace the weekend brings.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here


Request Declined

Sometimes it happens that your mortgage request has been declined. More often than not this is an opportunity to restructure the request and start again. See if any debts can be repaid, have you included all the assets and properly explained the sources of income and all your debts? Can you increase you down payment or have someone co-sign with you to strengthen the file. Or better yet does it qualify for an exception?

Don’t give up hope just because you ran into a brick wall with one lender as there are plenty of other lenders who may be able to assist you with your mortgage request. There are lenders for the self-employed, high net worth, less than perfect credit or if you have foreign assets or income. I have frequently found that persistence does pay off so don’t take the 1st no as tragic or permanent.

“It is during our darkest moments that we must focus to see the light.” – Aristotle

Today I am thankful for the fact that there are always more options than problems, that rejections and failures are not fatal as they are opportunities to learn more and better for next time and that the traffic jam on the bridge had cleared up by the time I need to go back to Halifax.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

The best time

The best time to buy a house according to the old adage is always now. In this hot real estate market and thanks to rock bottom interest rates, you will be paying down principal much faster than you are paying in interest. For example if you bought a house for 550K with 30K down on a variable rate of 1.35% over 5 years, you would pay 33K in interest in the 1st 5 years while paying down your principal by over 94K.

The best time to invest according to legendary investor Warren Buffet is always now. It also helps to follow his investment advice of buying and holding for the long term. Trust me I am still kicking my self for selling my Apple stock in 2014.

The best time to start a business like the two previous statements is always now. With a long term outlook like your real estate and your investing and old school work ethic you are sure to succeed.

“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” – Warren Buffett

Today I am thankful for the bodyweight warrior who helps keep me limber on the daily basis, seeing a doe and her two fawns eating apples near our home in the west end on Halifax and having fully formed ideas come to me while out on a run. Awesome.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Appraisals

Usually when you pay for something you own it. The exception to this rule is for real estate appraisals. When and if they are required, they requested and owned by the lender. On the odd chance that we your broker have a copy, just remember that we can not release it to you.

Appraisal are required if you are putting more than 20% down on a property and high ratio mortgage insurance is not involved. However there are a few lenders who use an Automatic Valuation Service to confirm the value of the property thus negating the need for a full appraisal inspection. Also as of late appraisals have been required if the agreed upon purchase price exceeded the listing price by a large margin. This is because of our hot real estate market.

Today I am thankful for the huge rush of endorphins after my run this morning, everyone should get to experience these natural feel good emotions on a regular basis and that we have cooler nights which make for wonderful sleeping conditions.

“Elevate what you want – because what gets measured, gets produced.” James A Belasco

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

New Clients

The best kind of new clients to get come from referrals. This could be from past clients or referral partners like realtors or financial planners. This is because they come pre screened from a trusted source so they are people who really know what they want and have already been told who you are and how you operate.

This is why I spend time every day developing relationships with these same referral partners. Every day I reach out and connect with my referral partners. To those who are afraid of cold calls, these calls are not cold and there is no selling involved. The purpose of my calls is just to touch base and keep the lines of communication open and see how people are doing. It’s not complicated, just just relationship building. If you are in sales, this is what you should be doing.

I am certain you can bring in a large amount of leads and or contacts from doing Google adwords, Facebook or Linkedin ads. However what’s missing is transfer for trust from someone you have developed a relationship with. So more often than not considerable time must be spent with these new contacts to develop the report and see if we are a fit or not. The best strategy for long term growth is to spend the time developing the key relationship that will attract you the people you want to work with in the first place.

Today I am thankful for a great 50K ride with folks from the gym, that all the peloton classes are paying off as I kept up with bikes 1/4 the weight of mine and for an early start so work can be done for the rest of the day.

“Referrals aren’t given easily. If you don’t take the time to establish credibility, you’re not going to get the referral. People have to get to know you. They have feel comfortable with who you are and what you do.” Ivan Misner

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Extra Payments

If you are one of the lucky few who’s mortgage is coming up for renewal in the next few months, this post is for you. Let’s say for example that you will have a mortgage balance of 300K at renewal and that you have been at 2.79% for the past 5 years on a 25 year amortization. Upon renewal you are offered a fixed rate of 2.09 or a variable rate of Prime ( 2.45) less 1% or 1.45.

So 5 years ago you started at 350K at 2.79% and you have paid 1,618.88 per month, you did it with no struggle and now you have an option to renew at lower rates. For example if you take the fixed at 2.09 your monthly payment on a 20 year amortization will now be 1,529.18 or 89.70 less than what you were already paying. Now if you took the variable rate your payment would drop to 1,426.52 per month with a savings of 192.36 per month.

Now since that 1,618.88 was not a hardship, I would strongly recommend keeping your payment the same. You do this by taking advantage of the lender’s pre payment privileges. So your 20 year amortization has now shrunk by almost 3 years to 17.25 years. This is the power of the extra payments as they go directly onto your mortgage principal. This was based on taking the variable rate, and note however that those rates may change. At the end of this 5 year term your new mortgage balance will be 220K. Check out the stats below. Here is the link to the calculator.

Mortgage Summary

 Over the 20-year amortization period, you will:

  • have made 207 monthly (12x per year) payments of $1,618.88 ($1,426.52 + $192.36) and one final payment of $1,397.28.
  • have paid $300,000.00 in principal, $36,504.67 in interest, for a total of $336,504.67.

 Over the 5-year term, you will:

  • have made 60 monthly (12x per year) payments of $1,618.88 ($1,426.52 + $192.36).
  • have paid $79,541.69 in principal, $17,590.89 in interest, for a total of $97,132.58.

 At the end of your 5-year term, you will:

  • have a balance of $220,458.31.

 Prepayment Savings

  • By the end of the amortization period, with your monthly (12x per year) prepayment of $192.36, you save $5,859.24 in interest and pay your mortgage off 32 months sooner than if you had the same mortgage with no prepayment.
  • By the end of the term, with your monthly (12x per year) prepayment of $192.36, you save $390.37 more in interest than if you had the same mortgage with no prepayment.

Today I am thankful for my cousin introducing me some new music, great conversations with new clients and seeing wildlife during the morning walk with my dog.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Future Homeowner

Any goal worth achieving will take some planning to make happen. Take our hot real estate market for example. If you plan on buying a home in the not too distant future then you need to start to work on a few things to make that happen. We are going to look at the two most common road blocks to home ownership, being credit and down payment.

If you don’t already know your credit score, you should surf over to Equifax ( One of the main credit monitoring agencies) and get a copy of your free credit report. If you have had late payments to your creditors in the past then they will need to be paid as soon as possible. If you have not had credit in your name in the past then you will need to get a small credit card or revolving loan. Something that reports to the credit bureau with a limit of at least 1,500. Now here is the important part, never miss a payment or be late with a payment as this will impact your credit score.

Now that you are working on your credit and you have a plan to establish it or improve it. Next important item in your home ownership journey is your down payment. You are going to need at least 5% down payment and 1.5% of the purchase price as deed transfer tax. If this is going to be your first home you can take advantage of the Home Buyers Plan. This means that you can borrow up to 35K from your RRSP tax free ( it does have to be paid back) and use this toward your down payment. Otherwise starting putting some away from every pay check and stick it in a TFSA and watch it grow to the amount that you need.

“A house is made of bricks and beams. A home is made of hopes and dreams.”

Today I am thankful for the sound of rain overnight, a quiet walk with my dog and a refreshing run all before the craziness of the day started.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Exceptions

Rules in life and in mortgages are made to be broken, on an exception basis. Lenders look at your mortgage application and judge it based on the 5C’s of credit ( Character, Capacity, Credit, Collateral and Capital). Having a strong strength in 4 out of the 5 would be grounds to request an exception.

Note however that if the area that is suffering is credit, it is highly unlikely an exception will be granted. Most often the exceptions are coming from the Capacity or the debt service component. This is usually due to the applicant’s above average credit rating, high net worth and low loan to value.

There is nothing to lose and everything to gain by requesting an exception to get your file approved and completed. We must just build the case to show a compelling reason for the exception. More often than not lenders are willing to do it if the strength of the other factors outweighs the deficit.

Today I am thankful for an exception that was granted that allowed one of my clients to become a homeowner, a wonderful visit to my brother’s cottage and 80K bike ride with friends.

“Nature provides exceptions to every rule.” Margaret Fuller

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here