Got time to chat?

As much as mortgages are about numbers, debt service ratios, pre approval amount and interest rates, they are at the end of the day a people business. If you have any questions about your mortgage whether I did it or not, feel free to give me a call and I would be more than happy to help you out.

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

Cheers,

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).

Real Estate Bubble???

We are in the midst of a crazy real estate market from coast to coast here in Canada. Properties are selling very quickly and in some cases there are multiple offers and they are selling not for thousands of dollars over list but hundreds of thousands of dollars over the listing price.

Here in Nova Scotia in particular where we are used to only modest gains in values of only single percentage points. There was recently a transaction in my subdivision, single family home, bungalow, 4 bedrooms, 1 bathroom and unfinished basement. The property had not been on the market since new 54 years ago. My Realtor told me that this home had 28 offers and sold for just under 300K over list price.

Now unless you have been under a rock lately you have heard some of the financial pundits talking about a possible real estate bubble here in Canada. While that headline does get a lot of attention, I don’t believe that is the case nor will we experience the pains that the US felt back in 2009.

A few facts to consider, since we are still in the midst of a pandemic our borders have essentially been closed to all except for necessary travellers. Normally Canada welcomes about 500K people per year to immigrate here but now it is down to just a trickle. Real estate inventories on the market are down compared to past years. So with low interest rates, record levels of immigration prior to the lockdown and general population with money to burn has only poured fuel on the fire that was already present.

Knowing this I don’t think we are on the brink of a similar bubble the American’s faced in 2009. We don’t have lenders making loans with low or no documents, nor do we have people qualifying for their mortgages on teaser rates like they did. Our mortgage stress test was implemented in 2016 and has served us well. With discounted AAA rates now at 2.24% and the qualifying rate still at 4.79% I would say that we still have a great buffer in place to protect consumers from rates rising too quickly.

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

Cheers,

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).

Don’t put all your eggs in one basket

Warren Buffett is famous for saying this in regards to your investments, as it opens you up to greater risk. However I want to also tell you that it applies to your banking relationships as well.

We have some great banking institutions here in Canada. There are lots of great options for your personal banking, your investments, your mortgages and your commercial banking. However it’s best if they were not all with the same lender. Let me give you an example of why in regards to your mortgage.

The majority of lenders these days are securing your mortgage as a collateral charge. What this means is that they are registering the loan for the value of the property or the value + 25% depending on the market. The advantage of this is that it allows the lender to offer you a line of credit without you having to incur additional legal or appraisal fee’s. While that is convenient but what if you also have all of your savings, chequing and credit cards with the same lender and for some unforeseen reason you missed some credit card payments, because all of your lending is with the same source you could have your mortgage foreclosed upon because of a credit card default.

The solution is to make sure that your personal baking ( checking, saving & investments) are with lender ABC while your mortgage is with lender DEF, and your credit cards could be with lender XYZ. Diversify your personal banking as much as you diversify your investments.

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

Cheers,

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).

All your ducks in a row

When you leave for a vacation do you scramble around the morning of your departure cramming suitcases and trying to think if you have everything and then invariably arrive late to the airport and almost miss your flight. I am sure there are some of you that do that but I assure you that is not the best way to go.

If you want the smoothest experience as possible it’s always best to plan ahead. That is the same way that I approach getting your financing for your property in order. For most of us this is the single biggest financial transaction in our lives. Wouldn’t you rater that it be as stress free as it can be for all involved.

The way that we do this is to work with you and gather all the pertinent documents upfront and then thoroughly review them prior to submitting them to the prospective lender. Thus allowing for your financing to get approved as quickly as possible so then you can focus on the other important things in your life.

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

Cheers,

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).

30 Days out

For those who have received an email from me, you know that the tag line of my email is ” An easy, stress-free mortgage process tailored to meet your unique needs. Guaranteed!” Not every broker in the mortgage industry can say a statement like that, and do you know why I put it out there? It’s because I work to insure that your mortgage request file is complete at least 30 days prior to funding. I don’t and you don’t need the stress of scrambling for paperwork in the days leading up to closing on your new house or your refinance. If you want to wait till the last minute to get your paperwork in order I am sure there are lots of other brokers and bank specialists would would love to work for you. It’s just that I am not one of them.

When we work together and hopefully we will soon, we need your complete document package upfront and upon submission. I will provide you a list on our initial phone call and once I have all your doc’s in order then and only then will your file be submitted for approval. Excellence is expected from me as much as it is from you. With cooperation from both parties this can be as stress free as possible.

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

Cheers,

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).

Ides Of March

Unless you are Julius Caesar you have nothing to fear about the Ides of March. Before Brutus and Cassius made March 15th infamous it was notable for several Roman religious observances. Notable of which was the feast of Anna Perenna the goddess of the year, which people commonly gathered for picnic’s, drinking and revelry.

However one of the lesser know facts about today was that it was also the deadline for settling debts. Speaking of debts how are you making out with yours? Are you settling your debts every month or are you just treading water making the minimum payments. As a homeowner, there is no better time than now to look at combining all your debts into one payment.

Some of the benefits of refinancing and consolidating your debts using your home equity is that you will get access to much lower interest rates. By paying off high interest loans and keeping them paid off you will improve your credit rating. You can apply the snowball method by using your savings from the refinance and put that towards your mortgage payments and thus become debt free so much faster. Here is a link for a great snowball calculator.

Contact my office and we can work out some numbers to see if it is worthwhile for you.

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

Pat

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).

10 Things NOT to do once your financing is approved.

Congratulations you have just been approved for a mortgage on the new home that you are buying. You went through all the steps with your banker or broker and now all you can do is wait till you pick up your keys on the closing day in a few weeks.

You may think that just because the bank signed off on all the conditions that you are free to do what ever you want and that there would be no repercussions effecting your purchase. Sadly this is not the case. 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

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

Pat

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).

Subject free offer’s

This is when you write an offer to buy a property without any conditions. So there would be no financing condition, no property inspection and no subject removal period. Once accepted by the vendor ( the seller) it’s a done deal. Well at least in your mind and the sellers mind it’s a done deal. Unless you have the cash on hand don’t do this, and I’ll tell you why.

Yes I know that the real estate market across Canada is crazy right now. I was speaking with one of my local Realtors this week and he told me about a property in my subdivision that was listed for 349K, had 28 offers and ended up going for 646K. This was absolutely un heard of almost a year and a half ago.

That 60 second pre approval you have in your hand isn’t actually a pre approval. However unless they pulled your credit, reviewed your income and verified your down payment, it’s most likely a rate hold. That is great as fixed rates have been increasing lately but it does not allow you the put in a subject fee offer.

While it’s true that we have many sources of funding available to you in Canada these days. If you were thinking of going subject free and using 5% down payment, those sources have now shrunk to 3. This is because we only have 3 high ratio mortgage insurers in Canada, CMHC, Canada Guaranty and Sagen ( formally Genworth). Also a bad idea if you are putting 20% down or more as lenders will require an appraisal. Now what if that appraisal comes in less than your agreed upon price? If this happens you will have to make up the difference from your own pocket.

Lastly if you are putting in a sight unseen offer, as these have been happening. You could find out that the house has a cracked foundation, was a former grow op/meth lab, has a mold problem or is just plain non conforming. You may be perfectly suited to getting financing but that house is not.

For most people this is your single largest financial transaction in your lives. Don’t put yourself in jeopardy by presenting a subject free offer.

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

Pat

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).

Peaks and Valleys

There are seasons to the year just like there are peaks and valleys to your life. If you are like many where the last year with the pandemic was challenging for you both personally as well as financially then you should now be starting to pick up steam and make improvements to many areas of your life. I know that it is that way for me. Just know that the bad times never last forever, and that the one thing constant in life is change. Like my great Mother use to say, ” weather and your underwear are things that change on a constant basis”.

Now since I am in the mortgage business this is how it relates to my field. If you have been listening to the news you may have heard reports that mortgage rates are rising. While that is true, it is also not. Let me explain. Five year fixed mortgages rates have started to move upwards over the past two weeks. However variable rates have not changed. You see the fixed rates are based on bond yields which have been rising thus changing the five year mortgage rates. The variable rates on the other hand are based on the Bank Of Canada prime lending rate, which as they have announced today is not being changed.

So even though the fixed rate payment will be set for the term of your mortgage, you will end up paying less and have a lower penalty to break with the variable. I am here for you if you have any questions but variable is looking like the best way to go. So if your current lender is calling you asking if you wanted to lock into a fixed rate, DON’T DO IT!

“Remember that our problems come in waves, but so do the solutions” Tony Robbins

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

Pat

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).

The Rate Game!

Over the last few weeks the rates on five year fixed mortgage have steadily risen as the corresponding bond yields have also increased. This all has to do with recent concerns with inflation or better yet a game of cat and mouse between bond traders and the FOMC ( Federal Reserve’s Federal Open Market Committee) which sets the US federal funds rate. You see the traders believe that the FOMC have the funds rate set too low so as a result they are pushing the yields up higher to see if the FOMC will react.

You may be asking how does this effect you and me here in Canada. Well their actions have increased the yield of our five year bonds and thus drove our fixed rate mortgages higher. Mortgages which as of late were at historic low rates. So if you have heart set on a 5 year fixed mortgage rate and are currently shopping for a new home, now is the ideal time to lock in your rate with a pre approval.

However do you know what may be a better option? Historically the better option has always been to go with a variable rate. Not only do you get a lower rate, but you also have a much better penalty if you have to break it. This would three months interest vs a very probable Interest Rate Differential penalty.

Another differentiator is the fact that the variable rate mortgage is based on the Bank Of Canada prime rate rather than the whims of the bond market in general. The bank of Canada meets 8 times a year and current the over night rate is set at .25%. The current bank forecast says that the overnight rate will remain unchanged for the rest of 2021 and also for 2022. As for 2023 and beyond it will depend on how the Canadian and global economies recover from Covid-19.

While this is no crystal ball as it is very difficult to predict the market. Generally 9 times out of 10 you will save more money with a variable rate as compared to a fixed rate. Right now, I like these odds and think that people will prefer the variable.

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

Pat

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).