Harbour View Mortgages

The Importance of Education & Training for Brokers

Greg — Thu, 17 Nov 2011 21:13:07 +0000

Why is ongoing education and training so important for Canadian mortgage brokers in today’s market place? Check out the attached article by Greg Martel, featured in this month’s CMP Magazine!

*Double click the article to enlarge.

Benjamin Tal’s Winter Economic Buzz

Greg — Mon, 17 Oct 2011 19:08:53 +0000

CIBC’s Senior Economist, Benjamin Tal gives you his insight in his winter Economic Buzz. Please click the below document to enlarge.

Benjamin Tal’s Summer Economic Buzz

Greg — Thu, 07 Jul 2011 17:42:59 +0000

The summer edition from Benjamin Tal; CIBC’s Senior Economist is out! In this issue Benjamin talks about the rate forecast and his thoughts on locking in versus staying in a float rate.

(Click on the document below to enlarge)

How the Home Price Forecasts Changed

Greg — Thu, 12 May 2011 16:39:32 +0000

STEVE LADURANTAYE — Real Estate Reporter Globe and Mail Blog
The Canadian Real Estate Association has been adjusting its forecast for 2011 as economic circumstances warrant, and on Monday took another crack at the numbers.
Its first prediction was made in February, 2010, when it said prices would fall 1.5 per cent as sales fell 7.1 per cent.
Monday’s numbers were rosier, as stronger than expected sales across the country and high prices in B.C. caused the trade association to amend its outlook to a 1.3 per cent decline in sales and a 4 per cent gain in prices.
Here’s how it got there:
Initial forecast for 2011, February 2010
Sales: -7.1 per cent
Prices: -1.5 per cent
“Interest rate increases will contribute to weaker national sales activity in 2011.”
June, 2010 forecast for 2011
Sales: -8.5 per cent
Prices: -2.2 per cent
“While sales activity is unfolding as expected in Ontario, the decline in affordability in British Columbia impacted sales in the province during the first quarter. Additionally, changes to mortgage regulations announced in February are expected to marginally impact activity.”
July 2010 forecast for 2011
Sales: -7.3 per cent
Prices: 0.9 per cent
“Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.”
November, 2010
Sales: -9 per cent
Prices: -0.8 per cent
“Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.”
February, 2011 forecast for 2011
Sales: -1.6 per cent
Prices: 1.3 per cent “The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence.” May 9 forecast for 2011 Sales: -1.3 per cent Prices: 4 per cent
“Although sales activity in the first quarter of 2011 came in largely as expected, multimillion dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher.

Mortgage Term Review

Greg — Wed, 04 May 2011 18:26:02 +0000

Why is the “Term” Important?

As the saying goes, “The lowest rate will save you hundreds, but the wrong term can cost you thousands.”

Put another way, your mortgage term can have a far greater impact on interest cost than the up-front interest rate. That’s because your term determines the length of time you’re locked into a rate. That, in turn, affects how long you’ll overpay or underpay, relative to the other available options.

The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early. It therefore pays to make the right choice from the get-go.

Almost anyone can find a low rate by browsing the Internet. Picking the right term isn’t so easy. Take some time, get good advice, and nail the right term the first time. Below you’ll find bite-sized term reviews to give you a running start.

Popular Fixed Terms…

Here’s a breakdown of the most common mortgage terms:

1-year Fixed: If rates rise as economists expect (see: mortgage rate forecast), then a deeply discounted 1-year fixed is mathematically a good alternative to a variable. At the end of the term, you can move into another 1-year or consider a variable rate—possibly at a better discount than today.
2-year Fixed: Rates on two-year terms are now low enough to make them slightly more attractive than variable and 1-year fixed rates. That’s assuming prime rate increases 1.75% in the next two years. If your rate expectations are lower than that, then a 1-year fixed performs better “on paper.”
3-year Fixed: This is unquestionably the sweet spot thanks to 3-year rates under 3%. The three-year beats all other terms in our internal rate simulations. If we were forced to pick one strategy for the next five years, a three-year fixed followed by two one-year terms would be it. As always, the trade-off with a 3-year term is more risk in years 4 and 5.
4-year Fixed: At today’s rates, 4-year mortgages are still a waste of time unless you plan to break your mortgage in four years. (Remember, however, that people do refinance every 3.5 years on average.)
5-year Fixed: This is the most popular term in Canada, and government restrictions on variable-rate qualification have made it more so. Fortunately, 5-year fixed rates have never been lower—literally. At under 3.50%, the conservative 5-year term has become attractive even to long-time variable-rate devotees.

Tips for Paying Your Mortgage Off Faster

Greg — Thu, 28 Apr 2011 17:58:35 +0000

Mortgages in Canada are generally amortized between 25 and 35 year terms. While this seems a long time, it does not have to take anyone that long to pay off their mortgage if they choose to do so in a shorter period of time.

With a little bit of thinking ahead, and a small bit of sacrifice, most people can manage to pay off their mortgage in a much shorter period of time by taking positive steps such as:

Making mortgage payments each week, or even every other week. Both options lower your interest paid over the term of your mortgage and can result in the equivalent of an extra month’s mortgage payment each year. Paying your mortgage in this way can take your mortgage from 25 years down to 21.
When your income increases, increase the amount of your mortgage payments. Let’s say you get a 5% raise each year at work. If you put that extra 5% of your income into your mortgage, your mortgage balance will drop much faster without feeling like you are changing your spending habits.
Mortgage lenders will also allow you to make extra payments on your mortgage balance each year. Just about everyone finds themselves with money they were not expecting at some point or another. Maybe you inherited some money from a distant relative or you received a nice holiday bonus at work. Apply this money to your mortgage lender as a lump-sum payment towards your mortgage and watch the results.

By applying these strategies consistently over time, you will save money, pay less interest and pay off your mortgage years earlier!

Genworth Financial’s Homebuyer Privileges Program

Greg — Tue, 26 Apr 2011 18:29:22 +0000

RBC Specialist Fires Low Blows & Goes Viral

Greg — Tue, 19 Apr 2011 18:05:46 +0000

Thanks to Canadian Mortgage Trends, this article provides further clarification regarding the flyer that was sent out from an RBC mortgage specialist last week…

www.canadianmortgagetrends.com

Banks have extensive policies governing what their representatives can tell the public. The alleged actions of RBC mortgage rep, Corinne Schindler, demonstrate why.

Schindler has reportedly been circulating this flyer, which grossly mischaracterizes mortgage brokers in relation to bank specialists. It’s a document that demonstrates a stunning lack of knowledge, professionalism and discretion.

The piece, which displays RBC’s logo and web address, has gone viral and caused a PR embarrassment at the nation’s biggest bank. Incensed brokers from across the country have demanded (2nd link) that RBC retract the misstatements on the specialist’s behalf.

Here’s a sample of the distortions attributed to Ms. Schindler (our perspective follows each line):

1. Brokers charge “set-up fees” and “other hidden costs”

· Truth: Broker fees are exceedingly rare on prime residential mortgages. When fees or borrowing costs are warranted, provincial regulations require fulldisclosure.

2. “Ask a broker what their compensation will be for completing your mortgage.”

· Truth: Broker compensation is geared primarily to theterm and secondarily to the rate. As with any incentive-based model, conflicts can exist, but no more so than with various bank rep models that pay more commission for selling a higher rate.

3. Brokers pick lenders “based on only the lowest rate, no other factors”

· Truth: Rates are commodities so successful brokers always prefer to leverage trusted advice and relationships. To build each, brokers become experts in their craft, which includes term selection, product comparison (frommultiple lenders…key point) and strategic mortgage planning.

4. Brokers…”cannot fit your mortgage solution together with your overall financial plan.”

· Truth: Needs assessments are a fundamental tool that brokers utilize. Brokers are trained to uncover future needs that financing might have to address.

5. “Brokers will not be there in a few months when you need to ask questions about your mortgage or change the terms of conditions”

· Truth: Referrals are a broker’s lifeblood and maintaining relationships is impossible without exceptional post-closing support.

6. “You have to be careful to deal with an institution that will give you a great rate term after term.”

· Truth: Banks’ renewal models are designed to maximize profit. That’s done through selective pricing (i.e. not offering the best rate to everyone up front). It’s a fallacy that banks reward loyalty with great rates. (Here’s some relevant research).

********

After poking around at RBC, this piece appears to be Schindler’s own doing. This advertorial is definitely not in RBC’s marketing library we’re told. Moreover, RBC’s corporate materials are far more polished (i.e., generally no grammar or formatting issues, missing slogans, mistruths, etc.).

From what we hear, Schindler violated RBC compliance guidelines and sent it out without RBC’s or her manager’s consent.

In response to all this, RBC provided us with a comment:

“The opinions expressed in the document by the mortgage specialist do not reflect the positions, strategies or opinions of RBC. We are following up directly with this mortgage specialist to ensure future collateral accurately reflects the RBC brand.”

We have a better idea. How about no “future collateral” from this individual period?

Fiduciaries that mislead the public for personal gain are hazards and liabilities to their employers. Anyone who would author this sort of content should be sent packing because Lord only knows what she’s telling clients in private.

Incidentally: We’ve been holding this story since last Wednesday, awaiting comment from RBC and trying to get Schindler’s side of the story to give her the benefit of the doubt. On the two occasions we did reach her, she hurried off the line, promising to call back. Needless to say, after multiple contact attempts, we never heard back.

Benjamin Tal’s Economic Buzz

Greg — Mon, 11 Apr 2011 18:49:02 +0000

Deputy Chief Economist for CIBC World Markets; Benjamin Tal, gives us his insight in his “Spring 2011 Economic Buzz”.

Harbour View’s Great Payment Giveaway!

Greg — Thu, 10 Mar 2011 19:37:40 +0000

Greg ready to announce our first winner…

We are excited and pleased to announce that our first Great Payment Giveaway was a huge success! Our first draw was held on Tuesday, March 1st at the Oyster Bar. Complimentary food and beverages were enjoyed and our first winner was drawn! Please take a moment to read all about it in the press release below!

DLC Harbour View Mortgages Great Payment Giveaway Pays Sylvie Trueman’s Mortgage for a Year!