The First Step

 

The first step

Is the first step a pre approval?  No.

Is the first step a rate quote?  No.

Is the first step giving advice?  No.

The first step is customer service.  The first step is treating you like a person, not a number, a paycheck or “just another customer.”  The first step is to treat you like a fellow human being.  We start by being polite, courteous and respectful of your time and your financial situation.

Smiles are usually free.  Unless someone is a miserable human being, then the smiles will be forced.  We will offer refreshments.  Sometimes there are brownies, but they usually don’t last very long.  We will often greet you with a handshake, but after an appointment, the ladies usually like to hug it out.

My job is to make people feel comfortable about the entire mortgage process.  From introduction to completion, I will answer any questions that you people have.  I will even return phone calls.  Even when my clients call me after hours, often times I will be able to answer their calls.  As a professional, the growth of my business relies on the referrals from the people that I help.  I will do everything in my power to create a positive and efficient experience for my clients and their loved ones.  Also, I will venture to save them time and money.  And if there are laughs had along the way, that’s good too.

Not only am I looking to develop a great relationship with my clients now; I am looking to become their mortgage professional for life. 

At Mortgage Wise, we are passionate about what we do.  We are full time, professional mortgage agents and brokers that are licensed and experienced to deliver the best service and advice for all of their your mortgage needs, and the generations to come.

Thank you once again for visiting an AWESOME approach to MORTGAGES.

Remember, there is no “I” in Mortgages!

If you have any questions, you can find me at Andrew.young@bemortgagewise.ca or phone me at 519-630-5905.  If you enjoy twitter, I’m @ayoungmortgages.

Pre Qualified or Pre Approved?

 

Pre Qualified or Pre Approved?

There is a difference.

Once you go down the road of home ownership, it is important to know the lingo.  You have probably heard that it is a good idea to get pre approved or pre qualified.  There is a fundamental difference between the two.

Pre Qualified – A mortgage professional (or a banker, tehe) will take down some information about your income versus your debt, do a calculation and give you a purchase price that they think you should stay under.  Presuming that they have some skill, experience and know-how, this could be helpful.

Pre Approved – A real mortgage professional will take your personal information such as your name, date of birth, address and social insurance number.  They will also collect some information about your income and the debts that you currently have.  At that point they will complete an application and send it off to a lender to get a formal pre approval. 

As you can see, the main difference is in the credit bureau and the adjudication process.  With a pre approval, you will have your deal pre-screened by an underwriter to reduce the chance of any possible hiccups going forward.  Please note that if you are putting down less than 20% then your application will still have to be approved by a default insurance company such as CMHC, Genworth or Canada Guaranty. 

In addition to the adjudication process, the pre approval can save a fixed rate for you for up to 120 days (for most lenders).  This can help hedge against rising interest rates.  As a note, you will be pre approved based on a 5yr fixed rate.  That rate is held for up to 120 days.  If the fixed rates go up, you still get to pay the lower rate.  If the rates go down, you get an opportunity to take advantage of the lower rates.  It is a win-win.

So if you are looking for your first house or thinking of moving, get pre approved.  You might just save yourself a lot of money.

Thanks again for visiting an AWESOME approach to MORTGAGES.  If you know of anyone who might find this interesting, please feel free to forward it on.  Knowledge is power. 

You can find me at Andrew.young@bemortgagewise.ca, @ayoungmortgages or by phone at 519-630-5905.

Fixed or variable?

 

Fixed or variable?

This is one of the most frequent questions I answer on a daily basis.  To be honest, it all depends on the client. Similar to investing, it depends on your risk threshold.  If you are the type of person who wants to know exactly what your payments are going to be for a fixed amount of time, obviously, you should go fixed.  If you are comfortable with knowing that your payments may go up or down throughout the term of your mortgage, go variable.  In the last 8 years that I have been in the mortgage industry, variable has been the way to go.  Except for a couple of months in 2012, the variable rate offerings have been lower than the fixed rates. 

Allow me to give you an up to date example of what rates are doing today:

Most lenders are offering 5 year fixed rates at 3.60%. (I can get you a better rate than average, of course).  The average variable rate mortgage rate is at prime (3.00%) minus 0.40% - 2.60%.  That is a difference of 1%. 

For this example we will use a mortgage of $200,000 with monthly payments and an amortization of 25 years.

5 year fixed rate payment is $ 1,009 / mth.

5 year variable rate payment is $ 905 / mth.

That is a difference of $ 104 / mth.  That may not seem like a lot, but if you compound the savings over 5 years (assuming the prime rate doesn’t go up) that is a potential savings of $ 6,240 in payments alone.  What about the interest savings?  In this example, you would save over $ 9,451 over the 5 year term by selecting the variable rate.

The average change in Prime Rate has been an increase or decrease of 0.25%.  On a $200,000 mortgage, if the interest rate increases 0.25%, the monthly payment on the variable rate will increase by $ 26. 

The best option is whatever allows you to sleep at night.  If you can manage and tolerate an increase in your mortgage payments in an attempt to save some money, variable is the right option for you.  If you need to know what your payments are going to be, then don’t sweat it, fixed is optimal for you.  If you like the security and want to pay down your mortgage a little bit faster and reduce your borrowing costs, then make extra payments on your mortgage.  Every little bit helps. 

Thanks for visiting an AWESOME approach to MORTGAGES.  If you have any further questions or if you need some awesome advice, never hesitate to contact me.  You can reach me at Andrew.young@bemortgagewise.ca or at 519.630.5905.

Where are you getting your mortgage advice?

 

Where are you getting your mortgage advice?

When it comes to making decisions about lender, term, amortization, rate and what kind of mortgage is best for your situation; who is advising you?  Where are you getting your advice?  Who are you getting your advice from?

There are so many sources of information that are readily available at the push of a button.  When it comes to making important decisions about your financial future, you deserve the best advice.  You can find advice from websites, friends, family and other organizations. 

Specifically, when it comes to your mortgage, who can you trust?  Who is looking out for your best interest?

Many institutions make a significant profit from lending money to people.  Whether it is credit card, automobile, student loans, lines of credit, RSP loans or mortgages, many institutions want you to be in debt.  That is the very nature of their business.  As a mortgage agent, my view is very different.  Our goal is to ensure you have a great experience so that you tell everyone you know about us.  That is how we grow our business.   My goal is to deliver the best advice and product to you, not to keep in you in debt to reach targets or maximize the profit for the organization I work for. 

Some things to consider when choosing who you are going to accept advice from about one of the largest investments you will make in your life:

What are their qualifications? 

Are they licensed to give you mortgage advice?

How much experience do they have?

Have they ever had a mortgage or purchased a home?

Do they have access to many types of mortgages and mortgage solutions?

Over the last 8 years I have worked in the mortgage industry.  I started my career as a Mortgage Specialist with a large Canadian bank. After 2 and-a-half years I moved to another bank thinking that they would have better solutions for my friends, family, neighbours and clients.  After finding much success, I was introduced to an influential Mortgage Broker in London.  After many conversations I realized that becoming a Mortgage Agent gave me the ability to deliver the best options for the clients that I had already had helped and any client that I would help in the future.  After 8 years and after closing several hundred mortgages, I can confidently say that I can deliver you the best advice, products and service available in the industry. 

Experience is key when giving advice.  On top of helping hundreds of people across the country with the purchase of their homes, renewals, cottages, investment properties, stores, restructuring their debt, borrowing to invest, saving them from bankruptcy, I have also purchased homes.  I have bought and sold houses, so I know the processes and what to expect.

At Mortgage Wise, we have access to many lenders that provide multiple solutions that can be used to create a customized solution for any of your mortgage lending needs.

Thanks again for visiting an AWESOME approach to MORTGAGES.

Here’s how to find me:

@ayoungmortgages

519-630-5905

Andrew.young@bemortgagewise.ca

Purchasing in the country?

 

Thinking about a move to the country?  Looking for more land?

There are definitely more things to consider when purchasing a property in any rural area; particularly when it comes to financing an agriculturally zoned property.  On top of the regular items on your checklist, you will need to consider the following:

Zoning – Which “A” zoning

Similar to residential zoning, different properties are zoned according to their activity.  Different zonings may require a different amount of down payment and structuring.

Hobby farm or livestock - Racetrack or sporting

The majority of Schedule 1 banks and most monoline lenders do not like properties labeled as a hobby farm, especially if the property houses livestock or a racetrack.  There are a few specialized lending companies that deal strictly with agricultural purchases to help you with these types of properties.

Sewer system or septic

With most purchases of properties with septic systems; the lenders will be looking for septic certificates / inspections.  They will also look for well certificates as well.

Acreage / size of land

The size of the property is of utmost importance.  In recent years, most lenders have restructured their lending policies on properties over 10 acres. If you have less than 20% down payment on a property, you will need the property to be insured by CMHC or Genworth.  The insurance companies will only give value to the house, plus 10 acres.  This is paramount when planning a purchase.  The more acreage, the more down payment may be needed.

Out buildings

Most people would think that out buildings including shops, sheds and pool houses would add to the value of the property.  They actually do the opposite.  When valuating properties, appraisers will value the house, the acreage and determine the value of the outbuildings.  Once they determine the value of the out buildings, they usually reduce the overall value of the property.  The reason for this is resale value.  Not everyone is looking for a property with a huge shop or multiple buildings or racetrack. 

The purpose of this blog is not to dissuade you from purchasing outside of the city, but there are different lending rules and guidelines that you need to be cognizant of. 

The bottom line; consult a professional before you make a purchase.  We can help guide you through the guidelines of any residential, agricultural or commercial purchase.

Be Wise, call the Mortgage Guys!

Please feel free to contact me at 519-630-5905 or at Andrew.young@bemortgagewise.ca.

Thank you for visiting an AWESOME approach to MORTGAGES.

How I can help...

 

How I can help…

People often ask me about the different ways I can help their friends and families.  As a mortgage professional, I get a number of calls from past clients, realtors, friends and families about how I can help their friends / clients / family members, etc. 

People often ask me “Do you do mortgages for;” followed by an example of the potential clients situation, credit experience and employment.  Based on the information I receive, I match them up with the best products and companies to match their needs and situation for the present and the future.

In order to best help anyone you know, I have created a list of the different ways I can help the people you may know.  Here is a list of the different types of mortgage products and solutions I offer:

Purchases across Canada           

Rental and Investment properties

Renewals

Refinances

New Builds

Cottages and vacation properties

New to Canada program

Self - Employed

Homeowner lines of credit

Private mortgages

“B” Deals

Zero-down mortgages

Commercial properties

A lot of these deals can be combined to create a customized financing solution for almost anyone.

For any questions about the different types of products and solutions we offer, please contact me at Andrew.young@bemortgagewise.ca or at 519.630.5905.

Thanks for visiting an AWESOME approach to mortgages.

 

Price or product?  That is the question.

Over the last number of years the focus on mortgages has been rate.  Who is offering the most competitive rate?  A lot of people have overlooked the products themselves in search of the best rate.  There is a lot more to packaging a mortgage than simply rate.

Some things to consider when discussing the best mortgage product for your particular situation are:

1. How long will you be staying in the property?

If you intend on moving in certain length of time, matching the term may be the best option for you.

2.  Do you intend on making extra payments on the mortgage? If so, how many extra    payments will you be making and how much extra will you be paying off per year?

If you are in a position to make extra payments on your mortgage, the prepayment options on your mortgage should be paramount to you.  Prepayment privileges change from lender to lender.  In addition to prepayment, the type of mortgage you choose will affect your ability to repay your mortgage faster.

3.  Are you comfortable with a fluctuating payment to potentially maximize interest rate savings?

A variable rate mortgage is sometimes beneficial in certain rate environments.  There is a risk that your payments could increase, but you may be able to save money compared to other fixed rate products.

4.  Are you looking to purchase additional properties in the future?  Will you require access to the equity in your home to do so?

If you are looking to purchase additional properties and you will need to access the equity in your home, a long-term fixed rate may present an obstacle.   The term and rate that you choose will affect the penalty to break or add to the mortgage.

These are only a few items to consider when structuring your mortgage.  There are many different terms and rates to choose from.  Matching the best product at the best rate is a job left to an experienced mortgage agent.

how to choose the RIGHT mortgage broker.

how to choose the RIGHT mortgage broker.

We already know the answer to this question.  It’s me.  Why? What’s the difference?

The majority of homebuyers start off by speaking with their banks when shopping for a mortgage.  Not a bad place to start.   They are the people that handle your day - to - day transactions, Visa’s, lines of credit, TFSA’s, safety deposit boxes, etc.   There in lies the problem.  Most of the bankers out there are “Jacks of all trades,” and masters of none.   As a matter of fact, they do not require a license to give advice to people on what is generally the largest purchase of their lives.  Coming from the Banking world, I experienced this first hand.  As a broker, we do need to be licensed.  We also need to renew our professional licenses and memberships annually.

EXPERTISE

You don’t go to a mechanic for a nice steak, and you don’t ask your butcher to change your alternator.  So why would you trust your mortgage to an institution that has limited options?  Choice is power.

EXPERIENCE

As a broker, we offer you options.  Our responsibility is to look at your entire financial situation and match you with the best lender.  We don’t try to put a square peg in a round hole.  Before I became a mortgage specialist with the banks, I was an insurance and investment broker.  I have the knowledge and experience to deliver the best advice for now and the future.

OPTIONS

We have access to more than 20 lenders including many of the Canadian Chartered Banks.  We have access to Credit Unions and companies called Mortgage Backed Security companies.  MBS’ specialize in mortgages and some offer Homeowner Lines of Credit. 

SAVINGS

How do we get great rates?  Easy.  The lenders do not pay for our location or expenses. They don’t pay us a salary.  Unlike the bank, we do not create overhead costs for the banks and lending institutions.  They reward us with great rates.  We often get rate specials that banks do not have access to.

PERSONALITY

Why not have a great time while getting a great mortgage?  Somehow I get invited to a lot of my client’s weddings…. Weird. Awesome.

CONVENIENCE

We have a convenient location or I can come to you.  We work around your schedule. You are not limited to the operating hours of the bank.

ACCESIBILITY

Cell – 519.630.5905

Office – 519.433.5013

Fax – 519.433.0402

Email – Andrew.young@bemortgagewise.ca

Twitter - @Ayoungmortgages

Website – www.mortgagewisefinancial.com

In person – 259 Wellington Rd. London, Ontario N6C 4N7

Facebook – You can find me

COMMUNITY FOCUS

For every deal funded, I make a donation to the non-profit organization of your choice.  This directly affects your community and perhaps the people you care about the most.

When I am not working on getting people the best mortgages possible, I serve on the program board and centre board for Merrymount Children’s centre.  I have recently volunteered my time to the planning committee for the Comedy Night in support of Merrymount Children’s Centre coming up on November 7^th, 2013.

So if you appreciate EXPERTISE.

Looking for someone with extensive EXPERIENCE.

Wishing to explore your OPTIONS.

Enjoy SAVING your money.

Understand the value of CONVENIENCE.

Admire ACCESIBILITY.

Appreciate someone that gives back to the COMMUNITY.

You don’t need to look any further. 

Thank you for your continued support through your referrals.

Thanks for visiting an AWESOME approach to MORTGAGES.

For the younger buyer.....How to get prepared for your first home!

 

"Hey Andrew Young, I’m younger and I want to be prepared to buy a house in a couple of years, what do I need to do?"

There are usually four major components to getting you approved for a mortgage:

1. Employment - We need to prove that you have a source of regular income.  In general, after you start your new job, you will need to be employed by the same company for a minimum of 3 months or until you pass probation. 

2. Down payment - We need to see how much down payment you have and prove the source of the funds.  The minimum down payment amount is 5% of the purchase price of the home.  For down payment proof, we will need 90 days record of your bank account, RSP’s or TFSA.  Also, you can obtain your down payment as a non-repayable gift from a direct family member. 

3. Credit - We need to prove your identity and show that you repay your debts in a timely fashion.  We do this by collecting your name, address and Social Insurance Number.  We access your credit bureau via Equifax or Transunion.  These companies track your payments, balances and repayment history.

4. Affordability – We perform a calculation to discover your Total Debt Service Ratio (TDSR).  It’s a calculation that takes your monthly ‘must pay’ items (credit card, line of credit, car loan or student loan) and we divide that by your gross monthly income (income before taxes).  From that we have a ratio that indicates how much of a mortgage payment you can afford.

Here are some tips for you…

Manage your credit

Do yourself a favor - if you borrow it - pay it back!  Credit cards debt is not free money.  Pay more than the minimum balance on your credit card debt every month or it will cost you a fortune and take you many years to pay it back. 

Keep the correspondence from your student loan provider(s).  There are often mistakes on credit bureaus that can be cleared up with the proper paperwork. 

Don’t take on more than 2 credit cards.  It is redundant to have more than 2.  Beware of the ‘in-store’ credit cards.  If you don’t pay the balance off monthly, you could be charged 18-28% interest on the balance.  The less debt you have, the higher the mortgage amount you could be approved for.

Save your money

Set up an account (High interest savings or TFSA) and make regular contributions.  It may be easier to setup a regular deposit amount through your bank.  It is best to use the power of interest to help you save for a house.  You can use the Home Buyers Plan (HBP) where you can contribute into an RSP and use that money as down payment.  You do have to pay that money back into your RSP over a 15 year period.  You get a 2 year grace period where you don’t have to make payments.

In closing;

1. Pay your debt on time and often
2. Keep records of the debts you incur
3. Don’t take on more credit than you truly need
4. Set up a savings account and make regular deposits

If you follow these simple steps, you will be in great financial shape to buy a house.

Thanks for visiting an AWESOME approach to MORTGAGES. 

If you have any further questions, please feel free to contact me at:

Andrew.young@bemortgagewise.ca or directly at 519-630-5905.