Natasha Shaw

By Natasha on Mar 07, 2013

February's Newsletter Article of Interest (sent out February 15th, 2013):

In the spirit of Valentine's Day, let's take a look at how to keep the romance between you and your mortgage.  

I often think of going to a "branch" to get the perfect mortgage is like going to the Bar to find true love.  They offer the promise of the access to the best rates and a convenient one-stop shop for all 'your banking needs' only so they can 'trap' you into a life long commitment that might not be right for you, your mortgage!

There are many lenders that can offer the best rates, great customer service and don't have the hefty fees that we are seeing in Canada's 5 Big Five.  These lenders don't have to cover massive overhead but they are only accessible through the broker channel (like finding a match through eHarmony) so that they can remain competitive in the marketplace.  These lenders are all about putting the romance in your mortgage experience so they can earn your business upon each renewal and your match-maker (a.k.a. Mortgage Professional) is there to oversee this every step of the way.

Interestingly, only 25% of the Canadians have been able to break their love spell with their bank to properly utilize a Mortgage Professional to help them locate the best products that will best suit their needs at the different stages of the life of their mortgage.  It is essential to this 25% that they work with their mortgage professional to compare the best mortgage available among 80+ different lenders so their immediate decision doesn't result in an expensive 'divorce' whether the need to refinance or switch arise.

Just like you might vent to a friend about your relationship, the thoughts on what your financial institution isn't doing for you or the surprises that have come along the way throughout your relationship might identify the same three common growing concerns like CBC's Marketplace: "Busting the Banks": 

1. Increased banking fees
2. Collateral Charge mortgages
3. Investment Fees

In many partnerships or relationships, it is said to be wise to plan the 'divorce' before you enter into a long term-agreement.  The purpose of this process is to open your mind to what the worst case scenario would be ahead of time so you can 'hash out' all of your concerns with respect to what your short term plans might be for the next 3-5 year term of your mortgage.

Here are a few simple questions to consider asking your Mortgage Professional to achieve a long, happy and healthy life with your mortgage.  These questions apply when you are getting the best/lowest rate on the market today, if you sign off on a Collateral Mortgage (vs. Standard) and Payout Penalties:

• What limitations exist if I go with this limited-time offered discounted rate? 
• What if I want to refinance in 3 years?  
• What is the benefit to switching lenders?
• Will I get as good a deal with this lender on renewal? 
• Are there any additional fees (like 'disloyalty' fees) for wanting to switch/refinance to another lender in addition to a payout penalty?
• What are my payout penalty options? (applies to variable vs. fixed rates)

As your match-maker, I'd love the opportunity to assist you in finding your one-true mortgage love.  Wishing the best!

It's not just about the rate, it's about the strategy!

Tags: Mortgage Financing, Romance, CBC Marketplace, Busting the Banks,