Mortgage Specialist - Ask me any question

[ranchlandsselling]

Originally Posted by Phanuthier

Oh interesting thought... though it is a loan, not a gift, so the deal I have with my parents is I'd pay them back on monthly installments (i.e. $500 a month over 6 years) so the dollar doesn't help me in the short term. My parents do own (mortgage paid off).... I don't know if they've ever explored that.

Are interest rates good right now relative to over the last 10 years? I know in Cali, its at a all time low.

Interest rates in Canada are near all time lows too.

If it is a loan then they could take equity out of their house at 3.29% and have you pay it down. You just send them the cash. But then they're subject to you earning in USD and their debt in CDN.

I'm sure there's many creative ways to look at this. Others should have some good ideas like Kristi.

I'm not sure if a US bank would take your parents on as a client to top up the mortgage to a higher amount then what you qualify at. ie they just come on as a guarantor and co-borrower and you pay the whole mortgage. Go to your bank or find a broker (in the US they're often called correspondants).

My opinion if I was doing this. I'd just get my parents to borrow against their house. It gives them/you the best rate (Canadian) available and a constant payment. Amortize the loan over 5-10 years, 10 year rate is 3.99% right now and have you pay them the mortgage payments.

[ranchlandsselling]

Originally Posted by genesis0403

Hi I was wondering if you can give me some info for new home buyers or recent permanent resident status home buyers.

Missed this post - but Kristi seems to have answered you well. Scotia is a good lender so I'm sure she could help you a ton. I don't yet have a lot of experience with these types of deals.

[8sPOT]

Having worked in the banking industry for a long time up until recently. I understand that banks never offer the best rates right away, however, I always did. Customers are too educated nowadays. I would pull all my rates with the branch's max discretionary discounts. This had very little impact on myself, until recently. They started saying that certain products will essentially be worth more as far as sales go, so fee based VISA's, insurance, and less discounts has a bigger impact on the banker. Needless to say I was not a fan of this, it goes against the philosophy that we are making recommendations that are best suited for that individual client.

If you go to your bank and say I googled the special rates and I'm looking for a 3 year mortgage at x %, it will come down to your long term potential. Your income, how many products you have at that bank, are you a problem customer, etc. Banks will give good rates but only to customers they feel are worth hanging on to.

[Slava]

Originally Posted by 8sPOT

Having worked in the banking industry for a long time up until recently. I understand that banks never offer the best rates right away, however, I always did. Customers are too educated nowadays. I would pull all my rates with the branch's max discretionary discounts. This had very little impact on myself, until recently. They started saying that certain products will essentially be worth more as far as sales go, so fee based VISA's, insurance, and less discounts has a bigger impact on the banker. Needless to say I was not a fan of this, it goes against the philosophy that we are making recommendations that are best suited for that individual client.

If you go to your bank and say I googled the special rates and I'm looking for a 3 year mortgage at x %, it will come down to your long term potential. Your income, how many products you have at that bank, are you a problem customer, etc. Banks will give good rates but only to customers they feel are worth hanging on to.

I know this is how the banks operate, but the tied selling is not right. Saying that you need to have RRSPs, TFSAs and insurance with the bank for a loan or mortgage is just wrong IMO. I'm biased for sure, but you can get the same rates through a broker without those requirements. I want to say that tied-selling is illegal, and I think it is, but I hear about it so often that I could be wrong.

[albertGQ]

Tied selling is illegal. I've been in the banking industry for over a decade.
You can get in very big trouble if you would only approve someones mortgage if they brought more business over

[albertGQ]

Also. I don't know why people get so pissed when banks don't offer their best rate right away. Why would they?
You don't see car salesman give you the lowest price right away. Jewelers or even the Future Shop sales guys never give you the best deal. You have to bargain for it.

I think banks get a bad rap sometimes. They're a business. They have to maximize profits for their shareholders.

[Slava]

Originally Posted by albertGQ

Tied selling is illegal. I've been in the banking industry for over a decade.
You can get in very big trouble if you would only approve someones mortgage if they brought more business over

You should hear the things clients tell me. Yesterday in fact a very good client told me his bank wouldn't give him the mortgage without buying an insurance policy. Could be that he misunderstood, and surely that would be the banks position, but its just wrong.

[Deegee]

Originally Posted by Slava

You should hear the things clients tell me. Yesterday in fact a very good client told me his bank wouldn't give him the mortgage without buying an insurance policy. Could be that he misunderstood, and surely that would be the banks position, but its just wrong.

They might have made a condition that the client is required to obtain life insurance in the amount equal to the loan prior to funding, not necessarily their own product. It is just more convenient for them to be able to sell their own product when they issue that condition on a borrower.

[Slava]

Originally Posted by Deegee

They might have made a condition that the client is required to obtain life insurance in the amount equal to the loan prior to funding, not necessarily their own product. It is just more convenient for them to be able to sell their own product when they issue that condition on a borrower.

In this particular case they said he had to take their policy and then they wouldn't approve him for the insurance, but gave him the loan anyway.

[Cecil Terwilliger]

Originally Posted by albertGQ

Tied selling is illegal. I've been in the banking industry for over a decade.
You can get in very big trouble if you would only approve someones mortgage if they brought more business over

Giving discounts for business is common but it can't be a condition. The more business the easier to offer a rate discount. Often there are specific parameters based on the level of business. But they can't be forced to bring over more business to get approved (unless required if it is cash secured by a GIC or something).

Originally Posted by Slava

You should hear the things clients tell me. Yesterday in fact a very good client told me his bank wouldn't give him the mortgage without buying an insurance policy. Could be that he misunderstood, and surely that would be the banks position, but its just wrong.

If a rep from an FI told a client that they would only get approved if they bought the credit insurance then that is the definition of tied selling and is illegal.

It is even too common where a loan officer will include the insurance in the deal and paperwork and not even mention it to the consumer that it is not required. When the client balks at the insurance then that's when you'll see the truth come out that they can waive it if they want. It's sleazy but that's what happens when sales targets determine your pay grade.

[Slava]

Originally Posted by Cecil Terwilliger

Giving discounts for business is common but it can't be a condition. The more business the easier to offer a rate discount. Often there are specific parameters based on the level of business. But they can't be forced to bring over more business to get approved (unless required if it is cash secured by a GIC or something).



If a rep from an FI told a client that they would only get approved if they bought the credit insurance then that is the definition of tied selling and is illegal.

It is even too common where a loan officer will include the insurance in the deal and paperwork and not even mention it to the consumer that it is not required. When the client balks at the insurance then that's when you'll see the truth come out that they can waive it if they want. It's sleazy but that's what happens when sales targets determine your pay grade.

I don't disagree, but its impossible to prove. Its easy for the bank rep to say " I didn't mean you had to buy it, I just meant you have to insure it because you're crazy not to" or that sort of thing. I just know it happens and I've had clients who have bought because they at least felt they had no choice, whether they did or not.

[Bagor]

Originally Posted by albertGQ

Also. I don't know why people get so pissed when banks don't offer their best rate right away. Why would they?
You don't see car salesman give you the lowest price right away. Jewelers or even the Future Shop sales guys never give you the best deal. You have to bargain for it.

I think banks get a bad rap sometimes. They're a business. They have to maximize profits for their shareholders.

It's not so much a matter of getting pissed off as exposing that it happens. As has been mentioned too many people buy the bs, go ok and sign on.

As you correctly point out through your analogies they are simply mortgage salesmen trying to sell a product at the highest price.

It's nice to just call it what it is.

[Kristi Hyson]

Good article in the Calgary Herald regarding the possibility the Bank of Canada may increase the prime lending rate ahead of schedule.

http://www.calgaryherald.com/news/Ba...676/story.html

[onetwo_threefour]

Originally Posted by Slava

You should hear the things clients tell me. Yesterday in fact a very good client told me his bank wouldn't give him the mortgage without buying an insurance policy. Could be that he misunderstood, and surely that would be the banks position, but its just wrong.

I've had clients tell me the same thing on occasion and I tell them it's simply not true. But then again, I've also had dozens of clients that think that CMHC is life insurance, so I suspect that at least some of the time the client is confused about the requirement for an insured mortgage vs. the option of purchasing life insurance on a mortgage.

However it's happened enough times that I'm sure at least a couple of times that they were told life insurance is mandatory. The commissions on those policies can be huge. I've had quite a few clients get very annoyed upon being advised that the bank cannot require to to life insure your mortgage with them.

[Kristi Hyson]

Originally Posted by onetwo_threefour

I've had clients tell me the same thing on occasion and I tell them it's simply not true. But then again, I've also had dozens of clients that think that CMHC is life insurance, so I suspect that at least some of the time the client is confused about the requirement for an insured mortgage vs. the option of purchasing life insurance on a mortgage.

However it's happened enough times that I'm sure at least a couple of times that they were told life insurance is mandatory. The commissions on those policies can be huge. I've had quite a few clients get very annoyed upon being advised that the bank cannot require to to life insure your mortgage with them.

Mortgage insurance should never be offered as a condition to obtain a mortgage. If a customer is caught in a situation where mortgage insurance is a condition of obtaining the mortgage I would recommend escalating through the financial institutions escalation process. Mortgage insurance (not default insurance through CMHC) should never be a condition when dealing with a major financial institution.

Mortgage insurance is a valuable option to anyone who has a mortgage. There are various types of coverage such as loss of life, health crisis protection and disability. Purchasing a home is one of the biggest investments people will make and ensuring you are protected not only protects the mortgage holder in the event of something unfortunate it also provides security for the family.

[Slava]

Originally Posted by Kristi Hyson

Mortgage insurance should never be offered as a condition to obtain a mortgage. If a customer is caught in a situation where mortgage insurance is a condition of obtaining the mortgage I would recommend escalating through the financial institutions escalation process. Mortgage insurance (not default insurance through CMHC) should never be a condition when dealing with a major financial institution.

Mortgage insurance is a valuable option to anyone who has a mortgage. There are various types of coverage such as loss of life, health crisis protection and disability. Purchasing a home is one of the biggest investments people will make and ensuring you are protected not only protects the mortgage holder in the event of something unfortunate it also provides security for the family.

I'll partially agree here. Having protection for yourself in terms of life insurance, critical illness and disability is important. I wouldn't (for a number of very important reasons) suggest that buying insurance from the bank/mortgage issuer is anywhere near that efficacy though. It doesn't offer the same security and bluntly the party that receives the protection in those cases is the financial institution.

People should have coverage, but they should speak with a fully licensed advisor to get it.

[bizaro86]

Originally Posted by fotze

and blunty the party?

Must be a party full of squares.

[bizaro86]

Originally Posted by Slava

People should have coverage, but they should speak with a fully licensed advisor to get it.

...find the cheapest term life insurance they can

[You Need a Thneed]

My mortgage is up for renewal. I am coming up on 5 years into a 25 year mortgage, and currently with TD. TD is offering me 5 years fixed at 3.49%.

Also, I am looking to consolidate some other debt into the mortgage/house somehow, to get a lower interest rate, making it easier to pay off. It seems to me that the best way to do this is to get a separate HELOC.

Can I get a better rate than the 3.49% anywhere? And it the HELOC idea the best idea? Is it better to get a HELOC from the same institution, or should I go elsewhere?

[albertGQ]

Originally Posted by You Need a Thneed

My mortgage is up for renewal. I am coming up on 5 years into a 25 year mortgage, and currently with TD. TD is offering me 5 years fixed at 3.49%.

Also, I am looking to consolidate some other debt into the mortgage/house somehow, to get a lower interest rate, making it easier to pay off. It seems to me that the best way to do this is to get a separate HELOC.

Can I get a better rate than the 3.49% anywhere? And it the HELOC idea the best idea? Is it better to get a HELOC from the same institution, or should I go elsewhere?

I've seen five year rates at 3.29%. Not sure if there are better rates out there or not. You just missed the boat on BMO's 2.99% promo.

How much equity do you have in your home? I've never been a big fan of HELOCs & much prefer just lumping it in the mortgage, but that's just me.