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Old 10-16-2014, 09:55 PM   #61
ranchlandsselling
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Nobody knows when rates will go up. But they will go up and possibly significantly by the end of a 5 year term. I just can't see how you'd recommend someone to get a variable mortgage when rates are at rock bottom. Seems like the kind of thing someone would look back on when they're in year 4 of their 5 year term and wonder what they were thinking.

It costs 50-75bps to lock in a rate at 2.89% for the next five years....yes please. Just seems short sighted not to do so.

But then again I'm not a mortgage professional. Do mortgage brokers get paid differently whether they sell fixed vs. variable?
People were asking the same question 5, 4, 3, and 2 years ago about the variable vs. fixed. The 5/4/3 year ago variable people have now probably won out. I went fixed but I like to take risk on my investments, not on my payments. It's really about knowing what you're getting into then deciding how you feel at each payment level and making a guess into the future. As each month passes we're closer to the "rate increasing" environment. That said, bond yields have been crushed in the past little while so if we had this conversation 2 months ago, today one could say "rates are going down". Fixed is priced off a spread over bonds, variable is priced over prime. But. . . That spread can depend on a lot of things.
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Old 10-16-2014, 10:08 PM   #62
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People were asking the same question 5, 4, 3, and 2 years ago about the variable vs. fixed. The 5/4/3 year ago variable people have now probably won out. I went fixed but I like to take risk on my investments, not on my payments. It's really about knowing what you're getting into then deciding how you feel at each payment level and making a guess into the future. As each month passes we're closer to the "rate increasing" environment. That said, bond yields have been crushed in the past little while so if we had this conversation 2 months ago, today one could say "rates are going down". Fixed is priced off a spread over bonds, variable is priced over prime. But. . . That spread can depend on a lot of things.

All good points except don't agree with what you're saying that in 2009 or 2010 that people were worried about yields increasing. That was not the case. I agree with you, I don't want to take risk with payments - especially when rates are at historic lows. It just seems irresponsible to me that people are taking out variable mortgages, and that brokers are selling variable mortgages, in this type of interest rate environment. Though I was saying that 2 years ago when I took out my mortgage and I would have "won" if I went variable....I still would not have done anything differently.

In the 80s (well before my time) rates were in the mid-high teens. People would be salivating over the current rates. Lock them in - that's the best advice, which is my opinion only of course.

Then there's the whole issue of how brokers are compensated (no offence to OP - this is a big issue in my industry as well in terms of creating conflicts of interest). If brokers are compensated more for selling variables in this environment, which of course the lenders want and that's why they provide incentives to do so, well then....it's inevitable that the brokers will be biased, no matter how well intended they are in terms of client suitability (as OP seems to be).

Anyways didn't mean to litter this thread but it's an interesting subject. Again I'm not a mortgage professional but if the professional is compensated more for selling certain types of product it certainly can create a conflict.
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Old 10-16-2014, 11:14 PM   #63
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All good points except don't agree with what you're saying that in 2009 or 2010 that people were worried about yields increasing. That was not the case. I agree with you, I don't want to take risk with payments - especially when rates are at historic lows. It just seems irresponsible to me that people are taking out variable mortgages, and that brokers are selling variable mortgages, in this type of interest rate environment. Though I was saying that 2 years ago when I took out my mortgage and I would have "won" if I went variable....I still would not have done anything differently.

In the 80s (well before my time) rates were in the mid-high teens. People would be salivating over the current rates. Lock them in - that's the best advice, which is my opinion only of course.

Then there's the whole issue of how brokers are compensated (no offence to OP - this is a big issue in my industry as well in terms of creating conflicts of interest). If brokers are compensated more for selling variables in this environment, which of course the lenders want and that's why they provide incentives to do so, well then....it's inevitable that the brokers will be biased, no matter how well intended they are in terms of client suitability (as OP seems to be).

Anyways didn't mean to litter this thread but it's an interesting subject. Again I'm not a mortgage professional but if the professional is compensated more for selling certain types of product it certainly can create a conflict.
Good point regarding 2009, I went a bit too far back. The 3.29s in 2010 were considered a gift though compared to historical rates.
Brokers arent compensated by type, more by term. 10 yr pays better than 5, and 5 than 3, etc.Any profession can put themselves in a conflict, it's the good people that are upfront and honest that you work with. I think most of the brokers I've seen on this site seem pretty good.

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Old 10-17-2014, 09:58 AM   #64
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Though I was saying that 2 years ago when I took out my mortgage and I would have "won" if I went variable....I still would not have done anything differently.

Anyways didn't mean to litter this thread but it's an interesting subject. Again I'm not a mortgage professional but if the professional is compensated more for selling certain types of product it certainly can create a conflict.
I don't consider it 'littering my thread', although your first post or two seemed like more of an attack than it did a discussion starter. I do enjoy the conversations and am happy to join in to give my opinion.

In regards to your first point, you answered your own question. I tend to point people in the variable direction because historically speaking, they do win vs. fixed rates. Again, there are definitely certain clients that I will push towards fixed rates as well depending on suitability. With good strategy I'm still confident that a variable mortgage can be beneficial even with the 'uncertainty' existing. This is why I remain heavily involved with my clients post-funding, especially those with variable rates mortgages. They all (with their consent of course *CASL*) are added to my rate mail that relays information to them once a week, along with a monthly newsletter with more in-depth info.

As for the bolded part - I could offer/push products that do compensate me much more. There are brokers that do that, but that's no different than any industry. 10 year fixed rates, as ranch said, do pay the most. I've never done a single 10 year mortgage, and generally don't even post them on my social media rate updates. I think pushing products that pay more but aren't the most suitable is EXTREMELY shortsighted, and makes zero sense to me. As a fairly new broker, I refuse to build my business that way, nor will I in the future. I'm doing the volume in my 2nd year as a broker that most don't do until year 5/6, and a lot of my business comes from referrals of existing clients.
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Old 10-18-2014, 09:05 PM   #65
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If I'm looking for a low ratio HELOC (20%) - how much better is it possible to do than the 3.5% I see everwhere? Would it be possible to do a 2.35%?
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Old 10-19-2014, 10:30 AM   #66
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If I'm looking for a low ratio HELOC (20%) - how much better is it possible to do than the 3.5% I see everwhere? Would it be possible to do a 2.35%?
PM'd

Edit: Sent OP a PM because I am no longer able to publicly post my rates. (Beaten to becoming a forum sponsor by a matter of months)

For those that may be wondering: There is no HELOC available with a rate that low. Only variable rate mortgages (not re-advanceable) have rates in that range.

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Old 10-24-2014, 10:31 AM   #67
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Here's a great link for first time home buyers, or anyone, in regards to credit reports, tax & financial planning, insurance, etc.:

http://www.fcac-acfc.gc.ca/Eng/resou...redit-5-1.aspx

Check it out! Lot's of great information in there.
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Old 10-25-2014, 02:19 PM   #68
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PM'd

Edit: Sent OP a PM because I am no longer able to publicly post my rates.
Lame - wonder if they'll be as useful as the scotia chick was
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Old 10-28-2014, 10:47 AM   #69
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FYI, I just signed my mortgage renewal with a new lender using Greg's help this weekend. I wanted to give my recommendation to anyone else coming up to that time on their property. He was knowledgeable, personable, and great to work with.

He explained a few options for us including a product that isn't mainstream advertised but fit perfectly with our "pay down debt quickly" philosophy. We would have never known it even existed without Greg's help introducing and fully informing us on it.

When the mortgage was coming up for renewal I wanted to use this once every 5 year window to shop for the best deal. My current lender threw me crumbs, so I am happy I worked with Greg to get that good deal.

Give him a shout if you are in a similar position, he did a fantastic job, thanks Greg!
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Old 11-03-2014, 04:01 PM   #70
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We just released our first video in our series of videos to come! Disclaimer: We look angry, but I promise you, we're nice people that forgot to smile!

Spoiler!


Make sure to check out our Facebook page: www.facebook.com/mysmartcap

Also, here's a short article on fixed vs. variable in today's economy: http://www.mortgagebrokernews.ca/new...ed-185048.aspx

Kind of reiterates my thoughts (as discussed in posts above).

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Old 11-17-2014, 12:29 PM   #71
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Just wanted to throw it out there that we are currently running a promotion through our Facebook page. Like and share our promotional post (from November 3rd) and you'll be entered into the draw to win a mini ipad on December 19th. Every like and share on any other subsequent post will get you an extra ballot. Oh, and only 9 people are entered so far, so chances are pretty good.

Here's the link to our page: https://www.facebook.com/mysmartcap

We keep the updates fairly light so you don't have to worry about it spamming your news feed, and when we do post, I like to think that it's useful information.
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Old 11-27-2014, 01:58 PM   #72
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Bond market still very strong, fixed rates are still holding strong with some historically low rates. We could potentially see a slight increase in early 2015, but overall 2015 still looks to be strong. There are also very low variable rate products out there right now as well.

If you're thinking of purchasing in the New Year/spring 2015, I highly recommend getting pre-approved to hedge against a potential slight increase in rates. If rates were to go down during your rate hold period on your pre-approval, we could get you the lesser of the two rates.

Feel free to PM me for rate info, or check out my Facebook page for rates and info: facebook.com/mysmartcap

Also happy to set up pro-bono appointments to go through some different options, including an unconventional mortgage product that can save you a lot of money on unnecessary interest costs. I have a calculator that can show you in great detail whether it is right for you!

Thanks,
Greg
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Old 12-02-2014, 02:55 PM   #73
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Latest video in our series is out! It's titled "Sleepwalking Through Renewal"



Facebook link: https://www.facebook.com/mysmartcap *Like & share this video to be entered into a draw to win a mini i-pad. Draw takes place on December 19th!*

So many people don't use this opportunity (your mortgage renewal) to shop your mortgage around, and just 'sign on the dotted line' because it's easy and they think their bank has their best interests in mind. I cannot tell you the amount of times a client has shown me their renewal letter with a list of rates/terms and I have told them that I know for a FACT their bank/lender can do better, as per my rate sheet I receive daily.

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Old 12-09-2014, 10:42 AM   #74
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9 Financial concepts/terms that everyone should know, explained in a very simple manner:

https://ca.finance.yahoo.com/news/9-...215000752.html
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Old 12-09-2014, 03:58 PM   #75
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While predicting rates can be extremely difficult (impossible), there's pretty much no arguing that rates aren't going to go much lower than they are right now. So with that said, if you're currently part-way through your term in a rate (fixed or variable) higher than what rates are at today, there may be some value in doing a refinance, even with paying the penalty to break your current mortgage.

I have a great calculator that incorporates what your penalty would be into the comparison between your current rate vs refinancing into today's rates. At the very least, you could almost see it as an insurance policy by locking into a great rate for 5 years.

Don't forget you can consolidate any high interest debts you may have into your mortgage. Doing so will boost your monthly cash flow and save you a lot of money in unnecessary interest costs. *Must have greater than 20% equity to refinance*

I'd be happy to do a free consultation for anyone here to see if it makes sense for you. PM/email for more info on the consultation, or for current rates. Also you can check out any of our social media streams.

Greg
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Old 12-09-2014, 10:07 PM   #76
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Just wanted to point out that if you're considering doing a refinance, now could be a very good opportunity. The bank I deal with has a typical pre-payment privilege per year, but this resets on Jan 1st, meaning you can pre-pay twice in a matter of days if you time it for the end of the year. This can significantly drop your payout penalty.
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Old 12-10-2014, 11:09 AM   #77
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Just wanted to point out that if you're considering doing a refinance, now could be a very good opportunity. The bank I deal with has a typical pre-payment privilege per year, but this resets on Jan 1st, meaning you can pre-pay twice in a matter of days if you time it for the end of the year. This can significantly drop your payout penalty.
Great point. Not to mention that if you do utilize a large, or two large pre-payment privileges, but don't want to "lose" all that money, you can always refinance up to your balance prior to doing the pre-payments.

So basically you can significantly reduce your penalty with only a temporary out-of-pocket payment.
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Old 12-10-2014, 11:27 AM   #78
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I cannot tell you the amount of times a client has shown me their renewal letter with a list of rates/terms and I have told them that I know for a FACT their bank/lender can do better, as per my rate sheet I receive daily.
Apologies if this is kind of a ****ish question, but can one negotiate the bank rate in this case?
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Old 12-10-2014, 11:50 AM   #79
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Apologies if this is kind of a ****ish question, but can one negotiate the bank rate in this case?
Absolutely you can, but do you know where it can be negotiated to? (And no, that's not a ****ish question at all).

For example, my business partner just showed me a renewal letter that his client got from his current bank (one of the big banks). They offered the Canada benchmark rate for renewal options...THE BENCHMARK RATE! So they offered 4.79% on a 5 year fixed term. I'm sure most people would realize there is better out there, but I'm also sure that some would just "sleepwalk through renewal" and sign the dotted line. If you were aware that the rate is too high and were able to negotiate it down, would you know how far they would go? Ie. you may get them down to 3.09%, but I can tell you as per my daily rate sheet that they are offering 2.99% in the broker channel.

Make sense?
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Old 12-11-2014, 03:43 PM   #80
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Well, I have officially reached my volume goal for 2014 as of TODAY! (And got a raise because of it)

Just wanted to give a HUGE shout-out to those that have used my services, as well as for the support in general. I'm looking forward to bigger things and loftier goals in 2015!

Greg
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