Author Archives: Editor

Get a Better Rate: Five Questions to Ask Your Broker

Mortgage brokers are expected to be honest when it comes to providing their customers with financial advice. It’s their job, after all, to find you the best possible rate based on your unique financial situation. But, as with any other position of authority, there are always a few bad apples in the bunch. If you’re shopping for a mortgage rate, never assume that just because your broker has a friendly face, that he or she is looking out for your best interests.

Educate yourself in order to avoid less-than-ethical mortgage brokers. Remember, mortgage brokers are usually paid by the lender for referring customers and processing applications. This compensation varies based on the lender and the mortgage type. As such, it’s difficult for many brokers to resist the temptation of a higher commission for recommending a certain product.  The following are five important conflicts to discuss with your broker the next time you’re shopping for a new rate.  Continue reading →

Why a Bank Mortgage Might Not Make Cents

It’s no secret that the banking industry operates in a regulatory environment. Bankers and advisors are required to adhere to strict rules and restrictions… except when it comes to mortgages. According to Samantha Gale, a former mortgage regulator with B.C.’s Financial Institutions Commission and chief executive officier of the Mortgage Brokers Association of British Columbia, individual bank mortgage reps, unlike mortgage brokers and agents, operate outside of regulatory boundaries.

In fact, most banks set their own mortgage recommendations and compensation agreements themselves.

Consumer protection differs greatly between brokers and bankers. Since bank employees are the ones recommending the mortgage product, or an alternative lender, and these banks aren’t required to abide by the same broker regulations, there’s nothing stopping them from doing what they please.

Which begs the question, just whose interests are these bankers looking out for? Continue reading →

Alternative Down Payment Funding Sources

The theme for 2012 mortgage rules was pretty obvious: crack down on homebuyers who were looking to purchase a home with little money down. Changes barring cash-back mortgages by the Canada Mortgage and Housing Corp. made it clear that regulators wanted to dissuade cash-poor consumers from taking on more debt. Yet, even despite these changes, first time homebuyers can still manage to enter the real estate market with as little as 5 percent down.

Is this the best way to take your first step onto the real estate ladder? Not necessarily. However, if you’re well-qualified, (aside from the down payment), and have enough potential resources to withstand a loss of income along with the ever present threat of falling real estate prices, you might be better off borrowing to buy instead of throwing your money away on rent.  Continue reading →

No Change in Bank of Canada Rate

While the Canadian economy continues to grow at a slower pace than expected, last week’s release from the Bank of Canada wasn’t all doom and gloom. Consumer debt and the housing market finally appear to be stabilizing here in the Great White North, at the same time debt concerns in the United States and Europe have begun to dissipate.

As such, the message was clear from Bank of Canada Governor Mark Carney last Wednesday – interest rates aren’t going anywhere anytime soon. Continue reading →

Listing This Spring? Sounds Like You Could Use a CMA

Thinking about listing your property this spring? Then now’s the time to request a comparative market analysis (CMA) from your real estate agent. A CMA is an evaluation of listings and sale prices of similar houses in your neighbourhood. Similar to an appraisal in that it provides sellers with an estimate of their home’s market value, a CMA can help you be objective about the true value of your home.  Continue reading →