This incredible mortgage rate!

If you are shopping around for mortgage rates on the internet and notice some huge discrepancies on available “best rates”……beware.

A recent inquiry came from an individual who came across a mortgage brokerage advertising a 1 year fixed rate at 2.29%.   I searched through my rate sheet, as well as other rate sheets I use to compare mortgage rates only to find that there really was no lender offering this rate nor was there any particular mortgage rate special being offered in the mortgage brokerage community.

Why would a mortgage brokerage advertise a rate that is really not available?  The reason is plain and simple.  Companies will sometimes do what it takes to make the phone ring and once they have you really interested in that offer, they might just get your business.  Most mortgage brokerages who are guilty of this practice know exactly what they are doing.  Follow me on an example of how this would be played out……  Once the mortgage brokerage receives a mortgage inquiry that leads to a mortgage application and a corresponding credit check, and receive all the relevant paperwork from the applicant, job letters, pay stubs, a notice of assessment, etc, the applicant is usually then encouraged to “avoid shopping around for a mortgage, as shopping around could negatively affect their credit score”.  At this point, the applicant has fulfilled all of the lender’s requirements to get this “super great advertised mortgage rate” quoted on the website.   But the bad news now comes out…….”oh so sorry, that mortgage rate, you saw, is no longer available as the lender has just changed their rate”.  How can the applicant prove otherwise?  After all, they do not have access to lender rate sheets, that the brokerage has, and there is always that small footnote, at the bottom of the website that you did not see……”mortgage rates are subject to change without notice”.    An applicant who has already invested much time and effort, may just go ahead with the application resenting the thought of going through all of this painful application process again (and this is exactly what steps the brokerage planned to take you through when they advertised that mortgage rate, that really does not exist).

The practice of advertising a product (or a mortgage rate) that really is not available to the consumer is considered a “Bait and Switch” tactic.  The practice of using Bait and Switch is forbidden by the “Canadian Code of Advertising Standards”.  The advertising standards document can be viewed at this link:

http://www.adstandards.com/en/standards/canCodeOfAdStandards.pdf

What can you do to really ensure you are not being deceived by some “amazing rate” that you find that seems too good to be true?  Research it and check it out against some other reliable sources like:

1.   https://www.cannex.com/canada/english/

2.  http://www.financialpost.com/personal-finance/rates/mortgage-closed.html

If you see no other brokerage that is even close to this advertised rate, that is probably a good indication that the rate you see on the website is set up to lure you in.

What can you do, if you think you have found misleading advertising?    You should take the time to file a complaint.   You can find the information and complaint process under the Competition Bureau website:

http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02776.html

This article written by Elizabeth Blair on August 25, 2010.  Elizabeth is a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit any of her websites at:

http://www.missmortgage.ca

http://www.burlington-mortgage.ca

http://www.oakville-mortgage.com

http://www.streetsville-mortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office is located at:  15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

What is a “closed” or “open” mortgage?

When you are shopping for a mortgage, you may hear the terms, CLOSED or OPEN mortgage.    Let me explain the difference between these two options so you can determine which one is better for you.

OPEN MORTGAGE An “open” mortgage means that the mortgagor (the borrower) can pay the mortgage off, fully, at any time, without a mortgage penalty.   A fully open mortgage is suitable for the following types of borrowers:

a) a property investor buys a property and has intention of selling it in a very short timeframe;

b) a borrower sets up this mortgage because they are expecting a large sum of money (for example, an inheritance or a work bonus) and will use that money to pay off the full mortgage loan amount;

c) a borrower who might be required to move on notice (perhaps due to a work relocation requirement) and would need to pay the mortgage off in full when the house sells.

d) you receive regular large bonus amounts, as an employee of your company, and you wish to apply these amounts to your mortgage anytime without the restrictions that might come on a lender’s regular pre-payment terms.

e)  or perhaps you do not want to be locked into any term, for your mortgage loan.

Note that, the mortgage rates, for fully OPEN mortgages are higher than those given for  “closed” mortgages.   For example, effective today November 24, 2009, a fully open variable mortgage rate, is available at Prime Rate Plus 0.80% = 3.05%

CLOSED MORTGAGE A closed mortgage means that the mortgagor (the borrower) is given a contract “term”.     If the borrower breaks the mortgage, before that contract term is up (known as the renewal date), the borrower must pay the mortgagee (lender) a full three months of interest penalty to get out of the contract (or IRD penalty).    Variable mortgage contract terms are available for 3 year terms and 5 year terms, right now.   A closed variable, 5 year term, mortgage rate is priced right now at between Prime Rate Minus 0.10% = 2.15% up to Prime Rate Plus 0.10% = 2.25%.   A closed variable, 3 year term, mortgage rate is priced at Prime Rate Minus 0.25% = 2.00%.

So you can see that there are specific reasons why a borrower would choose a closed mortgage over an open mortgage.

This post was written by Elizabeth Blair on November 24, 2009, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients all over the Greater Toronto Area.

You can contact Elizabeth by phone:  (905) 510-5785

Or email:    eblair@mortgageedge.ca

Visit her website at:     http://www.missmortgage.ca

Elizabeth Blair is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office is located at:     15 Wertheim Court, Suite 210, Richmond Hill, Ontario, L4B 3H7

NEW Lower Mortgage Rates!

Here are hot new mortgage rates for you:

1.     Variable Rate Mortgage at Prime Rate – 2.25% **

2.     5 Year Fixed Rate – 3.75% **

If your mortgage loan amount is greater than $370,000, I can get you

3.59% ** on a 5 Year Fixed Rate.

**  Some conditions apply and subject to approval by the Lender.  Mortgage rates are subject to change without notice.

This post was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca Lic # M08005880 Brokerage Lic # 10680 Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

HOT News: Lenders slashing variable discounts

Hot news for those who are looking for variable rate mortgages.   Here is the best deal available today:

Prime Rate plus 0.15%.  —> 2.40%

Wow, this is an excellent rate and is only available for mortgage terms of less than 3 years.

You pick a renewal date between March 19, 2012 and May 31, 2012.

This blog post was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.   Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca Lic # M08005880 Brokerage Lic # 10680 Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

What is a bridge loan?

Sometimes when you buy a home, the closing date for the home you are selling does not match the closing date of the house you are buying.   Some of the typical reasons for a difference in closing dates might be:   you want to get some renovations completed on the home being purchased before moving into it or perhaps you could not get the seller to give you the closing date that you really wanted.  So if the closing date of the home you are buying is before the closing date of the home you have sold, you will need a bridge loan.

Let’s use a real example so you can understand how a bridge loan amount is derived:

Price of the home being purchased:     $450,000

Less:     Amount being mortgaged:    $360,000

Less:     Deposit you give to the Realtor:   $10,000

Equals:     $80,000   Bridge Loan amount

The bridge loan amount is really your total down payment, less your deposit because the lender is advancing the rest of the mortgage money on the closing date for the home you are purchasing.

Using the above example, and some real dates, here is how the interest cost is calculated, for this particular bridge loan amount:

Client is buying a new house – closing date = April 30, 2009

Current home is not closing until = June 25, 2009

Clients need a Bridge Loan to cover them for 56 days until current house sells.  Bridge Loan amount required is $80,000.   Lender’s interest rate = *prime rate (2.25%) plus 4%.

Bridge loan  $80,000   X   0.0625 (interest) =  $5,000

$5,000  divided by   365 days =   $13.6986 (per diem cost)

$13.6986   X   56 days =  $767.12

For a Bridge Loan advance that is greater than a certain amount, and is greater than 45 days, the lender will sometimes ask that the bridge loan be secured by way of a collateral mortgage on the property being sold.   If a collateral mortgage is required, lawyers will often charge extra to do this (estimated at $500 and up).  Some lenders will also charge a bridge loan “set-up fee”, and some lenders do not.   Remember also that a property sale must be firm before a lender will arrange a bridge loan for the borrower(s).  And finally, lenders will not advance more than 90% of the value of the property being sold.

This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.   Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca Lic # M08005880 Brokerage Lic # 10680 Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

The lost art of referring business

Many good things, unless they are continually practiced and exercised, can truly be “lost”.   I believe that there is an art in the practice of referring business and that too will go by the wayside unless business owners learn to do this well.

Each year, as I work in this business, I continue to build up a database that now holds over 750 people, prospects, clients, lawyers, appraisers, lenders, realtors.  As I continue to see increasing growth in sales, I also see a rising trend in referrals that I receive from others.   This steady stream of referral business has become the main reason why I have enjoyed the growth in sales today.

Over the years, I have also been focused on gathering an established network of individuals who I “believe in”.  Each time I come across someone who might need that kind of service provider, I work very hard to ensure that the individual knows and understands that the person I am referring is excellent at what they do.  In a way, it is a mini sales job, on its own, and most times, the individual I refer ends up getting the business.  Here is an example of some of the things I have done in the past, on behalf of that individual I am referring:  tell them about a recent great job they did for me or a client of mine, let them know that I know them well and I believe wholeheartedly in their service level and I may even send them the business card of the person I am referring.   I can honestly say that I receive great satisfaction in referring others and I believe that if I expect others to refer business to me, then I must be working hard at securing business for them.

I believe that referring others must become something we do everyday IF we expect to reap the reward of constant referred business coming back our way.   It is the basic rule of giving if you expect to receive.   What a straightforward idea but yet so difficult for many to grasp…. truly a lost art.     While there are structured programs and groups out there, like networking groups, that motivate members to refer business, these groups do come with hefty membership fees and often because of the fees, members feel obligated to push leads into the group just to get their fair share of leads back….it is a pay to receive structure.   I believe true networking for referral business should not be something you “pay for”, it should be something you do naturally along with the group of business partners that you have come to know and trust….…sending business leads out and expecting business leads back.

This year has been an absolutely amazing year for me and as I continue to receive leads and pass out a high number of excellent real estate leads to realtors, I will continue to carefully monitor who is sending leads and will ensure those are the ones I refer business back to.

This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca Lic # M08005880 Brokerage Lic # 10680 Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

mortgage plus line of credit – is it for you?

Home owners who have lots of equity in their house, might be looking for ways to get access to that equity without having to re-finance their house, everytime a need arises.

A mortgage with a line of credit portion is a great product for some.   Here are some typical reasons why you might want to get access to your home equity:   buy investments, stocks, or RRSPs, renovate your home, education costs and more.

The diagram below breaks the mortgage into three parts

	20% cannot be financed
	$ 94,000 MAX Line of Credit portion Variable rate **Prime + 1% **2.25% + 1% = 3.25% Line of credit can be increased up to 80% of the value of the home
	Mortgage balance today $ 210,000 Variable rate 5 year term Or Fixed Rate 2, 3, 4, 5, 7, 9 and 10 year terms 5 yr fixed = 3.69% variable = **2.25% + 0.80% 3.05%

The top portion represents the percentage of your home that cannot be financed and that is 20%.   20% of your home value, must remain as firm equity and cannot be financed.    The next portion down, is your line of credit portion.   The line of credit portion can go up to 80% of the value of the home.   The final portion is your actual mortgage loan portion today, that you decide to convert over, when you move into this product.    I took, for example, a home owner who has a current home with a value of $380,000.     This client also has a mortgage balance right now, with a lender, at $210,000.   By moving into the mortgage + line of credit, the current mortgage amount of $210,000 is set up as either a FIXED mortgage rate, or a VARIABLE rate mortgage.   The borrower can then use up to 80% of the home value at anytime.   So using these numbers above, the home owner can borrow up to an additional $94,000 at anytime.

It is important to mention……. this kind of mortgage product requires a very disciplined borrower as reckless spending or improper investing strategies could have a very negative outcome, a higher debt and possibly the inability to re-pay the debt.

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga

and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880

Brokerage Lic # 10680

NOTE:    Mortgage rates are effective as of May 17, 2009.   **The variable rate amount can go up or down depending on current posted Prime Rate.  Mortgage rates are subject to change without notice.

Financing: bank or broker?

Are you still undecided on whether you should deal with a bank or a mortgage broker?  Here is a short summary of what some compelling truths are, around this subject.

A mortgage broker acts as a MEDIATOR or a representative between the borrower and the bank.

Here are some straight-forward questions to consider:

a) what if something goes wrong?

b) who will represent you?

c) will you be able to navigate through escalation channels to get something done?

d) will you be able to successfully negotiate what you want on your own?

e) what if the lender says no?

f) how easy will it be for you to get the deal you want from another bank and on your own?

You may be asking, so how does a broker mediate between the borrower and the bank?

If for example, an office has 50 representatives, who are actively carrying on in the business of dealing in mortgages.  Lets say that each representative has placed 2 million dollars of mortgage business with a particular lender.  The brokerage now has a combined volume of 100 million dollars of business with that particular lender.  Now that kind of business volume will make anyone sit up and pay attention, agree? So essentially the high volume of mortgage business, that a brokerage has, for a lender, will automatically secure some real benefits for the person looking for financing:

1) the lender may now pass along additional mortgage rate discounts to those brokerages who have reached a particular sales volume;

2) a large brokerage will immediately receive dedicated focus and attention from individual lenders, for example, dedicated underwriters.  A dedicated underwriter means that a submitted mortgage deal is reviewed quickly and this is essential to maintain the service level to the demands of a busy brokerage.   For the borrower, this means that a difficult situation can be escalated quickly to senior management and issues can be reviewed and approved that an individual may not easily accomplish on their own.

This blog was written by Elizabeth Blair, a licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients primarily in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office::   15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

3.59% on a 5-year fixed rate

Canadians…..mortgage rates just keep on coming down!

Realtors:  if you have a client who needs financing, please call me for details on this great mortgage rate.

Elizabeth Blair, Mortgage Edge

Direct: (905) 510-5785

Email:  eblair@mortgageedge.ca

website:   http://www.missmortgage.ca

License # M08005880

Look out Ontario: more taxes are coming your way

Is the bad news about our economy, the slumping housing industry, and more lost jobs enough to have you down and out?   Wait there is more bad news heading your way.   Yes the poor, beat-up and overtaxed Canadian family, living in Ontario, is about to face more taxes.   Primarily, the tax is directed at the housing industry so if you plan to buy a newly constructed home, or sell your home, you will be facing this new tax in Ontario.

Announced on March 26, 2009, the Ontario Liberal Government, Dalton McGuinty, is fine-tuning their annual provincial budget which is scheduled to take effect on July 1, 2010.   The new budget is going to merge the current 8% PST and 5% GST, into a new “harmonized” tax.  If you think that is a harmless undertaking, have a close look at some of the housing-related services that will now be taxed:

Buyers who purchase a newly constructed home, after July 1, 2010, where the value is greater than $400,000, will be required to pay a 13% tax. For example, if you purchased a house for $500,000, the additional tax, added into the mix, would stick you with a $65,000 tax.  It is important to mention, that this harmonized tax would NOT apply to re-sale homes.  This has Ontario home builders especially worried as they are already dealing with excess inventory now and current deterioration of prices. With the introduction of this tax, newly-built, higher-priced homes, from builders, will be very difficult to sell.

If you are planning to sell your home, after July 1, 2010, you would be required to pay a 13% blended tax rate.  The new 13% tax rate will replace the current 5% GST calculated on a realtor’s commission. Here below is an example of what a $400,000 sale price might look like, comparing today’s 5% GST and the coming 13% blended tax. This 13% tax will apply on the service, regardless of the sale price of your home. The tax will be charged, whether you utilize the services of a professional real estate agent or a discount service provider. Realtors, no doubt, will be facing disgruntled sellers who will push even harder to negotiate the commission down because of the new added costs a seller will face: a higher tax, a lower home value and less cash room for sellers to maneuver.   The 13% tax will be a big burden especially since real estate values are predicted to face challenges right into 2010, when the new tax is introduced.

Sale Price of the Home = $400,000
Now			After July 1, 2010
Real Estate Fees			Real Estate Fees
5% to Realtor	$20,000		5% to Realtor	$20,000
5% GST	$1,000		13% harmonized tax	$2,600
Total Selling Cost	$21,000		Total Selling Cost	$22,600

The list of affected services, does not stop there.    The following, in the housing and services industry, will also be required to top up their invoice with this new 13% tax:

– legal services

– home inspection services

– landscaping

– renovation services

– land survey services;and there are others too.

Of course the Ontario Government is really beginning to lick their lips with glee, as this new tax is estimated to bring in over $300 MILLION in tax revenues, and the revenues are only estimated for the closing of home sales alone.  With a surging deficit, the Ontario government is going straight into our pockets for help.  Many in Ontario are unhappy about the proposal but like most legislation in Ontario, it is passed without the strong-arm to stop it.

For me, as an Ontario resident, a move to the province of Alberta sounds really tempting right now, especially since our friends out west do not pay any provincial sales tax!

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.

Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: http://www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca Lic # M08005880 Brokerage Lic # 10680 Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.