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 Covenantor or Guarantor on a mortgage?

Here is a description of the covenantor and guarantor position, as it relates to a mortgage application.

The key difference between a “covenantor and a guarantor” are:

Covenantor:   is on property title, and is also on the mortgage application.

Guarantor:    is NOT on property title, but is on the mortgage application.

Both of the above (depending on what position is chosen) would be on the mortgage application.  Covenantor or Guarantor are added onto the application and would have to disclose all the same information just as the primary applicant(s) would, for example:

1. legal names

2. address

3. disclosure of all assets owned, mortgage, value of home, etc.

4. disclosure of all debts held

5. credit report must be retrieved

6. employment history

7. employment income

From the mortgage lender’s perspective, the covenantor or guarantor position, actually helps to give some “strength” to the application, however, the covenantor or guarantor’s income is not used to actually “Qualify” the primary mortgage applicants.

It is important for the covenantor or a guarantor to understand that if the primary borrower(s) should ever default on the mortgage, the covenantor or the guarantor would be financially responsible to pay the mortgage payment(s) to avoid issues which would arise from non-payment of a mortgage obligation.   It is also important to note that the covenantor or guarantor’s financial status is assessed to determine whether they could feasibly be able to carry the mortgage application, in the event that the primary applicant(s) could not continue making the mortgage payments.

This article was written by Elizabeth Blair on June 11, 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 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) http://www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

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

Fed up with telemarketing calls!

Fed up with telemarketing calls so I finally did it…….. I picked up the phone and called the CRTC to make a complaint about an unsolicited telemarketing fax I received last night on my fax machine. A telecom company decided to fax me one of their marketing ads which annoyed me.

A few years ago, the CRTC (Canadian Radio Television and Telecommunications Commission) set up the “National Do-not-call Registry” in Canada which is an online tool where individuals can register their telephone numbers on this registry. This tool became available after Canadian Government passed Bill C-37 and it became law empowering CRTC to issue fines on those who violated the do-not-call rules. I remember when I first heard about this tool, I pounced on the opportunity immediately to register my numbers.

Once listed on the registry, a telemarketer should not contact you to solicit your business or money. Now there are some exceptions on those who can call you and these are charities, newspapers, political parties seeking your support, or a business where you already have had recent consumer transactions. Once you register your telephone number, it takes 31-days, after you register your telephone number, and after the 31-day period, telemarketing companies, other than those listed above, cannot call your number and if they do, they can face fines if you register a valid complaint. Note that the registration of your telephone number is only valid for three years, so after three years, you should call the National do not call registry to re-register your phone number.

To register your number on the registry in Canada, go to this website:

https://www.lnnte-dncl.gc.ca/index-eng

So the process was easy. I called 1-866-580-3625 begin_of_the_skype_highlighting              1-866-580-3625      end_of_the_skype_highlighting begin_of_the_skype_highlighting 1-866-580-3625 begin_of_the_skype_highlighting              1-866-580-3625      end_of_the_skype_highlighting end_of_the_skype_highlighting and spoke to a very helpful lady, who asked me a few questions:

1) what number did the telemarketer call me at?

2) what is the name of the business, and the phone number of the business that called me?

3) what was the date that the telemarketer contacted me?

And, to top it all off….I received a faxed document – perfect printed “evidence” !!!

She then gave me a unique ID code number, which I was to write across the fax transmission I received, and then she asked me to fax that document I received to this number: 1-888-362-5329 begin_of_the_skype_highlighting              1-888-362-5329      end_of_the_skype_highlighting begin_of_the_skype_highlighting 1-888-362-5329 begin_of_the_skype_highlighting              1-888-362-5329      end_of_the_skype_highlighting end_of_the_skype_highlighting. She then advised me that any future calls or faxes I received from telemarketers, must be called in and registered separately as they assign a unique ID code to each call or fax……….. Easy!

We have family, in the United States, and we were told that the Federal Communications Commission (FCC) Do Not Call Registry, has hefty penalties for telemarketers who do not comply. I found a good example of that — AT&T was fined $780,000 for failing to comply with the Do Not Call Registry. Wow, $780,000!!!……don’t mess with the US or at least don’t mess with the US FCC!! Here is a link to the article – I’m not sure if the fine was ever collected, but I hope it was.

http://www.allbusiness.com/legal/consumer-law-telemarketing-regulation-do-not/10221784-1.html

Somehow the CRTC in Canada is just a little weak in the area of imposing penalties to telemarketers who call those who have registered their numbers with the do-not-call list. Canadian companies, who still wish to bother us with their telemarketing calls, have found ways to get around the rules by outsourcing their telemarketing calls to overseas companies…..now that I have followed through on the complaint process, I will be sure to ask some questions to find out who the Canadian company is and what their local number is, so that I can follow through with a formal complaint.

The CRTC in Canada has, what I would consider, “wimpy” penalties especially since consumers need assurance that offending companies really do get the message and avoid calling those who do not wish to be called.   For example, in Canada, if found guilty, an individual can be fined $1,500 whereas a corporation can be fined up to $15,000 for each violation.   It seems the number of fines issued is also very minimal relative to the actual number of reported telemarketers in violation – see this link:

http://www.crtc.gc.ca/eng/dncl/status-etape.htm

Sorry fellow sales friends, but I’m going to have to tell you that its not the way we should be getting business anymore.  Too many people are just simply fed up with telemarketing calls.

© 2010 This blog was written by Elizabeth Blair at Mortgage Edge on March 23, 2010. Elizabeth Blair services mortgage clients primarily in Mississauga and all over the Greater Toronto area You can contact Elizabeth directly by phone at (905) 510-5785 begin_of_the_skype_highlighting              (905) 510-5785      end_of_the_skype_highlighting begin_of_the_skype_highlighting (905) 510-5785 begin_of_the_skype_highlighting              (905) 510-5785      end_of_the_skype_highlighting end_of_the_skype_highlighting 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: Park Place Corporate Centre, 15 Wertheim Court, Suite 210, Richmond Hill, ON, L4B 3H7, 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 rates on the rise

Recent bond increases is putting extreme pressure on lenders to raise fixed rates.   If you are shopping for a home, or renewing  a mortgage in the next 120-days and you take fixed rate products, now is a good time to negotiate the mortgage rate.

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

Beware of hasty mortgage switches

We are now in an environment of lower interest rates. Perhaps you are the person who is sitting in a mortgage rate at 5.7% and the thought of moving to a mortgage rate of 3.50% has you very tempted. Before you do anything, you must be absolutely sure that your mortgage penalty is not going to be a shocking surprise.

There are two formulas used to calculate a mortgage penalty, the first is the standard three month’s interest penalty, and the second is IRD: Interest Rate Differential.

The following link will show you how these two mortgage penalties are calculated:

http://www.fcac-acfc.gc.ca/eng/publications/mortgages/PenaltyCharges-eng.asp

Banks will sometimes use the IRD calculation, especially in an environment when interest rates are declining. It is very unfortunate that many individuals do not understand this, or have this explained, when they are signing a mortgage contract.

I witnessed, this week, a close neighbour, who visited her bank. She was moved from a 4.6% to a 3.6% mortgage rate. She thought this was a wonderful deal, however, she was required to pay a $5,000 mortgage penalty. I sat down with her, and showed her the amortization schedules based on the two mortgage rates, over five years, and demonstrated that her savings would only be a grand total of $2,000. She had been misled by the banker to focus only on the “great rate” but failed to properly advise the client that the savings on the lower rate were really washed away by the monstrous penalty amount. A move that was probably motivated by a desire to get a new mortgage deal on the books and bump up their sales numbers and at a very serious expense to the client. Others, I am sure, are all happily breaking mortgage contracts, without really understanding the numbers. This neighbour had already signed all of the paperwork with the bank and she hung her head in shame, that she did not contact me first to help her understand the implications of a new mortgage. Be careful you are not lured by the “great rate” especially when there is a handsome penalty associated with the move.

If you are concerned about how your own mortgage will look, with a move to a lower rate, please call me to show you the real numbers.

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