I always strive to leave the impression with my customers that the mortgage business is a service business first. You don't make a profit on one mortgage; you make it on the lasting relationships you establish. It's all about building partnerships.
The relationships I build with my customers are based on the same values I share with my family. Reliability, honesty and commitment are traits that have always impressed me. It seems natural to extend those same values to my customers
Your Banker's 6 Dirty Secrets...
There is a fine line between telling a lie and avoiding telling the truth. It comes back to intentions you can be hurt by a clever omission as easily as you can by an outright lie. It wont come as a surprise, but there are some things your bank would rather not tell you. Well look at six dirty secrets your banker has been keeping.
1. You probably dont need the insurance
Banks offer insurance, sometimes marketed as balance protection, on every debt instrument they offer. You can get insurance on a credit card, line of credit, plain vanilla loan and so on. In return, your payments are covered in certain cases and a death benefit is paid if you die with the debt.
Going through the contract can be interesting and enlightening for consumers. Often many conditions have to be met to receive the hardship qualifications to cover payments and the death benefit is capped at a maximum that may be much less than the value of the loan.
Your banker isnt to blame for that, the bank is. Where the bankers omission comes in is in not advising clients that their life insurance policy may already be enough to cover the new debt already and if not, adding coverage for the amount of the debt will be much cheaper in the long run than paying an extra percentage of your balance on top of the interest.
2. Even if I like you, the system decides
Many banks market the fact that you can go into any branch and have a productive conversation with their representatives the human touch. If you are looking for a loan or mortgage however, theres little human element to the decision process.
Large banks use a computer model that takes inputs such as income, current debt levels and assets, and decides whether you qualify for a loan and, if so, how much. For most people, this process is flexible enough that they dont notice. For farmers, entrepreneurs and business owners, though, this process can be enraging because it discounts elements of their business and often paints them as credit risks.
3. Im a salesman
There are many different terms for it complete banking, one-stop banking, holistic service but when it comes down to it, your banker is there to cross-sell you other products from the bank. Have a chequing account? How about a savings account, credit card, savings bond and a retirement account? Banks want to lock in a customer as much as possible.
4. We offer a complete package to get complete fees
Once a customer opens an account, the pressure is on to open three more. Holding more of a customers financial life at the same bank gives banks the ability to encourage the customer into more fee-bearing accounts without having to worry about the customer shopping around for a better deal. Your banker will never tell you that the bank down the road charges less in service fees and offers the same interest. Instead they emphasize the ease of transferring funds between your accounts within the branch, the transfer fees they wave and the deal they have on balance protection insurance.
5. We make more money from fees than banking
Banks have been pulling an ever-larger slice of their revenues from fees. The tipping point came in the late 90s, when fee income climbed to over half of revenue for the largest banks. Most people, your banker included, will tell you a bank makes its money off the interest it earns from loans to customers. And given how important fees are to revenue, take three guesses at which direction they will be heading in the future.
6. Use a mortgage broker
The biggest secret your banker is keeping is that mortgage brokers have access to the best rates in the business and represent ONLY the clients BEST interest. Instead, your banker will focus on the convenience of having lots of friendly staff wanting to serve you. All those people and buildings cost a lot to keep going. This cost is one of the reasons banks need to tighten their lending models and up their fees. By contrast, a mortgage brokers service doesnt cost you a penny.
The bottom line
Your banker is there to protect the banks interest, not necessarily yours. Its time to look into a Mortgage Broker. Just dont ask your banker for a recommendation, thats another of those things he just wont say.
Mark Fidgett is a Vancouver mortgage broker and the driver behind www.AdvancedEquity.ca
Your Vancouver Mortgage Broker For Life
Canadian home sales activity improves in June
Statistics released today by The Canadian Real Estate Association (CREA) show national home sales were up from May to June 2018.
National home sales rose 4.1% from May to June.
Actual (not seasonally adjusted) activity was down 10.7% from June 2017.
The number of newly listed homes eased 1.8% from May to June.
The MLS Home Price Index (HPI) in June was up 0.9% year-over-year (y-o-y).
The national average sale price edged down 1.3% y-o-y in June.
National home sales via Canadian MLS Systems rose 4.1% in June 2018 compared to May. While this marks the first substantive month-over-month increase this year, sales remain well down from monthly levels recorded over the past five years.
More than 60% of all local housing markets reported increased sales activity in June compared to May, led by the Greater Toronto Area (GTA). By contrast, sales in British Columbia continue to moderate.
Actual (not seasonally adjusted) activity was down almost 11% compared to June 2017. Sales marked a five-year low and stood almost 7% below the 10-year average for the month of June. Activity came in below year-ago levels in about two-thirds of all local markets, led overwhelmingly by those in the Lower Mainland of British Columbia.
This years new stress-test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift, said CREA President Barb Sukkau. The extent to which the stress-test continues to sideline home buyers varies by housing market and price range. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future, said Sukkau.
Bank of Canada raises overnight rate target to 1 ½ per cent
The Bank of Canada today increased its target for the overnight rate to 1 per cent.
The Bank Rate is correspondingly 1 per cent and the deposit rate is 1 per cent. The Bank expects the global economy to grow by about 3 per cent in 2018 and 3 per cent in 2019, in line with the April Monetary Policy Report (MPR). The US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.
Canadas economy continues to operate close to its capacity and the composition of growth is shifting. Temporary factors are causing volatility in quarterly growth rates: the Bank projects a pick-up to 2.8 per cent in the second quarter and a moderation to 1.5 per cent in the third. Household spending is being dampened by higher interest rates and tighter mortgage lending guidelines. Recent data suggest housing markets are beginning to stabilize following a weak start to 2018. Meanwhile, exports are being buoyed by strong global demand and higher commodity prices. Business investment is growing in response to solid demand growth and capacity pressures, although trade tensions are weighing on investment in some sectors. Overall, the Bank still expects average growth of close to 2 per cent over 2018-2020.