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
Almost no annual growth for national HPI
The national HPI has grown at a below-inflation rate of 0.5% over the last 12 months, the smallest gain since November 2009. Moreover, the fact that monthly gains are reported for May and June does not mean that the market recently turned the corner. These two months typically register the strongest growth rates in a year. Indeed, the two latest rises were among the weakest in history for months of May and June. If seasonally adjusted, the national HPI would been down in both months this year. However, the weakness is not regionally broad-based. The national HPI was dragged down by 12-month home price declines in Western Canada metropolitan areas (Vancouver, Calgary, Edmonton and Winnipeg) and a tiny increase in Victoria. In Central Canada and in the East, home price growth ranges from decent to strong (left chart). This is consistent with the state of home resale markets. For example, the Vancouver market turned favorable to buyers at the end of last year, while the Toronto market remained balanced and Montreal’s market has never been this tight since 2005. That being said, a rebound in home sales recently occurred in Canada which was also felt in the largest Western metropolitan areas. This should help limit home-price deflation in these areas.
The Teranet–National Bank Composite National House Price Index increased 0.8% in June, a second gain in a row after an eight-month string without a rise.
On a monthly basis, the index rose in 8 of the 11 markets covered: Winnipeg (0.1%), Quebec City (0.3%), Montreal (0.8%), Toronto (1.3%), Halifax (1.5%), Hamilton (+1.6%), Victoria (+2.1%) and Ottawa-Gatineau (+2.2%). The index was down in Calgary (-0.1%) and Vancouver (-0.3%), and flat in Edmonton.
From June 2018 to June 2019, the Composite index rose 0.5%, the smallest 12-month gain in ten years. The HPI declined in Vancouver (-4.9%), Calgary (-3.8%), Edmonton (-2.6%) and Winnipeg (-0.4%). It was up in Victoria (0.3%), Quebec City (1.5%), Halifax (2.7%), Toronto (2.8%), Hamilton (4.8%), Montreal (5.4%) and Ottawa-Gatineau (6.3%).
Source: National Bank Financial Markets; Marc Pinsonneault
NORTHERN STAR (FOR NOW...)
In contrast to the US, Canadian growth is accelerating sharply going into the second quarter, following a solid gain in domestic demand to start the year.
Fast, and accelerating, population growth, and remarkably strong employment growth are providing a solid underpinning to consumer spending and the housing market.
Positive export data suggest that the ongoing strength in domestic demand will be buttressed by net exports in the second quarter, and possibly beyond.
Canadian inflation is at the Bank of Canadas target, in sharp contrast to the US, where it has moved away from the Feds objective. This gives the BoC room to keep rates on hold if inflation remains on target.
Downside risks remain important and are all linked to US-centric developments, with worries about US trade policy ongoing despite the pause with China.
Recent Canadian developments stand in sharp contrast to events in much of the rest of the world. Whereas US growth is clearly decelerating, Canadian growth is on an upswing, with recent indicators pointing to a very sharp rebound from a somewhat sluggish start to the year. Canadians appear to be, for the time being, largely insulated from the broader malaise facing the global economy as consumer and business confidence has improved sharply in recent quarters, owing to strong sales and job creation. While there are a number of factors suggesting that the growth rebound observed will persist through 2020, there is a risk that a divergence between Canadian and US outcomes may not last.
Source: Scotiabank Economics