What is the Right Mortgage?

 

Finding the Right Mortgage

I was listening to the radio today on my way home from the office and I heard advertising from a competing mortgage brokerage.  They were suggesting that a benefit they offer is to allow the clients to put their own mortgage together, assembling the features they want to get the Right Mortgage.  I am finding that many banks and Mortgage brokers a becoming more like fast food joints advertising rates and packages meals but not explaining the value or the pitfalls of each feature.  If I am sick and am in need of health services do I go to the doctor and tell him how he is going to fix my problems?  No of course not the doctor is the professional and you describe what is the end result you are looking for and why.  Then the Medical professional will give you advice and suggest what steps need to be taken to reach that goal.  You have the last say of course as you can decide if you want to listen or not.

 

To give my competition a break I understand what they are getting at, they are suggesting that they give more choices to their clients.  Here is my problem, Mortgage Brokers and banks are taking orders but they aren’t digging deep enough to see what the client really needs and wants.  

Lets just say a client comes and tells me that they are looking to refinance their mortgage and they are looking for the best rate for a 5 year term, 25 year amortization, and 20% down.  If I was taking orders I would say, “YES SIR, and would you like fries with that?”  As a professional I would be asking why and follow up questions to each one of these requests.  Here are some examples of just a few:  

Why a 5 year term? -  Is this your dream home? Is it possible you might move, sell or access your equity within the next 5 years?  Are there any other high interest and large monthly commitments that you would like to reduce?

Why a 25 year amortization? – What is the end goal of the property?  Is it realistic to pay off your mortgage in 25 years?  Can you afford the payments?  Do you feel you could survive making these payments if you or your spouse’s hours were cut back, are on maternity leave, or laid off?

Why 20% down? – Are you just looking to avoid CMHC or Genworth premiums?  Is this all the savings you have?  Are you looking to re-furnish your new property or cover the costs of moving?  Could you find a safe investment that would earn you a better Rate of Return on your money?  What is the exit strategy for this property?

There is nothing wrong with wanting these features for your mortgage actually I would suggest them in some cases.  If you want to get the best terms and conditions for your mortgage financing you have to work with someone that will take the time to educate you on the pros and cons of each decision.  Here is part of a testimonial from Kingsley that illustrates how this can save you thousands.  

“In June 2008  my mortgage came due and as a true procrastinator I left it until the last moment.  My previous five year fixed rate was 4.95% and now because of Richard’s advice it is now at 3.40%; that’s a 1.55% rate drop!  More impressive than my percent rate drop was the service Richard provided.  He recommended a course of action that was best for me, not for him.”

Most bankers and Mortgage Brokers won’t make suggestions because they either don’t know what they are really doing or they are afraid they will suggest the wrong thing.  This is where I ask the right questions and I keep up to date with what is going on in the industry so I can provide the answers for each client’s situation.  If I wouldn’t have asked a few more questions and offered Kingsley the advice he would still be at 4.95% instead of at his current rate of 1.9%.  You know best what you want and need and I know how to get it for you.