Archive for the ‘Personal Finance’ Category
January 27th, 2012 | 
Author: 
First-time homebuyers have traditionally been an important segment of the market for mortgage brokers and a new product from Mortgage Alliance aims to strengthen that relationship.
My First Mortgage, which offers customers a competitive rate also includes: all the legal costs and title insurance. But there’s more. The first-time buyer also receives home insurance coverage for six months and six month’s of creditor life insurance coverage.
The announcement was just one of many made in Toronto on Thursday at Mortgage Alliance’s annual Kick-Off Rally. The event brought together more than 500 members, while others in Calgary and Vancouver watched the action on live streaming video. The event also featured a trade show exhibit in all three locations featuring MAC’s lenders and ancillary strategic partners.
Mortgage Alliance president and CEO Michael Beckette called My First Mortgage “an attractive product that’s been bundled with the essential service and insurance products in an all-one-one mortgage.
“We wanted to focus a product that will help grow our broker’s business amongst our most important consumer group AND that will appeal to our broker’s realtor partners,” said Beckette.
The new product offered exclusively through Mortgage Alliance brokers and agents will be immediately available to all Ontario residents with plans to roll out the brand nationally over the next few months.
Another major announcement made at the show was the unveiling of a new Mortgage Alliance web-only commercial to be aired on the company’s website in late February at the same time a new national radio campaign will be launched featuring the company’s $100,000 “Minimize Your Mortgage Sweepstakes Promotion,” now in its fifth year.
The ad features a fictional “Director of Apology” spokesperson that apologizes to the viewers for the injuries that keep happening to customers celebrating after they’ve received the good news from their Mortgage Alliance professional.
Louie Bettio, Brand Champion of Mortgage Alliance told MortgageBrokerNews.ca that the on-line commercial was created for two reasons. “Recent research conducted by Microsoft and Neilson’s media measurement demonstrated that consumer’s ‘likeability’ towards a company – especially in the financial services industry – is significantly increased when they see an original on-line video ad versus a repurposed TV commercial.
“Also, we wanted to take an otherwise stressful situation for a consumer and add some levity into the process, affecting favorability towards the brand and moving the consumer from consideration to conquest – in order to further grow our broker’s business.”
Still not done, MAC announced the launch of a new integrated and automated consumer correspondence program. The system called “IMPACT” will be a strategic advantage for brokers to stay in-touch and top-of-mind with consumers for both retention and referral building opportunities, according to Beckette.
“As we’ve learned and seen through the recent Maritz broker research, 67 per cent of brokers don’t contact their client post-deal,” he said. “Over the past seven years we have aggressively focused on helping out brokers build stronger broker-client relationships. Systems like MortgageBOSS help our brokers generate better ‘prospect-to-customer and customer-to-repeat customer conversion.’”
In a philanthropic note, Beckette, who was recently named Honourary Chair, announced that Mortgage Alliance has pledged to raise more than $200,000 towards The Weekend to End All Woman’s Cancer Charity in 2012.
Posted in 
With the holiday season in full swing, and more and more consumers pulling out plastic to fund their celebrations, here is a list we have created to help you save money before, during and after the holidays.
1) Get old debts under control
Are you still struggling to pay off LAST year’s holiday gifts, let alone this year’s? If you have a large outstanding balance on your credit card, make a point of getting it under control. Look into transferring the balance to a card that offers a low introductory rate on balance transfers, i.e. a 0% balance transfer credit card. This means that more of your payments will go towards paying off the balance and not just the interest.
2) NEVER just pay the minimum
If you have $1,000 owing on a credit card and only pay the minimum amount each month, it will take you almost 10 years to pay it off and cost you an extra $1,056.70 in interest – yikes! Make sure you’re paying more than the minimum interest owing each month. And, if you regularly forget to pay the balance on your credit cards, set up an automatic payment from your bank account to your credit card, so you don’t get stuck with extra interest charges.
3) Look at your bill
You may be happy shopping for your niece or father in-law, but you’re probably not interested in buying a gift for the guy behind you in line at the store, or a scam artist on their computer overseas. Regularly view your credit card statement online to make sure you actually bought what you’re being charged for. Christmas is a busy season and fraudsters are on the move. Also, pay attention to any admin or extra fees such as credit card insurance. Don’t get caught paying for something that you don’t use or want.
4) Don’t use your credit card to take out cash
Interest charged on cash advances is typically in the area of 19% – 22%. If you need extra cash,please give me a call so we can look at more cost effective ways in which to give you access to additional credit.
5) Ask for a lower interest rate
You don’t get what you don’t ask for. If you’ve built up a good credit history with your current provider, there is no harm in calling the credit card company to ask for a lower interest rate, especially if you intend to put more on your card this month than usual. You may need to threaten to cancel the card and take your business to another low interest credit card provider before they take action, but it may be worth it to lower your interest rate.
“The holiday season is an important time to look at your credit card debt and spending habits”, says Kelvin Mangaroo, President of RateSupermarket.ca. “But really it’s about putting in place good credit card practices that will help you save money year round.”
If you have any questions about how to manage your credit card debt please give me a call, so we can set up a time to go over your options.
“…you want to be deciding to refinance for the right reasons, with both eyes open…”
1. Make Sure of Your New Interest Rate
Make sure that you save enough to justify the process of refinancing. It is best to decrease your interest rate by at least .75% to 1%. For example, this will save you about $100.00 a month on a $150,000.00 mortgage.
2. Know Your Closing Costs Up Front
Closing costs will include the Lawyer’s fee plus disbursements. An Appraisal may be required as well as there may be Insurance Premiums and HST costs. Ask your mortgage professional to explain the cost that you might incur.
3. Be Sure You Fully Understand Your Reason(s) For Refinancing
Some refinance simply to reduce their interest rate. You should be aware that simply reducing your interest rate is not always to your advantage, so make sure that the gains from your rate reduction more than cover the related fees. There are, however, other legitimate reasons to refinance that may not be related to interest rates. Some are debt consolidation, home improvements, or a major purchase. Some of these choices may offer other financial or personal advantages, such as taking cash out to buy a car. In this example, you may be able to deduct your interest payments on your tax return. Always consult an accountant or tax attorney before making these types of decisions.
4. Beware of “APR” Advertising
“APR” stands for Annual Percentage Rate. Some mortgage brokers use “APR” teaser rates to get your attention, however, they may actually end up costing you more. Such rates are often derived by using a 30 year mortgage coupled with an accelerated payment plan. Most lenders allow you to select such a plan, if you chose. Know your actual interest rate that you will be paying when comparing mortgages.
5. Should I Consider an Adjustable Rate?
Adjustable rate mortgages or “ARM’s,” can be very good strategy as they are generally lower rates than a 5 year fixed rate for example. It is important to understand that the Adjustable Rate Mortgage is exactly that, the rate will fluctuate with current market conditions so always plan for a possible increase in rate and payments.
6. Beware of the Quality of Service Provided
You want your refinance to be accomplished with as little hassle and in the shortest period of time. Ask your mortgage broker details of their service plan and performance guarantees.
7. Not All Mortgage Brokers are Created Equally
Be sure to ask your mortgage broker about all their available loan products, terms and rates. A subtle difference can save or cost you thousands.
Mortgage regulations have changed significantly over the last few years. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.
Get the Right Information – Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you be informed about the factors involved.
Everyday people turn to a mortgage lender to help them refinance a home loan, but because many of them don’t know all of the important issues, they often make incorrect choices. By taking these few minutes to acquaint yourself with the “How to Avoid the 7 Biggest Mistakes Refinance Shoppers Make” you can reduce or eliminate the chances of making a critical error and save thousands on your mortgage.
Variable-rate mortgages are so over.
Go fixed rate if you’re arranging or renewing a mortgage, and think hard about the four-year term. If you take in all the recent developments in the mortgage market, this is the most logical strategy.
Variable-rate mortgages are being sold at the prime rate in many cases right now, which is 3 per cent. The traditional discount off prime? Snuffed out by the banks. They’ve decided they aren’t making enough money from discounted variable-rate mortgages, so goodbye discount for the most part. If you shop around, maybe you’ll get 0.2 of a point off prime.
Now for the fixed-rate alternative. Global economic uncertainty and sluggish growth mean you’ll pay in the area of 3 per cent for a four-year term. This explains why veteran mortgage broker Peter Majthenyi has pretty much given up on variable-rate mortgages.
“For 10 years, I’ve said don’t waste your money on a fixed-rate mortgage,” Mr. Majthenyi said. “Today, I just cannot in good conscience put a borrower into a 3-per-cent variable when for the same rate I can put them in a four-year fixed.”
Mr. Majthenyi calls this a “temporary break” from variable-rate mortgages. He’ll see what happens when today’s four-year terms expire. Meantime, he’s gone from writing about 98-per- cent variable-rate mortgages a year ago to virtually zero now.
Numbers from the Canadian Association of Accredited Mortgage Professionals (mortgage brokers, to put it in English) show that variable-rate mortgages had about one-third of the market as of this past spring, compared to 21 per cent four years ago. Interest in variable-rate mortgages was as strong as ever going into the summer as a result of an uncertain global economic outlook that was expected to keep interest rates low. Variable-rate mortgages could be had back then for 2.25 per cent, which represented a discount off prime of 0.75 of a point. Four- and five-year fixed-rate mortgages would have cost roughly 3 to 3.5 per cent, and that included a strong discount.
This was an ideal environment for variable-rate mortgages. The prime rate, used by lenders as a reference for many of their loans, was low and expected to stay that way for as long as it took for the global economic mess to resolve itself. The prognosis was for continued savings versus a fixed-rate mortgage.
Then came two developments that led to Mr. Majthenyi’s 180-degree turn against variable-rate mortgages. One, the cost of fixed-rate mortgages fell a little as a result of the stock market uproar in August and September. Here’s how that worked: Money flowed out of stocks and into bonds, which set the trend for mortgage rates. When a bond’s price rises, its yield falls. And so, as bond yields moved lower in the late summer, so did rates on fixed-term mortgages.
The second development was a decision by the big banks to clamp down on discounts given to customers going variable. “Bottom line, the banks have been stuck with too many variable-rate mortgages that are not profitable,” Mr. Majthenyi said. “How do they make them more profitable? They have to increase their profit on each mortgage.”
A few mortgage brokerage firms now advertise variable-rate mortgages at 2.8 per cent, or prime minus 0.2 of a point. But Mr. Majthenyi said many of the big lenders he deals with as a broker are now at prime. Looking ahead, he sees the market settling into prime plus or minus 0.2 for variable-rate mortgages.
You may still be able to save a token amount with a variable-rate mortgage over a fixed-rate mortgage with a term of four or five years. But it’s not hard to imagine the advantage of the variable rate disappearing in a year or so as the economy rallies. Then, you could be looking at a long period of rising rates.
So get over any ideas you have about variable-rate mortgages being cheap enough in the here and now to overlook the risk posed by future rate increases. In today’s market, variable-rate mortgages are yesterday’s news.
Finally, a quick word from Mr. Majthenyi for people who are in the middle of variable-rate mortgages with those juicy discounts of days gone by: Enjoy.
“You should hug and love those mortgages to the last possible moment because you’re probably not going to get them again.”
ROB CARRICK ,Globe and Mail Update