Author Archives: hal

Nov 21

Shopping For A Mortgage-A Matter of Trust

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Hal Peterson AMP, FICB

Hal Peterson AMP, FICB

Why use a Mortgage Broker? This is a question that many people ask themselves when they are looking for a mortgage to make a purchase or when they are renewing their existing mortgage. Most Canadians rely on the Banks and Credit Unions to provide them with the "best mortgage". It is all about trust. We Canadians trust our Banks and Credit Unions to give us the "best mortgage".

But is this trust deserved? Certainly, every banker I have met is trustworthy. However, they do work for the Bank, not for you. And that is not a good thing for you when you are shopping for a mortgage. The Bank or Credit Union officers can only offer their own mortgage products, and at their own rates. If you are a great negotiator, you “might” get their best mortgage. If not, you could be leaving hard earned dollars on the table. And, their best mortgage might not be as good as the best mortgage offered by another lender.

A mortgage broker does not work for any one Bank or Credit Union or Trust Company. A mortgage broker has access to virtually ALL the best mortgages being offered by ALL the best Canadian mortgage lenders- including the Banks and Credit Unions. So you are guaranteed that you will get the best mortgage when you deal with a mortgage broker.

It is all about trust. Who are you going to trust? Your banker, that works for the Bank’s best interest? Or your mortgage broker, who works for your best interest?

Mar 24

Refinancing vs Penalties

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Hal Peterson AMP, FICB

Hal Peterson AMP, FICB

Interest rates are at historical lows (March 20, 2009). The Chartered Lenders’ prime variable rate is 2.50% and most offer a variable rate mortgage at prime plus .80% p.a. Their fixed mortgage rates are also extremely low, with many lenders now offering 4.15% fixed for five years and 5.25% fixed for 10 years! If you have a mortgage, I urge you to review your situation now. In many cases, an early renewal will result in significant net savings to you.

Lenders have a legal and contractual right to charge you an interest penalty if you choose to break your mortgage contract, so you need to find out what your penalty would be. Most lenders charge you the greater of three months’ interest OR what they call IRD or Interest Rate Differential. You can determine your penalty by obtaining (without charge from your lender) what is usually called a ” mortgage discharge inquiry”. I can help you with this, should you prefer.

There are loads of lenders looking for your business. Their interest rates are fantastic. Your net gain in five or more years, net of any payout penalty, may astound you.

Talk to your mortgage broker. Talk to me.

Mar 07

First Time Purchasers

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Hal Peterson AMP, FICB

Hal Peterson AMP, FICB

I bought my first home in 1971 and, like many first time home buyers, I knew very little about buying a home. In 1971, homes cost about 3 times a person’s annual gross salary. Financing was achieved via greements for Sale, CMHC direct lending, or from your Bank, Credit Union or Trust Company. Interest rates were fixed at 6%. Terms and amortizations usually coincided at 25 years.

The process of buying a home today is still confusing to most first timers….

  • When should we buy?
  • Where should we buy?
  • How much can we afford?
  • Should we go with a variable rate or a fixed rate?
  • What will our payments be?
  • Should we go short term or long term?
  • What will our costs be?
  • Are there any programs to assist first time home buyers?
  • Should we get a Pre-Approved Mortgage?
  • Should we get our financing directly from our Bank or through a Mortgage Broker?

To me, the most important thing for a first time home buyer is to partner with Professionals: a Realtor, a Lawyer, and a Mortgage Broker.

The Realtor will help you find the right home and help you prepare your Offer to Purchase Contract.
The Lawyer or Notary will review your Contract and warn you against legal pitfalls.
The Mortgage Broker (that’s me) will inform you of any programs for first time buyers, will ensure you get the very best mortgage financing available, and will work with you through the entire process to a satisfactory completion of your purchase.

I recommend first time buyers review our website at www.mortgagesbc.ca for helpful information, including particulars of the several programs available to first timers from both Federal and Provincial governments. Since 1971, working as a banker and now as a mortgage broker, I have helped many people buy their first home. Despite the ups and downs of house prices and mortgage rates, I sincerely believe home ownership is an excellent goal for all Canadians. If you don’t yet own your own home, I urge you to contact a Mortgage Broker and begin the journey to home ownership. The Mortgage Broker will provide the answers to all your questions and work with you to a happy ending.

Why a Mortgage Broker instead of a banker? The banker works for the Bank, not for you, and can only offer that Bank’s mortgage products; and at prices dictated by their Head Office. Mortgage Brokers work for you and can locate the best mortgage for you, which might be from your own Bank or Credit Union or from a Trust or Mortgage Company. Like the banker, the Mortgage Broker does not charge for his services to you. Unlike the banker, the Mortgage Broker can and will offer you the lowest broker-discounted interest rates.

Go ahead, first timer. Buy now. Just make sure to surround yourself with the right professionals.

Mar 03

Breaking Your Mortgage…Is It Worth It?

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Hal Peterson AMP, FICB

Hal Peterson AMP, FICB

Interest rates are at historical lows. The Chartered Lenders’ prime variable rate is 2.50% and most offer a variable rate mortgage at prime plus .80% p.a. Their fixed mortgage rates are also extremely low, with many lenders now offering 4.15% fixed for five years and 5.25% fixed for 10 years (as at March 3, 2009)!

If you have a mortgage, I urge you to review your situation now. In many cases, an early renewal will result in significant net savings to you. Lenders have a legal and contractual right to charge you an interest penalty if you choose to break your mortgage contract, so you need to find out what your penalty would be. Most lenders charge you the greater of three months’ interest OR what they call IRD or Interest Rate Differential. You can determine your penalty by obtaining without charge from your lender what is usually called a ” mortgage discharge inquiry”. I can help you with this, should you prefer.

There are loads of lenders looking for your business. Their interest rates are fantastic. Your net gain in five or more years, net of any payout penalty, may astound you.