My Reverse Mortgage … The Best or Worst Thing I Ever Had

Reverse Mortgage Nathan Lawrence 25 Nov

By: Nathan Lawrence

As with any product, financial or otherwise, the appropriateness of the product to the situation that led to the purchase will directly impact the purchasers overall product experience.  When it comes to mortgages in general, the type of mortgage product, the reasons behind the need and the overall application should be properly considered and weighed against the alternatives before making a buying decision.  When options are presented and considered openly, it should lead to a positive outcome for the borrower.

I’ve have heard the full gamut of reasons as to why Reverse Mortgages are the best thing since sliced bread or the worst thing they have ever experienced.   When taking the time to gain a better understanding from people about why they feel either one way of the other, the answers are almost always the same…

Getting a reverse mortgage was a great decision because….It met all of our expectations….Kept us in our house longer, allowed us to travel, help grandkids, or it took the pressure off our monthly budget.

It was the worst idea ever because… we didn’t understand how the product worked and it didn’t completely help us do what we were planning.  Yup, that tends to be the main reason….not because of poor service, not because of the lender experience, but because the product simply wasn’t the right fit.

So which is it then? A great product or a not so great product?

Let’s say for a moment that you want to buy a new vehicle, something that you’re going to be driving year round and you settle on buying a Scooter.  Scooters are great on gas, easy to drive, low maintenance, simple to park and very inexpensive to purchase…but you completely neglect to consider the fact that you’re Santa and you live at the North Pole. In this case you’re probably going to be unhappy with your purchase. If you live in California on the other hand….you’ll probably love the scooter you purchased.

I find that people often forget that when getting a mortgage they really are purchasing a product/service. They receive the product (the borrowed money) and pay a set price for it (the interest rate).

In the case of a Reverse Mortgage, those who understand the product and have considered the different options available to them are very likely to be very happy with their decision to get a reverse mortgage.  WHY?…simply because they educated themselves on the product, made an informed decision and the Reverse Mortgage more than lived up to expectations.

 

If you are considering any kind of mortgage solution, you should always consider the different options that exist in the market, weight the pros and cons, and make an informed decision.

If you (or a family member) have questions about a Reverse Mortgage, the process or whether it is the right fit for you (or them), please visit www.MortgagesForRetirement.ca or call our team anytime.

Your Mortgage Tidbit – That’s an Expensive House!

Mortgage Tips Nathan Lawrence 19 Nov

By: Nathan Lawrence & Brianna Shortreed

Your Mortgage Tidbit:

Recently we found this article talking about the sale of the most Expensive Condo in Canada!  Check out the article Here!!!  So because we love mortgages so much and because we were curious…We put together the numbers to look at.

Assuming the following…

Purchase Price: $55,000,000

Down Payment (20%): $11,000,000

Mortgage Amount: $44,000,000

Interest Rate: 2.59%

Term: 5 Year Standard Fixed Closed

Amortization: 25 years

Here are a few BIG numbers for you:

Monthly Mortgage Payment: $199,083.00

Total Mortgage Payments Made over 5 years: $11,944,980.00

Total Interest Paid over the 5 year term: $5,252,927.00

#MortgageTidbit #NowYouKnow #SaveOnInterest #WeLoveMortgages

That Oh SO Important Financing Condition

Mortgage Tips Nathan Lawrence 16 Nov

By: Nathan Lawrence

There you are, sitting down with your realtor and preparing an offer to purchase for that amazing home that you just looked at this afternoon. You get to the point in the conversation with your realtor about the need for a financing condition and you’re trying to remember what you talked about with your Mortgage Broker earlier in the week….were you approved? Pre-approved? Pre-qualified?

So here’s the thing, when it comes to placing an offer on a new property, the financing condition should always be there. The only reason for leaving the financing condition out of an offer is because you know that you could dip into your savings account right now and buy the house with cash if you had too.

If you cannot purchase the house with cash, then you really should have that pesky finance condition in the offer and here is why…

We know already that you’ve met with your Mortgage Broker, they have everything on file and they have told you that you’re pre-approved. It is important to understand that the pre-approval they issued is based on the information they have collected about you. However, they have no information about the house that you’re eventually going to purchase.

When your future lender reviews an application in full, there are two sides to your application. There’s you and then there’s the house. It’s important to note that the lender is investing in the whole package and at this point, no one knew what house you were going to buy. Your Mortgage Broker isn’t likely to receive any information on the specific property until you have an accepted offer. It is at that point when they will update your application and send in all of the details for a formal approval.

So you’re now wondering why all of this matters considering that during your pre-approval meeting your Mortgage Broker told you that you’re the perfect clients (great income, great credit, great down payment and just all around great people).

But what about the property? The lenders (and CMHC if you have less than 20% down) want to know that the same is true about the house you’re buying. Here are just a few questions that they are asking themselves about the house:

  • Is it being purchased for fair market value?
  • Is it located in a marketable neighborhood?
  • Are there any major or obvious defects that could affect its value
  • Is the house a previous grow op?

If something negative about the house comes back as part of the review, it could mean that the lender (or CMHC) could decline to finance the property. The financing condition gives you a way out of the agreement should something happen at this point. If you don’t have a financing condition, you could end up being legally tied to purchasing the home, with or without financing lined up. Definitely not a position you want to be in, so take the time to protect yourself by ensuring your offer to purchase includes a financing condition – and speak with us at Dominion Lending Centres.

The Rate Mentality

Interest Rates Nathan Lawrence 11 Nov

By: Nathan Lawrence

THIS JUST IN, MORTGAGE INTEREST RATES ARE…..and there it is again…headline news about another low rate from one of the main lenders.  But what does it all mean and why does it continue to grab the headlines on the evening news?

It probably comes as little surprise that mortgage financing in Canada is big business and very competitive business.  When you sit back and think about it for a moment you’ll probably start to realize that all of those headings, almost every one of them, are talking about the low rates.  “Great no frills Special”, “Employee Pricing”, “First Lender to drop their rate”.    For the most part Media puts the focus on the interest rate and as a result mortgage consumers are geared,…or better yet, are driven to make the interest rate the first and only thing they ask their mortgage specialist about.

Now don’t get me wrong, the interest rate is a big part of the conversation you should be having with your mortgage specialist.  It is after all, the cost you’re paying to borrow the funds.  However, the conversation should never stop at just the interest rate.  There are a number of other key details that you should understand as a mortgage consumer before you sign on the dotted line.

The conversation should focus on what your plans are over the next few years (paying special attention to the time frame that is reflective of your mortgage term length).   Have you thought about any of the following?

  1. What are the chances you will experience a job change over the term of the mortgage? (lay off, role change, transfer, etc)
  2. Do you have any major life changes in the near future (getting married, new child, etc)
  3. How about major expenditures? (Wedding, expanding family, replace a vehicle, etc)

These are just a few important details that your mortgage specialist is likely to want to know about.  How you answer those questions will likely impact the recommendations they have for you with regards to lender or term.

So what gives?  How will knowing those details impact their term/lender recommendations?

Well to sum things up, they want to know how to save you money upfront but also over the term of the mortgage.  Lump sum payments and portability options are just two ways that they make this possible.  In addition, knowing if there are any special restrictions or how the pre-payment penalty is calculated can save you thousands should you have to break your mortgage term early.

The bottom line?

When it comes to mortgages products, there is way more to the decision than simply the rate.  It is important to understand restrictions, flexibilities and how the pre-payment penalty is calculated.  Never simply assume that the lender with the lowest rate is the best.  Sometimes it will be, sometimes it won’t…When shopping for apples, don’t buy lemons…you probably won’t be happy with the outcome.

It Takes a Community … Bullying Ends Here!

Community Nathan Lawrence 4 Nov

This past week, my team and I had the pleasure and opportunity to play host to Tad & “Bullying Ends Here” during his current three week tour across 4 different provinces.  During his two day visit to Thunder Bay, Tad did a total of 5 presentations (4 local high schools and then a smaller one for clients and business partners).  The 2 day visit was a huge success for so many different reasons!

Leading up to his time in Thunder Bay, we worked with the School Resources Officers from the Thunder Bay Police Service who helped me coordinate the presentations with 4 of our local high schools.  Prior to and during the presentations, our team met some amazing community leaders, business leaders, Police Officers, Principals, Teachers and other community youth resource team members. Speaking with them one on one, we were blown away by the challenges these leaders face every day and the incredible work they are doing to educate our youth, while at the same time doing everything they can to keep them safe from things like Bullying.

During his visit, Tad spoke with just over 1500 grade 9 & 10 students.   I have now heard Tad speak a total of 6 times and his message is remarkable, Tad’s talk is a wakeup call. However, for me the most impactful part of his visit wasn’t the speech itself, it was watching a group of high school students sitting together completely captivated by his message. My team and I had an opportunity to sit back and watch as brave students asked questions, personally walked up to Tad after the presentation to share with him how meaningful his presentation was and to share their stories about how they have been personally impacted by bullying.  We didn’t have to hear what the students were telling Tad, we could just tell from the look on their faces that his presentation had made a difference.

Throughout the two days, we received incredible feedback from the Principals, Teachers, Student Resource Police Officers with the Thunder Bay Police Service, business partners and community leaders.  Comments like…

“That was a hard message to hear, but one that all students should have the opportunity to listen to” and

“Tad’s messages about bullying is the best I have ever heard during my time as a teacher”

One of our local business leaders, a hotel operator, went as far as to offer Tad support for any visits that happen to take place in communities that they have hotels.

As a parent of a toddler, I do worry about what school life will be like for my son when he is finally old enough to go.  The work that Tad is doing is having an impact and I had the opportunity to witness it personally here in Thunder Bay.  Getting to know Tad personally this past week, I can say that he truly is a remarkable individual with a passion and a drive to make a difference.  With that said, there are countless community leaders right here in Thunder Bay that work every day to make our community a better place for families, friends, clients, co-workers, staff, and individuals that they have never even met in person.

Some of those local leaders jumped at the opportunity to help make Tad’s trip to Thunder Bay possible and I would like to express my sincere thanks to the following businesses, organizations and individuals:

  • Brianna Shortreed & Gina Winters – Lawrence Mortgage Team
  • The Valhalla Inn – for your support with Tad’s stay in Thunder Bay
  • Crystal Verescrak – Royal LePage Lannon Realty
  • Peter Marchl – NorMaxx Financial
  • Bruno’s Contracting
  • The School Resource Officers with the Thunder Bay Police Service
  • All of the Principals and Teachers at…
    • Superior CVI
    • Hammarskjold High School
    • Westgate High School, and
    • Patrick High School

Without their support and leadership, 1500 local students would not have had the opportunity to hear Tad speak.  Thank you all very much for everything you continue to do to make Thunder Bay a great place to call home.

For more information about Bully Ends Here and Tad’s story, please visit www.BullyingEndsHere.ca

Sincerely,

Nathan