Why You Should Use a Mortgage Broker

Hey everyone! Lori Lalonde here, your Northern BC Mortgage Broker, with my second blog post in as many days. I don’t usually do more than one a week, but I just got a phone call that made me realize how important these regular updates are. My goal in writing them, of course, is to give Canadians a better understanding of the mortgage market – because as I’ve often said and truly believe, the best consumer is an informed consumer. That said, it’s unreasonable to expect Canadians to have a full, complete understanding of the mortgage industry (considering that not only is it pretty complicated, but it’s also always changing). So really, for as much as I want my readers to learn something from every post, I also want them (you!) to understand that it’s not realistic to learn everything on their (your!) own.

That’s where I come in. And yes, I’ve said that a few time before, but it’s true – my job as a mortgage broker, by definition, is to make getting a mortgage as easy as possible for you. It’s a job I love to do, and it’s a job that’s more necessary than ever. As far as I’m concerned, 100% of people applying for a mortgage should do so through a mortgage broker (though as my last post mentioned, the real statistic is drastically lower).

Now, I know what you’re thinking: of course I want everybody to use a mortgage broker, because as a mortgage broker, I stand to gain from that. And sure, I always appreciate getting new business, but this post isn’t meant as an ad. In fact, I’ll go so far as to say that you should always use a mortgage broker even if it isn’t me – the important thing is that whoever you go with has an in-depth understanding of the mortgage industry. No matter how much you know personally, no matter how many of my blog posts you read, it won’t be enough – but a good mortgage broker will always be an expert in the latest products and policies.

As a matter of fact, I’m in Vancouver right now participating in information sessions with a wide variety of lenders (including TD Bank), for the sole purpose of keeping up to date with changes in the industry. I’m always learning in this job, because if I’m not, I wouldn’t be doing justice to my clients. That’s the single most important quality of a mortgage broker, and it’s why I recommend you use one (even if it isn’t me!) whenever you apply for a mortgage. Yes, it’s a given that I can get you the very best rate, but it’s my knowledge and service that makes me absolutely invaluable. And most importantly – and I’m putting this next part in all caps – MY SERVICES DON’T COST YOU A DIME. Sorry to yell, but this is the reason I can’t understand why so few Canadians use a mortgage broker. We have access to the latest knowledge and the best rates and we don’t charge a thing – why would you not use a broker?

Now at the start of this post, I mentioned getting a phone call that prompted me to write it. It’s the same call I get several times a week, from a potential client who’s been misinformed by their bank, but this one just pushed me over the edge. I can’t tell you how many times I’ve picked up clients simply because they’ve been promised something by the bank (or indeed, another mortgage broker) that just hasn’t been delivered. I’m not complaining – again, I like getting new business – but it just frustrates me to see people wasting their time when I can help them out so easily… and for free! That’s really what this post is all about, and I just can’t stress it enough: if you’re thinking about getting a mortgage, always consult a mortgage broker first. It’s that simple. I’d love it if that broker were me, but if it’s not, then consult someone else. Think of it like going to get your teeth cleaned: if you’re willing to pay a dentist to do a better job of something than you could do yourself, then wouldn’t you be willing to not pay a mortgage broker to get a better mortgage for you?

This post has run a little long (I had to make up for being brief last time, I suppose), but I hope that just supports how serious I am. To be as blunt as possible, call a mortgage broker. Just do it. And if you’re looking for a good one in Northern BC, my number is (250)-782-9665.

I can promise you won’t regret it.

Lori Lalonde, Your Northern BC Mortgage Broker

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Spring 2015 – A Profile of Home Buying in Canada

Hey everybody! It’s been a big week for mortgages on my end but not a huge week for mortgage news everywhere else, so I’m gonna do something I rarely get to do on this blog: be brief. Perhaps this introduction isn’t the best example of that, but I mean it! Today’s post will just be a quick, informal update so we can all be as on top of things as possible. Let’s jump right in to it!

From Robert McLister over at CanadianMortgageTrends.com comes this excellent rundown of CAAMP’s 2015 Spring Mortgage Report, which, in that report’s own words, is “A Profile of Home Buying in Canada.” Now the CAAMP, for those who may not know, is the Canadian Association of Accredited Mortgage Professionals – so they’re a pretty big deal in the industry. And Robert McLister, who I use fairly often as a source, is a mortgage columnist for The Globe and Mail – so he knows what he’s talking about too. With those credentials on the table, you can be pretty confident in the following “gauge [of] the pulse of the market:”

  • 45% of home buyers are first-time buyers.
  • 51% of Canadians with mortgages choose a 5-year fixed mortgage. This is probably a good time to remind you all of my 2.59% 5-year fixed rate.
  • 34% of mortgages were from mortgage brokers.
  • 39% of first-time home buyers use a mortgage broker – more than any other segment of home buyers.
  • The percentage of overall home buyers drawn in by low interest rates is 18%. This is another good time to remind you all of my 2.59% rate!
  • The average interest rate for homes purchased so far in 2015 is 2.68% (which McLister puts down at least partly to “the fact that some folks don’t shop rates as much as they could”). In case you hadn’t heard, I have a pretty nice 2.59% rate you can try shopping around…

In keeping in line with one of my recent posts (about the importance of low interest rates), I’ll also include this direct quote from the CAAMP’s report: “…a statistical analysis shows that reductions in interest rates in Canada tend to reduce the rate of mortgage credit growth…” Robert McLister explains what should really be common sense: “…very low levels of interest rates mean that Canadians are paying less interest and have more money available to repay their mortgage principal.”

And that’s it! As promised, I wanted to keep things quick today, so let me just finish by saying that if you have any questions about the CAAMP’s report (or if you just want to know more about it), you can call me for FREE at (250)-782-9665. As a matter of fact, that FREE part applies to all my mortgage services – whenever and wherever you need them. If you’re reading this on your phone, all you have to do is tap my number! And if you’re on a computer, here’s an email address for equal ease of access: lori.lalonde@verico.ca. Since you now have no excuse not to contact me, I hope to hear from you all soon!

Lori Lalonde, Your Northern BC Mortgage Broker

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How the Banks Turn a Profit in a Tough Economy, Part 2 (Hint: it’s the Same as Last Time)

Hey everybody! I’d like to start today’s post by thanking each and every one of my readers, regular or not. That means you! Yes, you! Give yourself a pat on the back for me. When I started regularly keeping this blog back in January, I wasn’t sure what kind of response it would get – but it seems to be helping quite a few people with their mortgages, and that’s exactly what I was going for. In fact, that’s what I go for every day as a mortgage broker… it’s literally my entire job! I’m pumped that the internet allows me to be even more useful to you guys, but remember, my services don’t stop here: you can call me any time for any reason, and if that reason has to do with mortgages, I can give you all the free advice you could ever want. If that reason has to do with something other than mortgages… well, I’ll give that my best shot too! I live to serve!

So remember, my number is (250)-782-9665. Call me! I’ll wait.

Okay, so I assume you’ve called me by now, and it was really great talking to you! That said, you’re probably hungry for even more mortgage advice, so here’s today’s blog topic: The Big 6 Banks and their earnings for Quarter Two of 2015. Fuller details on this can be found right here, and while Canadian Mortgage Trends does a good job of highlighting the relevant data, I’m gonna make it even more concise for you guys: the banks make a lot of money on mortgages.

And I mean a lot. The Big 6 earned $8.04 billion this quarter, an increase of more than 30% from last year. While not all of that is from mortgages, obviously, the rising profit margins on those is a pretty significant factor. Those rising profit margins, remember, come from “the banks pocketing 10 basis points from the Bank of Canada’s 1/4 point rate cut in January,” as Robert McLister puts it (I wrote a blog post of my own about that, which you can find right here). On top of that, the residential mortgage portfolio for 5 of the Big 6 Banks rose this quarter – and the majority of those mortgages are fixed, which, according to Scotiabank’s Anatol von Hahn, is “very attractive from a margin point of view.” If you’re interested, you can read all about how those mortgage portfolios rose for the banks in Quarter One as well, right here in my last blog post about it.

So the banks are making a lot of money on (mainly) fixed mortgages. Good for them, right? What’s the big deal?

The big deal is that there are lots of other, better options for Canadians. As Rob Carrick at the Globe and Mail put it a couple months ago, “the big banks are masterly in how they attract attention to their mortgage rate cuts.” They draw people in with big promises and good-looking rates, which “look like bold mortgage moves to the uninformed… by creating an illusion of daring competitiveness, the banks keep customers coming back.” Then they hit you with penalties and restrictive terms that keep their profit margins high enough to swell their earnings quarter after quarter. It may even be that a mortgage with one of the big banks is the right way to go, but you can’t know that for sure without examining all your other options. And the best, easiest way to do that is to consult a mortgage broker (and remember, we don’t even charge you anything)! As Carrick puts it: “You may still end up doing business with your bank, but failing to at least consult a broker is borderline personal-finance negligence.” Naturally, as a mortgage broker, I agree with him. But more importantly, I agree with him as a Canadian – because the more money we all keep in our pockets, the better the economy is for everybody. So please, for all our sake, make sure you find yourself the right mortgage.

That’s all I have to say for today, but before I sign off, I want to remind everyone that we’re hiring mortgage professionals in Fort St. John! If you or anyone you know might be interested, feel free to send in a resume or give me a call! That number again is (250)-782-9665!

Lori Lalonde, Your Northern BC Mortgage Broker

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