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Is your Mortgage up for Renewal this Year?

Posted on by Team Vertuity

Here are some tips to ensure the process goes smoothly and you get the best rate available(that suits your own financial situation).

 

Start Early: We have a system that reminds clients 6 months, 3 months and 1 month in advance via email about an upcoming renewal. We also try to followup with a phone call in case the email is lost. Even with that in place we are see people wait until the last minute to contact us. By starting to talk about things 6+ months out we can ensure you will get the lowest rate available as many lenders will allow us to ‘lock-in’ a rate 120 days at a time. Since COVID, most lenders are understaffed so a renewal can normally take 4 weeks from start to finish, sometimes longer! There are ways we can help clients at the last minute but it may mean taking an OPEN term with your current lender at a higher rate which can be unnecessary. Start Early and Save More!

 

Fixed vs Variable: In our history in the mortgage business we have never seen the BoC increase rates the way they have over the last year. This means Variable and Short term rates are actually HIGHER than Long Term rates. The thinking is rates will come down in the near future, but keep in mind by taking a Variable right now you are paying a premium to ‘bet’ that rates will come down vs locking into a longer term(3/4/5yr) rate that is some times up to 1% lower. While rates may come down and this theory could work out, Variable rates may not be the best option right now. For some clients the standard 5yr fixed still provides security and comfort in knowing what payment you will have for the future, while also being the LOWEST rate currently available. However, for clients looking at shorter terms we are seeing some good options on 3yrs which will give some security but also not lock a borrower in for too long. A 5 minute conversation can give you a snapshot on what the market is doing and the best options available.

 

Is it worth it to change lenders?: We start the renewal process with an update of your financial scenario and then can provide mortgage rate options via a quick phone call or email. We then compare what your current lender can/has offered with what is available elsewhere to decide if it’s worth taking the next step. While every scenario is unique, we usually like to see a 25bps/.25% savings to ensure your time spent transferring to a new lender results in $$$ back into your pocket. Should your current lender match/come close to the rates offered in the market, simply renew with them knowing you have the best rate available and are keeping money in your families pocket. A few minutes is all it takes to ensure your new mortgage is fair and competitive.

 

Banks are sneaky: We are always being asked by clients if they should renew early? The Banks like to call clients 6-12 months in advance right now and claim they will do you a ‘favor’ and lock you early before rates increase. Don’t fall for this trick! Most people will be in a much lower rate currently than what you can obtain today, so by locking in early you lose the old lower rate and start sooner with a new higher rate. If it’s happened to you, learn from it for the next time your mortgage renews. Make sure you contact Vertuity and use our simplified process to ensure you get the best rate available for your future renewal while keeping your low current rate as long as possible. AND, if you know of anyone who hasn’t used us before, feel free to pass on our contact info. We would be happy to help any of our clients friends and relatives with their mortgage needs!

 

Call us at 204.888.4663 or Email [email protected]

Mortgage Broker vs Banks?

Posted on by Team Vertuity

An interesting article from the Toronto Star this past week talking about the benefits of working with a Mortgage broker or a bank.

https://www.thestar.com/life/advice/2018/07/31/mortgage-brokers-vs-banks-the-pros-and-cons.html

As a mortgage brokerage we are a bit biased in that our service is a good one and many of our clients in Winnipeg feel the same way.

We are constantly asked what is better fixed or variable and our answer is that everyones situation is different.  While one family may like the peace of mind a fixed rate offers another may find the premium paid for that security too much and opt for the lower variable rate instead.  And they both made the right answer because it was one that was best for their own situation.

The same applies for the Broker vs Bank debate.  If you are happy with the service you are getting from your bank or Credit Union and are confident their rate/product is competitive and fits your needs then you are likely making a choice that works for you.  If you would like a variety of options and rate, whether its to ensure you have a good offer from your current lender or you are looking to have a mortgage somewhere else a broker can help.  If unbiased opinions from someone who is not an employee of the lender then a broker would be a good fit. With either decision you make it comes down to what who are most comfortable with and what option works best for you.  And if you keep that in mind when you are deciding on a provider for your next mortgage you should be fine!

Big Banks Defending Sales Practices

Posted on by Team Vertuity

With Canada’s big banks defending sales practices at nearly every public forum, a new scandal may be just around the corner.

In the last several weeks, several articles have been printed about the big banks forcing employees to mislead or even directly lie to their customers to increase sales. The articles have struck a chord and it’s forced Canada’s big banks to defend their sales practices. No one wants to see a repeat of the Wells Fargo scandal in 2016. The U.S. bank publicly apologized and paid large penalties after it opened millions of unauthorized accounts and credit cards on behalf of clients.

At annual general meetings with shareholders in the past ten days, the CEOs of TD, BMO and Scotiabank all downplayed the reports of slimy sales tactics.

Scotiabank Chief Executive Brian Porter told shareholders at the bank’s annual meeting on April 4, 2017 he believed the bank’s sales practices were “very sound”. Porter said that out of 400 million interactions between the bank’s clients and employees, Scotiabank received eight complaints about sales practices last year.

TD Bank CEO Bharat Masrani on March 30, 2017 at the bank’s annual shareholder meeting said the company has enlisted the help of an outside company to review its business practices because of the reports.

Speaking at the Bank of Montreal’s annual meeting on April 4, 2017, Bank of Montreal CEO Bill Downe said the bank has “rigorous disciplines” in place to make sure that top-level executives are aware of what’s happening on the sales floor.

With pressure about illegal sales tactics at the big banks building, The Financial Consumer Agency of Canada (FCAC) stepped into the fray.  In February, 2017 the FCAC released the letter “B-5 Consent for new products or services.” In the letter, the FCAC reinforced its expectations about consumer consent.  The letter stated, “Institutions must ensure any communication (verbal, written or electronic) with consumers that forms part of the interaction for seeking express consent is clear, simple and not misleading.

The big banks will need to keep defending their sales practices.

At Vertuity Mortgage, we hear the stories about the big banks all the time.  Wanting to be the best choice, we encourage prospects to talk with other mortgage companies to ensure they are making the best decision for them.  Inevitably, prospects visit the big banks.  In addition to limited choices, the prospects often come back to us with stories of high pressure selling tactics.

We don’t need to defend ourselves.  We don’t use high pressure sales tactics and we don’t pressure people into anything.  We discuss our customer service process early and openly. Our “Hassle Free Process” walks our clients easily through the process of getting the right mortgage.  Because of our buying power, we are able to obtain lender’s rock bottom lowest interest rates upfront without any need for negotiating.

We don’t need to pressure people into working with us.  We work hard at finding the right mortgage for our clients.

We’ve spent the last 15 years in Winnipeg helping people all across Canada with their mortgage financing needs. Unlike the big banks, we will give you honest advice and recommend the best product to fit your needs. We will have your best interest in mind and find a solution that suits you and your family at this time in your lives.

We’ll continue to watch the big banks defending their sales practices while we work hard getting the right mortgage every day for our clients.

Why Refinance your Mortgage?

Posted on by Team Vertuity

In the strictest sense, to refinance your mortgage means replacing your current mortgage with another mortgage. In practice, this means that you’ll have to conduct research to reveal your options, compare your current mortgage with your options, and then submit to the standard process used to secure a mortgage if you feel that refinancing is in your best interests.

Reasons to Refinance your Mortgage

Generally, you refinance your mortgage because your new mortgage comes with new interest rates and other borrowing conditions, which can provide you with a more manageable outstanding balance. However, there are also other important benefits to refinancing your mortgage, though not all of them will appeal to all of mortgage-holders out there.

Here are some of the most popular answers to the question of why refinance your mortgage:

  1. One of the most popular reasons to refinance mortgage is the continuous change in interest rates over time. For example, interest rates plummeted in the course of the Great Depression. Someone who had taken out a mortgage prior to the collapse of the real estate market would have been stuck with the high interest rates, unless said individual could refinance his or her mortgage.
  2. Of course, refinancing your mortgage means that you might also be able to secure better borrowing conditions other than lower interest rates. For example, if you find that your current monthly payment is too onerous, then you may be able to secure a smaller monthly payment in exchange for a longer term. Alternatively, you may choose to reduce the overall cost of your home by shortening your term so as to pay less interest.
  3. If you are in need of cash with which to start a business, eliminate outstanding bills, or cover some other costs, then refinancing your mortgage can be one of the best solutions out there. This is particularly true if you’ve had your current mortgage for some time, since that means you’ll have more equity built up in your home.
  4. Managing more than one debt obligation can prove to be a bit of a hassle, which is why some people refinance their mortgages with the intention of consolidating their debts. In short, you refinance your mortgage to get cash, which you then use to pay down your other debt obligations. Using this method, you’ll only need to make the payments on your new mortgage going forward, which can save you both time and frustration.

Refinance Your Mortgage

Of course, refinancing your mortgage has its costs. For example, most mortgages have early repayment fees, which can cancel out the financial benefits of securing lower interest rates. Ultimately, the question of why refinance your mortgage is something that only you can answer, as you are the person best placed to understand your personal needs and priorities. However, never forget that speaking with the experts at Vertuity Mortgage can help you both understand mortgages better and clarify your personal priorities.

How Does Mortgage Renewal Work?

Posted on by Team Vertuity

At Vertuity Mortgage, one of the most common questions that we hear from our clients is how the mortgage renewal process works. Simply put, whether your mortgage comes up for renewal in 35 months or 10 years, the renewal process provides you with an opportunity to re-evaluate your personal financial situation and mortgage needs before you decide on a new mortgage product.

Leading up to your mortgage renewal, you will receive a notice in the mail from Vertuity Mortgage to notify you that your mortgage is coming due. One reason why our mortgage brokerage firm is so attractive to our clients is that we have the ability to lock the interest rate for your renewal as early as 4 months out (120 days), which is something that many financial institutions are not able to offer to their clients. By offering a 120 day rate guarantee, we are really able to set ourselves apart from others in the industry and provide our clients with peace of mind during the renewal process.

During your renewal period, you have a chance to renegotiate your interest rate and term for your mortgage. Being a mortgage broker, one of the things about Vertuity Mortgage that makes us unique is that we will shop your renewal to over 20 lenders that will all put their most aggressive offers together in an attempt to win your business. If you decide to transfer your mortgage to a new lender during this renewal period, it will not cost you anything as the new lender will cover all of the costs to transfer the mortgage.

If you are considering purchasing a new home and are trying to weigh the pros and cons of the various mortgage options available to you, it is important that you understand how themortgage renewal process works before determining a maturity for your mortgage.

Mortgage interest rates are priced based on risk, so typically the longer the term of your mortgage, the higher the interest rate will be. Mortgage rates in Canada still continue to be at historic lows, meaning that if you lock in on a mortgage with a shorter term, you are likely to receive a rate that is more favorable. The longer you extend the maturity of your loan, the higher your interest rate will be as banks price based on interest rate risk. When your mortgage comes up for renewal, you will renegotiate your terms based on interest rates at that time.

If you have a low risk tolerance, you may want to consider opting for a mortgage with a longer term as today’s low interest rates still make longer mortgage terms very appealing and affordable to clients.

All in all, if you have a mortgage renewal coming up, consider it a great opportunity to re-evaluate your financial picture and get a loan structure that will best suit your needs. By shopping the lending market and handling the negotiations for you, our team at Vertuity Mortgage helps to make the mortgage renewal process incredibly easy for our clients.

Please contact us to learn more about how the renewal process works and the current options available to you.