Wednesday 15 October 2014

Mortgage News

Mortgage News


by Darrin DeRoches
September 18 - 24, 2014
It’s a busy time of the year for the real estate market and mortgage brokers and banks are hustling and bustling.  I recently spoke with a few mortgage specialists and a few comments got me thinking.  I was surprised to hear people are still shopping around their deals.  Of course you want the best rate out there even though the rates are so low — why not get the best.  Sometimes it does not come down to the rate — it comes down to service.

    It is really easy to go online and email several brokers looking for the lowest rate.  Sometimes you might save a few bucks and you might even believe you got the best deal but you may be sadly mistaken.  Personal service and creative ways to structure a deal can not only make or break a deal it can save you tons of money. An example of this is a person was bought a new house and went in firm with no conditions even though they had to sell their house to make the deal work. Weeks pass and their house does not sell. Six days to closing they call the bank and inform them about the deal and say that they need money to buy the new house. The bank had spoken with them two months ago and laid out a plan but they figured it would all work out and ignored the plan from the bank.  Luckily they have enough equity in their home they can arrange a short term mortgage with a line of credit and virtually “bridge” the two mortgages. Sounds good and they can move forward. The problem is that is comes with higher rates, costs and fees and will end up costing about five thousand dollars. Had they kept the personal contact with the broker, and not shopped around, he would have been able to set a line of credit for a new mortgage at a low rate and save them thousands and thousands of dollars today plus more in the future.

    People have to realize that some banks can do things others cannot and that some brokers will do some things others will not. A client of mine was told they are approved for half a million but only spent $400,000 but the broker could not “bridge” finance. This seemed a little out of sorts to me so when I presented it to their bank they were approved for a bridge mortgage in hours. Fortunately we did not need the bridge and their house sold in the first week but if we did need it and listened to the broker they may have lost their dream home.

    Work with those who work with the right people and you will not only get the best rates you can make deals others cannot.  When it comes to money — stop shopping on line — renew or create your relationships with lenders and brokers.  A great real estate broker knows when to call bullshit and help you find the right bank or broker!   V

    Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

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