Tips, Advice, and Explanations from a Vancouver Mortgage Broker  

Archive for the ‘Basic Mortgage Info’ Category

Bi Weekly Payments – How they Help – Explained by Rowan Smith a Vancouver Mortgage Broker

Tuesday, April 10th, 2012

Transcript of Video Blog:

Hi, everybody, it’s Rowan Smith with the Mortgage Center. I’m here to talk about biweekly payments and why they pay your mortgage down faster.

Now, I want to use a nice simple example to show you why this works, because it’s no magic and it has nothing to do with just making more frequent payments. You are, in fact, paying extra money when you pay a biweekly accelerated and you’re paying it down quickly.

So, here’s how it works. Let’s use a nice round number of 1,000 dollars. If that was your monthly mortgage payment, you would pay 12 times a year, you’d pay 12,000 dollars throughout the year. But if you were paying biweekly accelerated, they chop that payment in half.

So, 500 dollars times, times how many? Well, there’s 26 biweekly payments in the year. So, there’s not 24. People often confuse that, because they assume 12 months, 24 payments. There’s not. There’s 26 biweekly payments throughout the year.

It’s like when, if you’ve ever had a paycheck that comes in every 2 weeks, and then, twice a year, you’ll receive a paycheck, but you won’t have the corresponding obligations. It’s almost like found money. But it’s not. It’s just because the biweekly payments are 26 times throughout the year.

So, 26 times 500 is 13,000. So, like I said, on monthly, with 12,000. On biweekly, you’re at 13,000. So, you’re actually paying 1,000 dollars or one full extra payment per year. That has an effect of shaving several years off your mortgage. Depending on 25 or 30 years, it’s anywhere between 4 and 5 years that it knocks off right off the top.

So, if you want to pay it down a little bit quicker, accelerated, or biweekly accelerated, is the way to go. If you’d like that, and you know somebody else would like to pay down their mortgage faster, have them contact me.

This is Rowan Smith from the Mortgage Center.

What Makes a Broker Different Than The Bank – Vancouver Mortgage Broker

Thursday, March 22nd, 2012

Transcript of Video Blog:

Hi everyone. Rowan Smith from the Mortgage Centre. I want to talk today about what differentiates me, a broker, from just walking into your bank. If the only thing in the world you care about is rate then perhaps the bank is the best place for you to go. They may not have the best rate for you, though. I’m just saying that if that’s the only concern you can shop with them first.

However, there’s often many other things that we need to look at. We need to look at prepayment privileges. We need to look at can you get out of the mortgage if you need to? We need to look at how does that stack up against the competition in other financial institutions. We need to know if you’re going to live there for the next few years or if you need a line of credit as part of your package.

We need to know the sources of your income to know if you fit under specific programs that will get you additional discounts. We need to know a lot more information than just what is the best rate. There’s many questions that you can ask us as brokers and what is your very best rate while it is one of those questions it’s often not the most important.

I’m going to give you a case in point. Today I had a client come to me who had been chomping on a couple of different mortgage brokers and was getting pulled in a lot of different directions. When I looked at the situation I realized that many of the options that they were being offered didn’t even apply to them based on how they reported their income. I clarified the situation for them, had the deals packaged and arranged within a couple of hours, sent off to my lenders, and already received a response in the same day.

Now, I can’t promise a same day response every time. There’s just a number of factors that prevent that depending on individual deals. It is possible in a very clean situation. What I can do and the value I provide is not just a great rate, although I’m always going to try to get you the best rate, it’s also advice on the other elements of the mortgage and on your lifestyle. We, as mortgage brokers, are specialists on the debt side of the equation.

We’re looking out for your best interest in a fiduciary duty to try to get you the best terms, rate, and product to satisfy your needs. We’re not product salesmen. We don’t just sell the best rate like a canned product that we take off the shelf and hand to everybody. If everybody qualified for the best rate all the time they wouldn’t need us. There’s a lot of us out there for a reason and that’s because we can help provide an immense amount of value in selecting a good lender or getting a deal done in a timely fashion or under specific guidelines or times of day that your bankers can’t match.

If you or someone you know would like additional advice and would like an independent third party, which is what we are, to look at the situation please have them see me. It’s Rowan Smith from the Mortgage Centre.

35 and 40 Year Mortgages – Recent Updates

Friday, September 30th, 2011

In this video, I look at who is still offering 35 or 40 year amortizations and explain some recent changes in the market place.

Video Transcript:

Hi, everybody. It’s Rowan Smith from the Mortgage Center. It’s been a while since my last post and I wanted to provide an update on a couple of things that I get constant questions about in our market place.

Back in April when the changes the government handed down took effect it got rid of what most people thought would be all of the 35 and 40 year amortizations. So the question is, is a 35 or 40 year amortization still available? Short answer, yes. Now, the longer answer is a little more complicated… Read the rest of this entry »

Can I Roll My Other Debts Into My Mortgage?

Friday, February 18th, 2011

Transcript of Video Blog:

Hi everybody, it’s Rowan Smith with the Mortgage Centre. We’re going to do something a bit little different here this week. It’s where I’m going to answer one of the most common questions I receive, which is “Can I roll my other expenses into my mortgage?” So let’s look at exactly how that would go down. Read the rest of this entry »

A “Variable” Mortgage is NOT and “Open” Mortgage – There is a difference

Friday, February 18th, 2011

Transcript of Video Blog:

Hi, everybody. I want to address a very common myth, and that’s that people think their variable rate mortgage, because it is open to fluctuations, is in fact an open mortgage. That’s not the case. There’s a lot of confusion as to what is an open mortgage versus a variable mortgage versus a closed mortgage or a fixed mortgage. Read the rest of this entry »

Debt Servicing – How to Calculate It (Instructional)

Thursday, February 17th, 2011

Transcript of Video Blog:

Hi everybody, it’s Rowan Smith with The Mortgage Center. We’re going to try something a little different this week, and we’re going to cover something that’s very commonly requested of me, which is details on debt servicing, what is it, and how to calculate it. Read the rest of this entry »

Debt Servicing – Ratios – What Does it Mean?

Saturday, February 12th, 2011

Transcript of Video Blog:

Hi everyone, it’s Rowan Smith with the Mortgage Centre. I want to address one of the more common misunderstood elements of mortgage financing, and that’s debt servicing. And what percentage of your income is allowed to go towards mortgage payments, principal, interest, taxes, heat, or other debt payments. There’s two main ratios that we use in the mortgage industry gross debt service ratio, and the total debt service ratio. The gross debt service ratio looks at your gross income and says what percentage of your gross income is being used by your mortgage payments, your principal and interest, taxes, and heat.

Read the rest of this entry »

Mythbusting Mortgages 3 – My Bank Will Finance a Former Grow Op!

Friday, January 14th, 2011

Transcript of Video Blog:

Hey everyone! Rowan Smith at the Mortgage Centre. This week we’re doing Myth busting No. 3. This week’s myth is the old: “My bank did a former grow op property for me before so they will again.” That’s not necessarily the case. The industry hasn’t had this problem for that many years, at least not that they’ve been aware of. Properties now being branded as a former grow op in the property condition disclosure statement or in some places even on title has caused lenders to re think how their lending policies are when it comes to former grow ops. They don’t even say why, but what’s changed?

Read the rest of this entry »

Mythbusting Mortgages 2 – 35% Down? Who Needs a Job?

Tuesday, January 11th, 2011

Transcript of Video Blog:

Hi everybody! It’s Rowan Smith with the Mortgage Centre. We’re doing Myth busting #2 here and another one I want to address is the myth that if you have 35% down you don’t even need a job. That is patently incorrect!

Read the rest of this entry »

Mythbusting Mortgages 1 – I Don’t Have to Prove Income

Friday, January 7th, 2011

Transcript of Video Blog:

Hi everybody! Rowan Smith with the Mortgage Centre. We’re doing a Myth-busting series here. I’m going to do a 10 part series that I’m going to release over the following weeks. So, I’m just going to address a number of different myths within finance and real estate.

Read the rest of this entry »