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Fixed or variable? Revisiting the debate amid low rates

Courtesy of The Globe and Mail (Print Edition) For many consumers, the comfort of a fixed payment is worth the slightly higher interest costs, experts say Mortgage shoppers looking for the best rates this fall are also asking whether it’s best to go fixed or variable in the continued low interest-rate environment brought on by the economic fallout from the COVID-19 crisis. While rates that fluctuate with the market interest rate tend to win over those that are fixed for the duration of the mortgage term, experts say there’s no onesize-fits-all answer. “This topic is very personalized to each person’s own unique situation,” says Tracy Valko, principal mortgage broker and owner of Valko Financial Ltd. in Kitchener, Ont. “Mortgage products need to meet the needs of the client and what’s best suitedfor them.”     Ms. Valko, who is secretary of Mortgage Professionals Canada, an industry association of mortgage brokers, …
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Payday Loans – The First Step into Perpetual Debt

From the desk of Matthew Shantz: Many years ago, during a different time in my life, I found myself facing a cash shortfall. I literally had the change in my pockets to get me through to my next pay day. Credit Cards were maxed, Bank Account was in Overdraft and my cupboards had a few boxes of pasta and my fridge some nearly expired milk. I wasn’t sure how I was going to pay my rent – living in Toronto, that rent was not cheap – let alone how I was going to keep myself fed. So, I did what everyone does in that situation, and look for a quick source of money without having to share my plights and desperation with family or friends. I was ashamed and embarrassed and did not want to share that I had gotten myself into that situation. I worked full time and had …
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Houses rising

Why Are Mortgage Rates Rising?

Over the past month, the Bank of Canada has lowered its overnight rate by a whopping 1.5 percentage points to a mere 0.25%. Many people expected mortgage rates to fall equivalently. The banks have reduced prime rates by the full 150 basis points (bps). But, since the second Bank of Canada rate cut on March 13, banks and other lenders have hiked mortgage rates for fixed- and variable-rate loans. That’s not what happens typically when the Bank cuts its overnight rate. But these are extraordinary times. The Covid-19 pandemic has disrupted everything, shutting down the entire global economy and damaging business and consumer confidence. No one knows when it will end. This degree of uncertainty and the risk to our health is profoundly unnerving.   Most businesses have ground to a halt, so unemployment has surged. Hourly workers and many of the self-employed have found themselves with no income for an …
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Extraordinary Coordinated Policy Actions To Ease the Economic Impact of Pandemic In Canada

Prime Minister Justin Trudeau said Canada would introduce a “significant” fiscal stimulus package, as part of a coordinated effort with other Group of Seven countries to counter the virus-driven global economic slowdown and calm markets. In an exceptional press conference held at 2 pm today, Finance Minister Morneau sat at the side of the Governor of the Bank of Canada, and the head of the Office of the Superintendent of Financial Institutions (OSFI) to announce measures to soothe financial markets, boost confidence and support the Canadian economy. Only nine days after the Bank of Canada cut the overnight policy rate by 50 basis points to 1.25%, Governor Poloz announced another 50 bps reduction in the policy rate to a level of 0.75%. Here is the Bank of Canada’s official statement: “The Bank of Canada today lowered its target for the overnight rate by 50 basis points to ¾%. The Bank Rate is correspondingly …
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First-Time Home Buyers Incentive Program!

The new First-Time Home Buyers Incentive allows eligible first-time homebuyers, who have the minimum downpayment for an insured mortgage, to apply to finanace a portion of their home purchase through a form of shared equity mortgage with the Government of Canada. Lower monthly mortgage payments Interest-free incentive program No pre-payment penalty Newly constructed homes eligible for 5% or 10% Exisiting homes eligible for 5%   Ready to get started? Contact us today

Income Properties – 570 News Ask The Experts, August 11, 2018

Check out Tracy and Marina’s interview with Dave Callender, focusing on flipping properties, rental homes and what it takes to finance these investments. A special thank you to EMpression: A Marketing Services Company for providing this image.  

Do you need a financing condition?

by Sandra Rohfrietsch   Let’s talk about financing conditions. The financing condition is a challenge for everyone purchasing in today’s market.  Everyone wants their offer to be the most attractive, especially when the market that has yet to slow down.  What you may not know, is that there can be some significant factors why your Mortgage Broker or Financial Advisor is pushing you to keep that financing condition in place; they have your protection in mind.  We’re going to look at three main reasons why your financing condition is important: Property – There may be something about the property that you or even your Realtor are unaware of.  Lenders and mortgage insurers (Canada Mortgage Housing Corporation or Genworth Canada) have access to details and information that can make or break the approval.  For example, if the property is built on land in a flood risk zone, or the condo board …
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What are the different types of lenders?

One of the biggest aspects of a mortgage is figuring out the best lender. Since every file is unique, a good mortgage broker will likely tell you there’s no “best” lender. Instead, it will be those unique qualities in your mortgage that will determine which lender you’re going to use. In a typical mortgage, there are three potential types of lenders: the big banks, credit unions and monolines. A Bank A bank is a financial institution that accepts deposits, lends money and transfers funds. They are listed as public, licensed corporations and have declared earnings that are paid to stockholders. A key point: they are regulated by the federal government-Office of the Superintendent of Financial Institutions. Everyone knows the big banks and they are considered to be trusted. If you decide to use a fixed-rate mortgage from a big bank, keep in mind the penalty to break the mortgage will …
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Flex Down Mortgages

  A flex down down payment isn’t your typical mortgage scenario. Let’s say you have the credit score and income to buy an additional property but you haven’t managed to save up the down payment.  You may choose to borrow money from a third party or somebody may even gift it to you.  Not every lender will just accept that as payment.  You’ll need a flex down mortgage program and it’s something you really need to talk about with your mortgage broker.  It may even be possible to pull the down payment from a secured line of credit but paying back that money will be considered like any other bill payment on your application. Keep in mind that flex down mortgage programs will also typically require you to put in some of your own money or put down 25% or more.  Flex down programs have better interest rates than you …
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Credit Scores

Your credit score is a big factor when you apply for a mortgage.  It can dictate how good your interest rate will be and the type of mortgage you qualify for. We’re experienced helping clients with a wide range of credit scores so we can find you a mortgage product even if your credit is far from perfect. The good news about your credit score is that it can be improved: Stop looking for more credit.  If you’re frequently seeking credit that can affect your score as can the size of the balances you carry. Every time you apply for credit there is a hard credit check.  It is particularly important that you not apply for a credit card in the six months leading up to your mortgage application.  These credit checks may stay on your file for up to three years. If your credit card is maxed out all …
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