Watch out for the wolves!

I was meeting with my business development manager for Canadian Home Income Plan (CHIP) about their reverse mortgage product today, and he shared with me an experience with a client of his bank that is at once shocking but also, unfortunately, not uncommon.

There is a private mortgage lender who advertises on the radio that did a mortgage for a client who was terminal with cancer.  The mortgage amount was $500,000.  Do you know how much the fees were?  $65,000!  That is insane!  CHIP was able to take care of him in a way that he could enjoy his remaining days with his family in comfort, and provided a much more fair solution, but that is not really the point of the story.  It is technically legal to charge those kinds of fees, but it does not make it fair, equitable or correct.

Quite often, I am writing things that are not so positive about the chartered banks in this country, and I feel quite justified in my assessment.  However, there are wolves everywhere.  It is companies like this one, and stories like this one, that tarnish the reputations of all mortgage brokers.  Whether the institution has a bank license or a broker license, it really just matters who you can trust.  Having an honest person you can trust, who cares and works hard for you is worth their weight in gold.

Its also a difficult quality to prove and quantify without experience.  One way I try to provide a greater level of accountability is by maintaining our BBB membership, with whom we have an A+ rating.  I also typically do not promise or guarantee anything with my clients.  I simply tell my clients that I will do my best.  Some people appreciate that honesty, and many others love slick salespeople saying “no problem, I will get you the approval.”  Sometimes, if an approval seems straight forward, I might be able to speak with more confidence, but there are other things that can go wrong with even the strongest clients.  There is no guarantees in this industry, and if you talk to someone that comes across slick and smooth and says “no problem” to you, be careful.  You are likely speaking with another wolf.

Other wolves can include companies that quote a wonderful rate online, but will rarely deliver that to you.  I put my rates online, but I put ones that I can realistically offer.  I cannot guarantee that if you call me that I can get you that rate, but if your mortgage application is strong and straight-forward, the chances are pretty good.  Many of these other companies will put a rate on to get you to call, and then sell you on a higher rate.

I hope that you will give me a call and give me a chance to take care of your financing needs.  I would love to demonstrate my quality to you.

BC Property Transfer Tax

New property transfer tax changes affect BC home buyers

The latest BC government budget announced changes in how the property transfer tax is charged.  Here is a summary of the changes:

  • -The property transfer tax will remain the same until the purchase price exceeds $2 million.  Currently, the tax rates are 1% of the first $200,000 and 2% of every dollar above $200,000.  Now, at the $2 million threshold, the rate will be 3% of every dollar over $2 million.
  • -There is a new program for Canadian citizens and permanent residents purchasing a new home with a value of less than $750,000.
  • -The first-time homebuyers program remains unchanged with a full exemption up to $475,000 and a partial exemption up to $500,000.

What impact will this have on the real estate market?

Virtually none.  Those buying new homes will save some money.  Those buying homes for more than $2 million will have to pay slightly more, but it will surely not affect their ability to buy the home that they want.