Watch out for the wolves!

Jeff Evans

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.

Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

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I have recently completed an e-book and will be launching it soon.  I believe it will be very helpful for not just first-time home buyers, but for anyone who is not as knowledgeable in residential mortgage lending, about how to make your home buyer mortgage broker application appealing to a mortgage lender.

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  2. Make sure you pay your bills on time. If you have a high balance on your loan, or you have a lot of debt, those also have a significant negative impact on your credit score, but you can get the bills down and there is no record of your high debt levels.  However, when you miss a bill payment, it stays on your credit bureau for 6-7 YEARS.  This not just negatively impacts your credit score, but lenders look at this when assessing risk, and they have been particularly uncompromising and (unreasonable, paranoid, strict...and other words that I cannot put in print) in the last few years.  While you likely do not have to wait 6-7 years to become bankable if you have had gone through a period of bad credit, the less negative credit on the bureau, the better. At least make the minimum required payments and you will go a long way to making yourself appealing to them.
  3. Having no credit is just as bad as having bad credit. Many people feel that not requiring credit should prove your ability to pay your bills and should be good evidence of credit-worthiness.  This is not how mortgage lenders think.  If you currently do not have any credit, then you do not have any documentation that you are an acceptable credit risk, and no matter how strong your income is, you will have difficulty obtaining a prime mortgage approval.  Make sure you have at least 3 different credit facilities in your name.  (Secondary credit cards in a spouses name are not considered acceptable for establishing your credit).

I am excited to launch my home buyer mortgage broker e-book soon, in which I go into much greater detail and give many different ideas to help home buyers prepare for home ownership, but as a mortgage broker in Vancouver, you are welcome to contact me in the meantime to discuss your circumstances and see if there are any options for you.

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