Debt Got You Down?

General Donna Thornton 23 Feb

We are all friends here, amirite? Honesty is the best policy, right? Great!

COVID is hard. The price of gas is insane. The cost of groceries…NUTS.

But do you know what’s worse? Debt.

Between the cost of living, mortgage and credit card debt, and life in general, people are struggling. The Bank of Canada has all but said that we should expect a rate increase when they meet again on March 2, 2022.  What should you do?

Simple!

If you’re a homeowner, you should reach out to me ASAP to come up with a plan to start saving you money now. But you’re not going to call me, are you?  Nope.

There are usually 3 reasons people don’t call me when they are in trouble. They are:

  1. They want to go to the Bank. Brokers scare them (for more on that read THIS ARTICLE).
  2. They are embarrassed.
  3. They think they are beyond help.

Guys!

If I were to show you a plan where you could free up hundreds of dollars a month would it be worth a phone call? I think so.

If I offered you a judgement free zone where we can lay all of your cards on the table would it be worth an email? I think so.

What’s the worst thing that can happen after meeting with me? We come up with a plan. A plan to get you back on track. Would that be worth it? I think so.

Here’s the thing. Debt is a part of your story. It is not who you are, and it does not define you. We’ve all made mistakes and gotten into financial trouble. You know what they say: the comeback is always stronger than the setback. I have helped hundreds of families get back on track, and I want to help you, too!

If you’re struggling and want someone to help come up with a plan, call me. Today. Every day that you struggle is a day too long.

Your Mortgage Pal,

 

Donna

Is your car costing you your house?

General Donna Thornton 17 Feb

With the cost of houses ever increasing, getting into the real estate market seems to be a struggle for first time homebuyers.

Here are some fun facts:

The average price of a home in Hamilton in 2022 is $976,423 up from $721,178 in 2021. (For more details CLICK HERE).

The average salary in Ontario is $134,000 (ACCORDING TO SALARY EXPLORER).

Quick math tells me that the average person cannot qualify for an average home in Hamilton. Let’s not even LOOK at prices in Burlington ($1,369,337, because – curiosity).

After speaking to a few Realtors, I’ve learned that most first time homebuyers are couples with double incomes and flexible jobs. Many of those buyers do not have kids and most are using savings for their down payments. Depending on who I speak with, these buyers are between 30 and 35 years old.

When we are calculating how much a client can afford to spend on a home, we must look at their liabilities. Student loans, lines of credit, credit cards, and car payments all affect how much mortgage you can qualify for.

Meet Walter

Walter is 28 years old with a great job no student loans or credit card debt. Walter thought he was in perfect shape to purchase his first home. What he wasn’t taking into consideration was his $850 a month car payment.

This is what Walter looked like on paper:

Income: $104,000

Income Type: Salary

Down Payment: $80,000

Credit Score: 680 – 799

Maximum Purchase Price (no car): $641,243

Maximum Purchase Price (with car): $580,486

Walter’s home buying power was reduced by $60,757 because he purchased a car with a large monthly payment.

Don’t be Walter.

If you’re thinking about buying a home SCHEDULE A CALL with me to find out what you can qualify for (or APPLY ONLINE); with and without that shiny new car.

Your Mortgage Pal,

Donna

 

Bank or Mortgage Broker. That is the question!

General Donna Thornton 8 Feb

Bank or Mortgage Broker? Help!

Your parents tell you to go to your bank. Your best friend suggests a call to their Mortgage Broker.  What should do you do?

The first step is understanding the difference between the two.

Bank Representatives are employed by the bank and are often paid salary and commission. They are only able to offer Bank specific products. In addition to mortgage products, a bank representative is expected to be well versed in (and sell): Credit Cards, bank accounts, RRSPs, and investments.

A Mortgage Broker (or Agent) in Ontario is Licensed by The Financial Services Regulatory of Ontario (Check to see if your Broker is Licensed HERE)  to sell mortgages by a specific Brokerage.  Brokers have access to both Bank and Non-Bank Lenders. Brokers can offer solutions for all types of borrowers (good credit, self-employed, poor credit, and even bankruptcies).

Bank Representatives have a suite of products that they offer, with little to no exceptions outside of their traditional box. Each bank will access your credit and send it to central underwriting for approval. If what a client needs is not available within their product offerings the file comes back declined. This process can take days, even weeks, leaving the client to start again with another bank and a hit to their credit score. Choosing a Mortgage Broker allows a client to work with one person who has access to several lenders (DLC FC Funding has 121, for example). This means that the clients credit report is pulled once, and then the Broker submits the file to a lender that has a product that best suits the clients needs. Having a long list of potential lenders and understanding the various products offered saves clients both time and money.

A quick Google search tells us that a monoline lender is a lender that focuses on providing a specific type of credit such as mortgages, car loans, or personal lines of credit. They do not offer chequing or savings accounts or other related services (e.g., retirement savings products, credit cards, insurance, etc.).

Personally, I believe that Monoline lenders have a bad rap because many people don’t understand who they are and what they do!  I’ve even heard people suggest that it’s unsafe to get your mortgage from anyone other than a bank. This is so untrue! It’s important to understand that all monoline lenders must have an exit strategy before they enter the marketplace making them as safe as a bank. Monoline lenders are financially backed by investors which allows them to offer various mortgage options to meet most client’s needs. While most Monoline lenders do not have brick and mortar locations, they are easily accessible online or via telephone.

There is a place in the mortgage space for banks. Mortgage Brokers do have access to several Big Banks and can place your mortgage there. The bigger question is: is the bank the BEST place for my mortgage?

Personally, I have a hard time understanding why people don’t use a Mortgage Broker.  Why wouldn’t you have a licensed professional arrange your mortgage? Would you go to a massage therapist for a root canal? I hope not! When you’re thinking about getting a mortgage THE MOST IMPORTANT question should be: “what do I need my mortgage to do for me?” Once you have that answer knowing which route is best for you will be clear.

I get it. Mortgages can be scary. It’s my job to help you understand them. If you’d like to chat, please CLICK HERE to schedule a call with me. Are you already in the market and want to know what you qualify for? Hop on over to my ONLINE APPLICATION to find out!

Your Mortgage Pal,

Donna