Make Money Count

This week's episode goes through the entire business of Cannect Home Financing, the best Mortgage Broker in Toronto. From the brokerage side, to the private lending side, and the investment side, Cannect was designed to help anyone looking to improve their financial situation. Have a listen below to hear about how they all tie together:

1:22 - Information is an easy way to make a difference in the mortgage space.

3:56 - Matthew shares a story about how Cannect helped a couple pay their credit card debt and finance their business through their home equity.

8:48 - Marcus explains how Cannect helps borrowers through it’s investment capital.

12:30 - Justin talks about how Cannect can help borrowers by asking questions to the lenders they didn’t even know they had.

13:34 - Marcus explains how Cannect is positioned to serve borrowers and investors without bias.

19:06 - The conversation to a better mortgage solution starts with a broker.

21:08 - Justin outlines a standard call with Cannect.

23:20 - Marcus explains why Cannect has an “elegant” business model.

32:20 - Brenda looks for a home equity loan solution from Cannect.

35:20 - Justin and Matthew clarify how quickly bad credit can be repaired.

37:25 - Don’t take advice from the wrong people in uncertain economic times.

This week’s episode is all about being well informed. What does this mean? Knowing your mortgage time horizon, knowing what lenders are out there, knowing what resources are available to you as a borrower. The big banks thrive on fear and a lack of knowledge that their borrowers possess. Have a listen to the episode to learn more important-to-know information, answers to some caller questions, and a dive into the mortgage renewal process.

As you’ll hear at the end of the episode, we have a new mortgage TV show on CHCH TV every Saturday morning at 8:30. Starting this weekend, tune in to watch our show live! We are very excited about it and you should be too.

Hope you are having a great end to the summer.

If you're looking for a stable investment, take a look at the Cannect Mortgage Fund.

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0:00 - Intro.

This week’s episode gives an outline and history of the different lending options in the Canadian mortgage marketplace. If you’ve seen a mortgage broker, you’ll know of these mortgage finance companies like First National and MCAP, but the majority of people still only think of the big banks as the optimal lending options. Have a listen to this week’s episode to learn more about the backgrounds of these mortgage finance companies and how they came into fruition.

Pay special attention at around the 25-minute mark where we explore the concept of open banking. Many countries around the world have been able to leverage the idea with innovative fintech solutions, but not Canada. The big banks have so much lobbying power with the federal government and they stand to lose a lot of the control they have over the Canadian consumer if their data were to be shared and used in innovative products. Hopefully Canada doesn’t reach this point embarrassingly late.

If you're looking for a stable investment, take a look at the Cannect Mortgage Fund.

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0:00 - Intro

This week’s episode fielded several caller questions. The Cannect team went over strategies to help get a better rate from your bank, the reasons people may have for breaking their mortgage, and dove into the bank’s true motives when dealing with their most loyal customers. Marcus, Justin, and Matthew outline their stories of how they got into the mortgage industry and what qualities and skills can help people thrive in it. Have a listen to the episode below:

Breaking your mortgage and the penalties associated with it is the topic we tackle this week. We had three callers, along with Iain, explain their current mortgage situation and what they face to get out of it. As you’ll hear, sometimes the penalties are minimal and your lender will try to hide that from you, but other times it is substantial. Have a listen to this episode to learn how the penalties get calculated yourself.

There is so much to take away from the scenarios these callers are facing. As long as you have a fixed-rate mortgage, the break penalty calculation will always remain the same:

Step 1: Calculate the discount you received from your bank by subtracting the rate they gave you from the 5-year fixed posted rate at that time.

Step 2: Find the difference between the current posted rate you’d pay for a mortgage to finish your term and the discount you received.

Step 3: Calculate the Interest Rate Differential (IRD) by taking the difference between the rate you received and the step 2 difference.

Step 4: Divide the IRD by 12 to get the Monthly IRD.

This is what the bank wants to recover from you from leaving your deal early. Multiply the monthly IRD by the remaining balance and the number of months remaining on your term to get your penalty to break. If you don’t want to take the time to calculate this, no problem. Cannect will do it for you. Just give us a call and we’ll let you know if the numbers work for you to save long-term.

Podcast Notes:

0:00 - Intro

Dealing with private lenders can be tricky. They often see good borrowers in desperate situations. These lenders often have to pay a lot of third party fees for deal origination and advisor commissions, so they need to make that up from the borrower. Without information, these borrowers can be exploited as a result. Have a listen to the episode to get the details.

As we mentioned in the episode, a lot MICs out there have to pay fees to brokers to get them deals and to advisors to get them lending capital. These simultaneously increase the rates and fees they have to charge borrowers to lend money and decrease the rate of return for investors. Cannect’s ability to generate its own deals and raise its own investment capital means that people can borrow at a cheaper rate and investors can earn a better return. Cannect prices based on only two things: home equity and exit strategy, so we never take advantage of a borrower’s level of desperation to price higher. If the rate you get from a private lender sounds ridiculous when you have a lot of equity in your home, it probably is. Cannect will have a better rate for you and our salaried staff will work with you to get to lower cost capital afterwards. 

Give us a call today: 416-766-2666

Notes:

0:00 - Intro

#MakeMoneyCount #Cannect #Mortgages

This week’s episode had it all: Caller questions, tips for evaluating your mortgage breaking options, and classics from the Travelling Wilburys. Our callers each had situations that everyday borrowers can relate to. Being turned away from borrowing more due to being self employed, and needing money to support a small business that is struggling from COVID. So many people have experienced these situations and they are exactly why Cannect exists. Have a listen to hear how Cannect can help.

Some key points that we really want to emphasize are:

1.      Even if you know to break your mortgage to save long-term, call us to help reduce your break penalty.

Determining whether or not you should break your mortgage is not as hard as you think. It just comes down to one calculation: The amount you would pay in interest on your current mortgage over the rest of the term, minus the amount you’d pay in interest over that time period if you broke it and secured a lower rate, minus the penalty to break your mortgage. This penalty tends to be quite high, and it is usually the factor that prevents people from going through with a mortgage break. If you think that may be the case, still give us a call and see if we can reduce this for you. We have found that over the last ten years, we have been able to engineer a break penalty 20%-25% lower than initial quote from the bank to break it. Those savings go directly into your pocket, no one else’s.

2.      Your bank may match a lower rate you get elsewhere, but it will still come at a cost.

As soon as the bank offers to reduce your rate to match a competitor, they will factor that discount into the break penalty you’d be charged to get out of it. It’s not going down; it’s going up to make up for the reduction in their interest income. Big banks are legally allowed to charge higher break penalties than other mortgage lending institutions. Even if they disclosure this to you directly and say that you ‘probably won’t have to break’, remember that 75% of Canadians break their mortgage before the end of their term. Even if your bank matches the offer you get elsewhere, it will usually come at the cost of a higher break penalty.

Breaking your mortgage is always an option to you as a borrower to improve your long-term savings. You can determine the savings yourself based on rates you see online, but give us a call to get that pre-approval and really get that exact savings number. Who knows, maybe we’ll even be able to get that penalty reduced to save you even more.

0:00 - Intro

This week’s we zone in on home equity loans. There is a tug of war going on right now between interest rates and inflating asset prices that’ll dictate where housing prices will go over the next several years. This adds a lot of uncertainty to people looking to enter the real estate market for the first time, but it will also greatly impact those already in it looking to take out home equity. A short-term home equity loan may be your best option. You may have missed the episode live because you were watching an amazing Euro Finals, but have a listen to it now to learn some helpful tips for evaluating your home equity loan options.

Three helpful considerations in order to get the best product FOR YOU are:

1.      Time: Whatever amount of time you think you need the money for, add three months. Lenders will reduce rates if you are precise with the time you need the money for because they want to be able to lend your money right back out again after you paid it back. If you underestimate how long you need the money for, you’ll be forced to renew for another term and get hit with fees in the process.

2.      Amount: Similar to the time aspect, understating the amount of money you need also leads to extra fees if you go back to them for more. They will always try to give you less than you need as a result. So know your number, and make sure you get it or as close to it as you can where you know you won’t have to go back.

3.      Exit Strategy: This is by far the most important. Lenders always want to know how their borrowers plan to exit the deal. If you can communicate a clear and reliable plan to the lender for how the funds will be used and then returned, you’ll find they can be much more flexible on the rate they offer you.

These are important aspects of all home equity loan that lenders take very seriously. However, there are also questions that you as the borrower should be asking your lender before coming to an agreement:

1.      How long will it take to close the deal? The longer it takes, the your more debt continues to increase and your credit score decreases. Make sure your private lender can close the deal quickly.

2.      Are there any hidden fees? Once you get closer to the closing date, lenders know that time is no longer on your side and if there are any fees you don’t know about yet, you may find you don’t have a choice anymore. Ensure you know all the fees that may be involved, from the lender, any appraisal, and legal costs, before proceeding with the deal.

3.      Don’t be afraid to ask the lender if they have dealt with other borrowers in your situation, and if so, what rates did they pay. Lenders and brokers are governed by regulators and they aren’t allowed to unfairly price gauge their borrowers. Make sure a lender does not detect desperation in your voice and upcharge you because of it.

Information is your friend in this space. The more you know about what lenders are looking for in a good borrower and what you need from them, the more you will be able to save long-term.

#Cannect #HomeEquityLoan #HomeFinancing #MortgageBroker

We hope you all had a great Canada Day weekend. This week’s episode takes a deep dive into the profitability of our Canadian big banks. Did you know that these banks, on average, have been profiting $4,000 per Canadian household over the last year? While the services of the banks are essential to households and our economy as a whole, it is important to know how to avoid being taken advantage of. Have a listen to this episode to get a better understanding.

Here are some important takeaways to consider.

Loyalty is not always your friend.

We have discussed this in a few episodes now, but for a good reason. If you are under the belief that your bank is your only option for credit, they will leverage that. A lot of borrowers have a mortgage with their bank with a collateral charge that exceeds the amount they borrowed and because of the stress test, they still can’t increase their mortgage. When the banks talk about your unsecured credit options, that’s when it’s time to call Cannect. The unsecured options will destroy your credit if you keep their balance maxed out for too long. Seek out other options, a mortgage broker will help you do that.

They’re called the Big Banks for a reason.

Their profitability comes from their size. They have the ability to hold off the competition because of their size and brand awareness. 20 years ago, only 20% of Canadians used a mortgage broker. Now that number is up to 40%, but still well-below the US at 80%. The banks’ residential mortgages become less profitable as more Canadians turn to mortgage brokers, but the banks went through this problem before with Trust companies. When companies, like Canada Trust, started providing discounted rates, it ate into the big banks’ market share. As a result, these companies were acquired by TD and other Big Banks.

The banks will always be able to adapt, so it’s always up to us as the consumers to recognize that we can be a David to their Goliath at times and learn about our opportunities to save through other options. Cannect agents are happy to discuss these options with you anytime.

Marcus Tzaferis and the Cannect Team

#Cannect #MortgageBroker #CanadianBanking

Marcus, Justin, & Matthew once again join Iain Grant, host of Newstalk's 1010 Radios' Ask The Expert, for a deep dive into the world of renegotiating and refinancing your mortgage.

Purchasing a home can be one of the most stressful situations in your life, and trying to renegotiate the terms of that purchase years down the line may seem like a daunting task that you're going to avoid at all costs. But truthfully, there may be a chance you're leaving thousands of dollars on the table as your equity sits doing nothing, so why not look into what options are on the table for you?

Refinancing is the term used to renegotiate the terms of your mortgage. Why would you do that? Well, perhaps you want to lower your month to month payments? Maybe you want to access some of the equity in your home now that it's gone up in value? Maybe you want to shorten how long it will take to pay off? Whatever the reason, you shouldn't be the one negotiating this contract.

The team at Cannect is trained to negotiate these terms and find you the best product available in the market today. Your bank might not be the best choice when it comes to your new mortgage. You're already a client of theirs, and they know how much this intimidates you. 

You shouldn't have to do this work. You should have the best options available to you all the time. Those options come from Cannect.

If you're looking for a stable investment, take a look at the Cannect Mortgage Fund.

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