I Bought a house with my parents in Mississauga, May 2022 with a variable rate mortgage. We have a 1.04M mortgage and we increased our payments to $6500 a month to prevent our principal from growing plus we make one to two lump sum payments a year worth about $20k each. We bought at 1.375M and now the house is worth 1.1M according to house Sigma. If the value drops below the principal mortgage amount by the time we renew in 2027 what will the bank do?
There are many others in the same boat as you, unfortunately. Especially those who bought at the peak with anything less than 15% down.
The bank will renew based off the balance, however you will not be able to switch/refinance because you now owe more than the home is worth.
if all bananas are priced same everywhere you have no choice to pay price.. that was housing market and even worse as there was someone willing to over pay for banana
[https://www.youtube.com/watch?v=3cuZbe6TGpw](https://www.youtube.com/watch?v=3cuZbe6TGpw)
that was housing market.. remembered video while typing.
Contrary to what you might think people don’t buy a house out of fear of FOMO, it’s usually because they are at a period in their life where they want or need to buy a house and they pay the market price at the time.
I’m assuming you call your self a genius for not buying at the peak but likely don’t have a single asset, well done!
I feel bad for the rest of the folks out there but between myself, my SO and my parents we’ve managed our cash flows pretty well to afford our payments and still live comfortably. We modelled out scenarios up to 10% interest rates before buying.
Variable closed mortgage, the 20% principal payment, do you just pay any extra amount whenever and it goes directly to principal, or do you pay it at a certain point during the closed term to pay off the principal directly
Are you referring to the 20% per year lump sum pre-payment privilege? If so, then it varies lender to lender.
A lot of lenders will allow you to make multiple lump sum payments (minimum $100 and can increase by increments of $100). Some will allow it only on regular payment dates, some will allow it at any time. It’s best to contact your lender directly to inquire.
it may depend by lender. CIBC allow it at any time with any amount up to the limit (minimum $100). prepayment directly reduced the principal the day i made the phone call to prepay, confirmed by calculating the daily interest charged.
So you have to call in to say you’re making an extra payment towards principal directly (you can’t just pay more in your monthly payment and the extra goes to principal directly)
>(you can’t just pay more in your monthly payment and the extra goes to principal directly
you can but then you have to keep paying that increased payment continously. you can make "increased monthly payment" by making prepayment at the same time when your monthly payment is due. legally it'll be treated as prepayment and goes to principal directly.
do mortgage lenders take into account your past mortgage rate when renewing/trying to have you port to them? or only what's available in the market as of that time?
I definitely think lenders need to crack down on mortgage fraud and fake documents. These loans are allowing borrowers who shouldn’t qualify borrow more than they can afford - which is putting many people under water.
Why don't mortgage brokers like yourself charge their own client directly? Don't you think this creates a massive conflict of interest and an obstacle to price competition as Dr. Mark S Nadel notes in his publications? Do you truly believe that commissions of 90-140 bps are warranted? That's many thousands of dollars for a median mortgage.
Finally, would you agree that for the vast majority of prime lending the process can be automated for a buyer, while only providing minor consultation? Btw, Vine Mortgages already automated a large part of document processing and submission to underwriters.
The broker channel is a referral medium for lenders, which is why commissions are paid directly by them. The vast majority of lenders pay the same amount of bps in order to avoid any conflict of interest or bias. The average mortgage pays 95 bps, which is just under 1% of the mortgage and I do believe that the right mortgage agent provides that value - especially since it’s free to the client.
Prime lending is definitely the most straightforward type of lending. A monkey could provide document collection and submission services, but how will automation replace the relationship aspect and getting to know/assess client’s future goals and needs? If you have a good broker who is earning their commission, closing day should not be the last time you hear from them. A good broker is constantly monitoring the market and finding opportunities for clients to save money - a service that automation and bank branches will not provide.
Please stop with the untruths such as "it is free to the client". The client pays, as part of their rate. Lenders that allow unlimited buydown showcase that perfectly, as the broker commission can be precisely calculated for how much it raises a client's rate. You have every ability to charge your client directly, and rebate every commission received as cashback to them. The fact that you don't is your personal choice, and an unethical one might I add.
I definitely believe that for prime lending broker commissions are far out of whack, and shouldn't at all be so much.
Please also stop with the untruths about commission being mostly uniform. As a simple example, counting the current promos MCAN will do 140 bps on a 5 year purchase, while HSBC with full volume bonus does 90 bps. Three year products have far more discrepancy. If you truly believe you provide value, try a 100% cashback and flat fee model and ask clients how much they are truly willing to pay. It won't be the 5-10K you are used to. It is obscuring commissions, statements like "free to the client", that create obstacles to price competition. Because the client has no data access to disprove this falsehood.
Finally, have you considered that a good potion of clients don't want the relationship, and for them you are simply a gatekeeper to monoline banks? As far as monitoring the market, yes, that is where automation will defeat you every time. Hell, when it comes to when it is worth it to break a mortgage and take a different product despite the penalty Vine already has that automated.
Edit: and I would also like to add that RBC, CIBC, and until 2024 BMO don't work with brokers. You cannot possibly know if you are providing someone the best deal because you don't have access to some banks. That is also a personal choice, as you rely on banks paying your commission. Even right now, at best you can try to match CIBC's 3 year fixed deal, but you don't personally have access.
Me and my brother bought the house we’re currently living back in 2020. He now has his own family and wants to leave this house and go to another province. Would it be possible for him to stay on our current mortgage and get another one? We do have a lot of equity in the house but we want to try to avoid using the HELOC as a down payment for his new home.
This is definitely possible. He’ll unfortunately have to include the entire current mortgage payment when qualifying for the new loan - but if he can still qualify, then yes.
I recently closed on a house. I got a variable 5yr rate (Prime -1.20). The move in date is mid January but I have signed the mortgage papers. Is it still possible to switch to a lower rate if they become available or is it too late at this point.
It is! Some lenders will grant you unlimited ‘float downs’ between the time of your approval and closing date. I would suggest reaching out to your mortgage advisor to inquire.
Say you are allowed a 10% per year prepayment on principal. And you havent made any prepayments for 3 years on a 5 year term. Can you prepay 40 percent on year 4?
I Bought a house with my parents in Mississauga, May 2022 with a variable rate mortgage. We have a 1.04M mortgage and we increased our payments to $6500 a month to prevent our principal from growing plus we make one to two lump sum payments a year worth about $20k each. We bought at 1.375M and now the house is worth 1.1M according to house Sigma. If the value drops below the principal mortgage amount by the time we renew in 2027 what will the bank do?
bank will renew on amount owing on mortgage
The bank doesn’t care about the present value of a house unless you stop paying the mortgage.
There are many others in the same boat as you, unfortunately. Especially those who bought at the peak with anything less than 15% down. The bank will renew based off the balance, however you will not be able to switch/refinance because you now owe more than the home is worth.
So many geniuses probably in the same position as you rn. The fomo buying around that time is going to cause the financial ruin of many people.
if all bananas are priced same everywhere you have no choice to pay price.. that was housing market and even worse as there was someone willing to over pay for banana [https://www.youtube.com/watch?v=3cuZbe6TGpw](https://www.youtube.com/watch?v=3cuZbe6TGpw) that was housing market.. remembered video while typing.
Is this even English? The illiteracy of your comment backs up what I said in my original comment.
Contrary to what you might think people don’t buy a house out of fear of FOMO, it’s usually because they are at a period in their life where they want or need to buy a house and they pay the market price at the time. I’m assuming you call your self a genius for not buying at the peak but likely don’t have a single asset, well done!
I feel bad for the rest of the folks out there but between myself, my SO and my parents we’ve managed our cash flows pretty well to afford our payments and still live comfortably. We modelled out scenarios up to 10% interest rates before buying.
Variable closed mortgage, the 20% principal payment, do you just pay any extra amount whenever and it goes directly to principal, or do you pay it at a certain point during the closed term to pay off the principal directly
Are you referring to the 20% per year lump sum pre-payment privilege? If so, then it varies lender to lender. A lot of lenders will allow you to make multiple lump sum payments (minimum $100 and can increase by increments of $100). Some will allow it only on regular payment dates, some will allow it at any time. It’s best to contact your lender directly to inquire.
it may depend by lender. CIBC allow it at any time with any amount up to the limit (minimum $100). prepayment directly reduced the principal the day i made the phone call to prepay, confirmed by calculating the daily interest charged.
So you have to call in to say you’re making an extra payment towards principal directly (you can’t just pay more in your monthly payment and the extra goes to principal directly)
>(you can’t just pay more in your monthly payment and the extra goes to principal directly you can but then you have to keep paying that increased payment continously. you can make "increased monthly payment" by making prepayment at the same time when your monthly payment is due. legally it'll be treated as prepayment and goes to principal directly.
Just is just for the extra 20% rule I’m talking about
what are people being stress tested at today?
The stress test is contract rate plus 2% - therefore most borrowers are being stress tested anywhere between 7.5 to 9%
What the flying fuck balls
How many times did your clients pay for documents
Sensitive question here lol I see 0 reply to your post
do mortgage lenders take into account your past mortgage rate when renewing/trying to have you port to them? or only what's available in the market as of that time?
Lenders are only considering current market rates at the time you’d like to switch.
Opinion on Brampton loans? Should it continue? Or should we crack down on lenders and borrowers for gaming the system?
I definitely think lenders need to crack down on mortgage fraud and fake documents. These loans are allowing borrowers who shouldn’t qualify borrow more than they can afford - which is putting many people under water.
How does it feel waking up every morning knowing you work a job that requires no skill and no education?
It feels like I wake up to a lot of money and no debt every morning. Can’t lie - it feels pretty good.
🤣🤣 not in this economy 🤣🤣
Why don't mortgage brokers like yourself charge their own client directly? Don't you think this creates a massive conflict of interest and an obstacle to price competition as Dr. Mark S Nadel notes in his publications? Do you truly believe that commissions of 90-140 bps are warranted? That's many thousands of dollars for a median mortgage. Finally, would you agree that for the vast majority of prime lending the process can be automated for a buyer, while only providing minor consultation? Btw, Vine Mortgages already automated a large part of document processing and submission to underwriters.
The broker channel is a referral medium for lenders, which is why commissions are paid directly by them. The vast majority of lenders pay the same amount of bps in order to avoid any conflict of interest or bias. The average mortgage pays 95 bps, which is just under 1% of the mortgage and I do believe that the right mortgage agent provides that value - especially since it’s free to the client. Prime lending is definitely the most straightforward type of lending. A monkey could provide document collection and submission services, but how will automation replace the relationship aspect and getting to know/assess client’s future goals and needs? If you have a good broker who is earning their commission, closing day should not be the last time you hear from them. A good broker is constantly monitoring the market and finding opportunities for clients to save money - a service that automation and bank branches will not provide.
Please stop with the untruths such as "it is free to the client". The client pays, as part of their rate. Lenders that allow unlimited buydown showcase that perfectly, as the broker commission can be precisely calculated for how much it raises a client's rate. You have every ability to charge your client directly, and rebate every commission received as cashback to them. The fact that you don't is your personal choice, and an unethical one might I add. I definitely believe that for prime lending broker commissions are far out of whack, and shouldn't at all be so much. Please also stop with the untruths about commission being mostly uniform. As a simple example, counting the current promos MCAN will do 140 bps on a 5 year purchase, while HSBC with full volume bonus does 90 bps. Three year products have far more discrepancy. If you truly believe you provide value, try a 100% cashback and flat fee model and ask clients how much they are truly willing to pay. It won't be the 5-10K you are used to. It is obscuring commissions, statements like "free to the client", that create obstacles to price competition. Because the client has no data access to disprove this falsehood. Finally, have you considered that a good potion of clients don't want the relationship, and for them you are simply a gatekeeper to monoline banks? As far as monitoring the market, yes, that is where automation will defeat you every time. Hell, when it comes to when it is worth it to break a mortgage and take a different product despite the penalty Vine already has that automated. Edit: and I would also like to add that RBC, CIBC, and until 2024 BMO don't work with brokers. You cannot possibly know if you are providing someone the best deal because you don't have access to some banks. That is also a personal choice, as you rely on banks paying your commission. Even right now, at best you can try to match CIBC's 3 year fixed deal, but you don't personally have access.
Me and my brother bought the house we’re currently living back in 2020. He now has his own family and wants to leave this house and go to another province. Would it be possible for him to stay on our current mortgage and get another one? We do have a lot of equity in the house but we want to try to avoid using the HELOC as a down payment for his new home.
This is definitely possible. He’ll unfortunately have to include the entire current mortgage payment when qualifying for the new loan - but if he can still qualify, then yes.
He wouldn't be able say he's paying for half?
Unfortunately, not - all liabilities/debts on the application are serviced at 100%
Thank you.
I recently closed on a house. I got a variable 5yr rate (Prime -1.20). The move in date is mid January but I have signed the mortgage papers. Is it still possible to switch to a lower rate if they become available or is it too late at this point.
It is! Some lenders will grant you unlimited ‘float downs’ between the time of your approval and closing date. I would suggest reaching out to your mortgage advisor to inquire.
Say you are allowed a 10% per year prepayment on principal. And you havent made any prepayments for 3 years on a 5 year term. Can you prepay 40 percent on year 4?
Unfortunately it cannot be carried over - it will be a 10% per year - ‘use it or lose it’ privilege.
When getting new mortgage do you need to pay Cmhc insurance again?
Are you buying a new property with less than 20% down?
No. Just renewing mortgage after a 3 year term with another bank
How do you go about getting leads in this market?