It’s important to ensure you’re working with an experienced professional mortgage planner carrying an AMP designation. Since this is the largest financial transaction of your life, you need partner with someone who is capable of properly advising you and troubleshoot any issues that may arise.
What questions do you ask? These questions must be answered precisely. If the “professional” hesitates or says something unclear, run to a true professional who can clearly explain the answers!
1. What are mortgage interest rates based on?
The ONLY correct answer is the Bank of Canada rate for variable rate mortgages and for fixed interest rates mortgage backed securities, specialized mortgage bonds, or Government of Canada long bonds. A professional mortgage originator should at a minimum know the basics of how interest rates are determined. If an originator has their eyes on the wrong indicators, or worse yet has no idea of what these indicators are, needless to say it’s the “blind leading the blind”. At the Angela Calla Mortgage Team, we consistently review these indicators and, therefore, you can be confident in our ability to suggest mortgage strategies upfront to manage your mortgage long term.
2. How will rising interest rates in the coming years affect me if I take a fixed-rate mortgage product?
Most lenders will say if you’re locked in you are protected, which is a MISTAKE. That’s a dangerous answer when you consider what will happen when rates return to more normal levels (an increase of 2%) as experience shows us that the average mortgage payment in that case will rise $300 a month.
This is referred to as payment shock and it’s very risky for your long-term financial health. Working with a mortgage professional who proactively manages your mortgage and notifies you in live time when rates change with a suggestion on how to minimize payment shock is not only smart, but it also saves you thousands of dollars and years off of your mortgage. The Angela Calla Mortgage Team will show you.
3. What strategy are you recommending and why?
The key word here is “strategy”. If your mortgage professional can’t clearly articulate the strategy behind their recommendations to you, they’re simply quoting a rate, and frankly anyone can do that. On your largest investment, make sure you’re dealing with someone who has a solid financial plan that is considering your overall financial wellness.
4. What commitment are you giving me to personally manage my mortgage over the long term?
This is crucial. Many mortgage providers, especially bank personnel, have no desire or ability to proactively manage your mortgage over the long haul.
How can you take advantage of changing markets in the future if no one is watching them for you and all you get is information after it’s too late to benefit? Who will ensure you don’t miss an opportunity to renegotiate? If you’re considering a variable-rate mortgage, why would you do this with someone who’s not committed to keeping an eye on it and giving you information in real time to help you optimize the market and maximize your lifestyle?
At The Angela Calla Mortgage Team, the real job starts when your mortgage funds. Anyone can sell a mortgage, but only those truly committed mortgage professionals can manage your mortgage over the long term. With this long-term management approach, we can significantly reduce your total cost of homeownership and have strategies available when things in life don’t go as planned, isn’t that the point?
When you ask the right questions, you’re able to make educated decisions.
Fundamentals never go out of style.
With this being one of the most important and largest financial transactions, either for the first time or in the growth of your real estate portfolio, you may only do this 4 or 5 times in your life… we do this EVERY single day and have over a decade of experience both professionally and personally, and sit on the front lines of advisory boards for lenders, government bodies, insurers and media. It’s your home and your future. It’s our profession and our passion. We are ready to work in your best interest.
Angela Calla, AMP
Host of “The Mortgage Show” on CKNW AM980 Saturdays at 7pm