Category Archives: refinancing

Beer, cars, and mortgages? Super Bowl ads go financial this year

At least six financial brands have purchased air time for the television spectacle that attracts more than 100 million viewers, aiming to establish a place among more mainstream institutions by promising easy and convenient ways to manage your money. The Super Bowl featured just two financial-services ads last year and three in 2014.

Americans’ attitude about personal finance has undergone a shift since the global financial crisis of 2008, with more people — especially millennials — now favoring online platforms and digital wallets.

“The financial world is changing very quickly, and as a result the Super Bowl becomes a good platform to get ahead of the change,” said Tim Calkins, professor of marketing at Northwestern University’s Kellogg School of Management and creator of the school’s annual Super Bowl Advertising Review.

For the first time, PayPal Holdings Inc., SunTrust Banks Inc., Quicken Loans Inc. and Social Finance Inc., also known as SoFi, have all bought ads during the Super Bowl, which will air on CBS Feb. 7. A 30-second spot costs $5 million. TurboTax is returning for its third consecutive year, and its parent company, Intuit Inc., will make its second showing.

The theme is optimism. Consumer spending grew last year by the most since 2005, and purchases of new U.S. homes surged in December to the highest level in 10 months, closing out the best year for housing since 2007, according to the U.S. Commerce Department.Intuit Inc.:

YouTube: Death Wish Coffee Company Big Game Commercial: Storm’s a-Brewin’

Intuit Inc.’s commercial features a small business that uses its QuickBooks accounting software. Death Wish Coffee Co., based in Round Lake, New York, won the ad spot after a nationwide contest that began last year.Quicken Loans Inc.:

YouTube: #RocketMortgage Super Bowl Ad: What We Were Thinking | Quicken Loans

Quicken Loans makes its Super Bowl premiere with a spot for its new product, Rocket Mortgage, which allows users to apply for a home loan online or via their mobile phone. The company said it will couple its ad, “What We Were Thinking,” with an online sweepstakes and social-media push.SunTrust Banks Inc.:

YouTube: Super Bowl Commercials 2016 | :30 Hold Your Breath | SunTrust onUp Movement

SunTrust said it hopes its first Super Bowl ad, “Hold Your Breath,” will start an ongoing nationwide movement promoting personal financial health. The campaign directs viewers to a website,, for financial tips and tools.TurboTax:

YouTube: TurboTax 2016 Big Game Teaser Commercial “Someone Else” (Official :60) TV Ad

TurboTax returns for its third consecutive Super Bowl appearance with an ad campaign demonstrating its online tax- filing software. A preview for its spot, “Someone Else,” features James Lipton, host of “Inside the Actors Studio,” being told he won’t star in a commercial for TurboTax.PayPal Holdings Inc.:

San Jose, California-based PayPal will take advantage of the game being hosted in nearby Santa Clara to air its first- ever Super Bowl ad. The company said its ad will showcase the future of money as the world shifts toward digital wallets and mobile money management.Social Finance Inc.:

YouTube: Some People Are Great (and Some Are Not)

SoFi began in 2011 as an online-lending platform for working professionals. It now hopes to showcase its financial products on a national stage. Its ad, “Great Loans for Great People,” will be its first Super Bowl spot.

Source: 05 Feb 2016

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We’ve hit bottom, says industry analyst

Interest rates – and in particular mortgage rates – can’t go any lower, and the growth of lending has peaked or is close to peaking, says one industry analyst.

“Canadian interest rates have bottomed. Most particularly, mortgage rates have bottomed,” says Dr. Sherry Cooper, chief economist for Dominion Lending Centres. “With 70% of Canadian households already owning their own homes and housing affordability declining – with the bottoming in mortgage rates and the rise in house prices – lending activity will inevitably slow as will the rise in the price of homes, which has continued strong in Vancouver and Toronto, particularly in the single-family sector.”

The growth in mortgage lending has likely peaked, or will very soon, Dr. Cooper told MBN. Bank of Canada data backs up her observations, showing that the growth in the number of mortgages has slowed this year, although dollar volumes continue to accelerate owing to house price increases.
With the high price of homes pushing people into the rental market, higher lending rates will only speed up the process.

And in turn, place pressure on those already burdened with a lot of household debt.

“Roughly 10% of Canadian home-owning households have high enough debt servicing costs relative to income that they are vulnerable if mortgage rates were to spike,” says Dr. Cooper. “The Bank of Canada has expressed repeated concern about this constituency and the lenders are well aware and cautiously prudent.”

While a housing crash isn’t in the cards, there will be a slowdown in the white-hot condo building market.

“We will not experience a housing crash as some Cassandras have predicted for decades,” says Dr. Cooper. “We will, however, see a slowdown in the pace of house price appreciation, especially for the condo sector, where overbuilding is most evident.”

Source:  Donald Horne | 29 Oct 2015

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Demographics driving key mortgage market

Industry insiders are attributing strong year-over-year growth in reverse mortgage originations to several factors – the most notable being human longevity.

“With the current demographic trends and extended life expectancy we project reverse mortgage originations to grow at 25-30 per cent annually over the next few years,” said Steven Ranson, president and CEO of HomEquity Bank. “Canadians are living longer, have underfunded pensions and insufficient savings. For many, their house plays a big role in a comprehensive retirement plan.”

The increase in consumer direct business as well as continued growth through referral partners including banks and mortgage brokers is producing record results in the industry. Brokers themselves are pointing to increased demand for a product many professionals were slow to refer on.

HomEquity Bank alone reported a record $41 million in reverse mortgage origination in the month of July, marking another month of record year-over-year growth for the reverse mortgage company. 

The reverse mortgage industry is booming in Canada, growing by 21 per cent in July compared to last year.

According to recent numbers from Statistics Canada, the 55-59 age group in the country make up 7.2 per cent of the overall population, with those age 60-64 making up 6.1 per cent.

The numbers that show how the reverse mortgage sector is ready to really take off are the percentage of people in the 55-59 age bracket, which make up 7.8 per cent of the total population – which places HomEquity Bank in the catbird seat, as is the only national provider of reverse mortgages in Canada available to those aged 55 and older.

The lender originates and administers Canada’s largest portfolio of reverse mortgages under the CHIP Reverse Mortgage and Income Advantage brands, and has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

Source: Donald Horne | 07 Aug 2015
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Seniors Can Now Tap More Equity

Seniors Can Now Tap More Equity | Mortgage Rates & Mortgage Broker News in Canada

Earlier this year HomEquity Bank increased its maximum loan-to-value on a reverse mortgage to 55% (in some cases slightly more). It was a change made with little fanfare, but one that will provide necessary cash to thousands more senior homeowners.Prior to this change, the bank lent up to one-half of a property’s appraised value. Now, qualified seniors can access at least $20,000 more on a $400,000 property, for example. This money can be a lifeline when an elderly homeowner has immediate expenses (e.g., medical costs), but no other source of liquidity and a need to stay in their home.

“We are rather conservative,” said Yvonne Ziomecki, SVP, HomEquity Bank in response to why the bank hasn’t offered this high of an LTV in the past. “Having 29 years of actuarial history on repayments, etc., gave us comfort to move in that direction.”

The company confirms that these higher lending ratios are here to stay. “We wouldn’t have offered it up if we didn’t believe we can continue offering it,” she explains. Note that qualifying for a 55% LTV reverse mortgage requires that a borrower be more than 75 years of age and have a marketable home in a good location.

Sidebar: HomEquity Bank is getting ready to launch its new “Mortgage Broker Direct” service in September. For the first time, mortgage brokers will be able to submit deals directly to the bank via D+H Expert. The company will offer an official designation for approved brokers called the “Certified Reverse Mortgage Specialist.” Brokers will receive continuing education (CE) credits for completing the certification, specialized marketing support and compensation equal to that of selling a regular five-year fixed mortgage.

Source: Canadian Mortgage Trends  July 22, 2015  Robert McLister  

The nine rules of credit: Which unpaid bills will impact your rating immediately?

It is also important to know what is on your credit report. Suppose you find yourself in a financial bind and you have to choose which bills you’re going to pay first that month. You should pay the bills that will affect your credit the most. By no means am I suggesting that you shouldn’t pay certain bills, but if there are times when extreme circumstances arise, such as an illness, death in the family, or loss of employment, you may have to make choices. During these times, when you can’t pay all your bills, it’s good to know that bills such as rent, heat, hydro, water, phone, cable, and taxes don’t affect your credit score right away. However, if these bills go unpaid for a number of consecutive months, they will be sent to collections.

Collection companies specialize in finding and collecting outstanding debts and provide services on behalf of the banks and lenders.

Once your bill is with a collection company, it will immediately register the black mark on your credit report. The collection shows up under the public records portion of your credit report where you will also see any bankruptcies, consumer proposals, and all the rest of the biggest negative hits to your credit. Public records including collections really hurt your credit. Unfortunately, paying the collection doesn’t remove the damage it has done because a collection will stay on your credit report six years from the time it was first registered.

You may be surprised how many people have collections recorded on their credit reports. Most times people don’t even realize it. They usually find out when they apply for some type of financing.

The hardest part about discovering that you have a collection reported when you’re applying for financing is that it can ruin your chances of approval, or at least cost you higher interest or fees. Either way, it is something most lenders will want confirmation it is paid before they will provide you with additional financing. The easiest way to confirm payment is by receiving a letter confirming that the account has been settled in full or the account balance is now at zero. Please make sure you keep this letter for at least six years as collections have been known to come back on your report even after you have paid.

If you have paid the collection and it is still showing up with a balance, please visit for services available to have it removed quickly.

Source: RICHARD MOXLEY Contributed to The Globe and Mail Published Thursday, Jul. 16, 2015 6:00AM EDT

Are you helping or hurting your client?

Are you helping or hurting your client?

Mortgage loans for clients with bruised credit happen every day – but the industry as a whole needs to ensure those loans are improving fiscal responsibility, and not sinking the client deeper in debt, says one alt lender.

“One of the things we try to say when talking to brokers is, ‘How are we helping the client in providing this funding?’” says Jason Provencher, the manager of business to business solutions with Bridgewater Bank. “We want to say, ‘Is this client likely to take the advice of the lender and the broker and correct this situation, or are they just trying to get money to buy a new truck?’”

It is a vital role that brokers can play in concert with lenders, Provencher told MBN, advising clients to improve their financial situation and find fiscal restraint, instead of falling prey to wanting everything right now.

“Provide the advice to the client, show them everything they need to do to correct the situation and how it will benefit them, and continue to follow up with them as part of the relationship,” he says. “It is important that these talks include future financial planning, because it isn’t just about how this money is going to help you today, but how is it going to set you up for success tomorrow.”

Provencher says that Bridgewater Bank sells the mortgage product with an eye to how it will help the client down the line, to move them into better things.

“Yes, we want to prevent bankruptcies and foreclosures; but what we hope we’re doing in the market is helping the client improve their situation,” he says.

As for the future of lending, Provencher sees a three-tier lending market where people with bruised credit may start in the private space, later moving to the alternative space, and eventually moving into the prime space.

“It is very competitive on the alt side,” he says, “and the rates really aren’t that bad – we’re talking four to five per cent for those with bruised credit or who may have been in bankruptcy before.”

Looking to the future, Provencher reflects on how much has changed since he applied for his own first mortgage.

Source: by Donald Horne | 16 Jul 2015

TD cuts prime rate in wake of Bank of Canada move

Toronto-Dominion Bank was the first of the big banks to decrease its prime lending rate after the Bank of Canada cut its key interest rate cut on Wednesday in response to slower-than-expected economic activity this year.

The lender lowered its prime rate to 2.75 per cent, down a tenth of a percentage point, marking a far shallower reduction than the central bank’s quarter point cut.

When the Bank of Canada cut its key rate in January, also by a quarter point, the big banks were slow in responding to the reduction. They then took a public drubbing over their refusal to follow the central bank in lock-step, lowering their rates by just 0.15 percentage points.

Should other banks follow TD’s lead, they will have lowered their prime rates by a total of 0.25 percentage points this year, or half the Bank of Canada’s total rate reduction of 0.5 percentage points.

However, some observers have pointed out that the Bank of Canada may not mind the muted response from banks.

House prices have soared, raising concerns among central bankers that prices may be overvalued by as much as 30 per cent. As well, Canadian indebtedness has risen to new heights, making consumers vulnerable to rising unemployment levels or an eventual backup in borrowing costs.

For the banks themselves, the response to the Bank of Canada comes as they attempt to shore up profits driven by their lending activities. Since the banks make money by lending at higher rates than their own borrowing costs, substantially lower prime rates can compress their margins.

Source: DAVID BERMAN The Globe and Mail Published Wednesday, Jul. 15, 2015 11:14AM EDT

How banks/lenders weigh your mortgage application

Understanding the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS) and how it affects your mortgage application.

Before a lender approves your mortgage application, they will attempt to quantify how your debt affects your finances and predict your ability to make mortgage payments. They measure your affordability using two ratios: the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS).

Gross Debt Service Ratio (GDS)

The GDS looks at the percentage of your income that is needed to cover your required monthly housing costs; this includes your monthly mortgage payments, property taxes,heating costs, and 50% of your condo maintenance fees (if applicable).Generally, this percentage must not exceed 32% of your gross monthly income, to qualify for a mortgage. For example, if your gross monthly income is $3,500,you should be spending less than $1,120 on monthly housing expenses.

Your GDS ratio max limit: $3,500 x 32.0% = $1,120

Total Debt Service Ratio (TDS)

The TDS ratio takes the GDS ratio one step further, by including ALL debt obligations into the calculation, such as car payments, credit card debt, lines of credit, and alimony (if applicable). The percentage of your income that is needed to coverall monthly obligations must not be greater than 40%. For example, if your gross monthly income is $3,500, you should not be spending more than $1,400 per month.

Your TDS ratio max limit: $3,500 x 40.0%= $1,400

Both the GDS and TDS are tools used to measure your credibility and risk. The guideline limits are enforced by the Office of the Superintendent of Financial Institutions (OSFI),which is the primary regulator of banks and other financial institutions in Canada.

Falling outside the limits

Can you still get approved if the bank determines your GDS and TDS ratios are just outside the upper limits?

“The limits to the GDS and TDS ratios aren’t set in stone; however, banks do treat them as a hard guideline,” said SteveLevine, a mortgage broker with True North Mortgage. “Every lender is a little different, in terms what they are willing to accept beyond the max limits. Some banks will accept TDS ratios of 41% or 42%, depending on the situation, so there is a bit of wiggle-room. However, no bank will accept a TDS ratio that is 5% above the limit.”

When asked on what mortgage applicants need in order to get an exception with high GDS/TDS scores, Mr. Levine says that consumers need “clean files” with strong credit scores.

“Mortgage brokers have unique relationships with lenders, so if I have a client that is slightly above the limit, I might call a mortgage underwriter with a particular bank and explain my clients’ case, so long as I believe the client has a quality file – one that the lender will find appealing.”

If you find yourself outside the GDS and TDS limits, you may also implement four strategies to lower your GDS and TDS percentages, before submitting your mortgage application:

1) Increase your down payment amount

2) Reduce your overall debt

3) Increase your gross household income (i.e. add on a spouse’s income)

4) Choose a less expensive property

Understanding your Gross Debt Service Ratio and Total Debt Service Ratio is important before you plan to buy a home, because these ratios are used to determine your credit worthiness to lenders.


Get your free summer mortgage check up now

Get your free summer mortgage check up now.  We are exactly half way through the year. Are you meeting all the resolutions you made for 2015? Are you on track to meet your financial goals? Are you thinking of:

  1. Refinancing to reduce your mortgage rate
  2. Consolidate high interest credit card debt
  3. Refinance to do much needed upgrades or renovations
  4. Cash out equity to buy a second home or investment property
  5. Cash out equity to start a business or purchase a franchise
  6. Cash out equity to give your kids or grand kids a financial gift

It may be much easier than you think to achieve your goal, so don’t procrastinate.

Schedule your no obligation mortgage consultation with the Ray C. McMillan Mortgage Team to explore your options. 


Two mortgage terms that present solid value (and two that don’t)

Despite 51 per cent of Canadians choosing a five-year fixed rate, you need to at least consider variable and shorter fixed terms. (BOBBY YIP/REUTERS)

Mortgage rates have been all pleasure and no pain for an oddly long time.

Take five-year fixed rates. They’ve drifted lower for more than a year and a half with no significant upturns along the way.

Variable rates have coasted lower for even longer – three years without a rebound. To find a similar phenomenon, you’d have to go back four decades. It’s hard to overemphasize how unusual today’s rates are historically. The low-growth, low-inflation environment gives markets no reason to demand higher interest. That’s why, despite 51 per cent of Canadians choosing a five-year fixed rate, you need to at least consider variable and shorter fixed terms – if you’re well qualified. In that spirit, here are two terms that present solid value in today’s market, and two that don’t.

The Stars

The one-year fixed: Shop around and you’ll find one-year mortgages under 2 per cent. That’s actually lower than most variable rates. The benefit of a short-term mortgage is that it renews more often, improving your odds of exiting the mortgage without a penalty. That’s valuable if you want to sell your property, refinance it, lock in to a longer term or renew at the lowest available rates. Something to keep in mind is that one-year terms are most economical if you need a mortgage for a purchase or refinance. That’s because if you’re merely switching lenders with no other changes to the mortgage, most lenders don’t pay your switching costs – such as legal and appraisal fees – for terms less than three years.

Best one-year fixed rates: 1.99 per cent to 2.29 per cent. Where to find a good one-year rate: CIBC and mortgage brokers, through lenders such as First National Financial.

The three-year variable: Less than 6 per cent of Canadians choose variable terms shorter than five years. Many hesitate to even consider a shorter-term variable mortgage, for fear that it’s somehow riskier. It’s actually the opposite. Three-year variables are usually less risky because you can renegotiate sooner without a penalty. That’s meaningful since the average five-year mortgage lasts only about 3.5 years. If you do have to pay a penalty on a short-term variable, it’s only three-months’ interest.

The biggest knock on three-year variables is the risk of variable-rate discounts shrinking by the time people renew in three years.

But even if they do, you can always move into a low-cost one– or two-year fixed at the time.

Best three-year variable rates: 2.05 per cent to 2.20 per cent. Where to get a good three-year variable rate: Mortgage brokers, through lenders such as Canadiana Financial, Merix Financial and ICICI Bank.

The Dogs

The four-year fixed: The shorter your term, the lower the rate. That’s generally how it works. But these days, most four-year terms are actually priced higher than five-year terms. If rates jump even one percentage point by renewal time in four years, the higher rates in year five could cost you a few grand on a $250,000 mortgage.

If you don’t like risk and you’re sure you’ll need a mortgage for more than four years, get a five-year fixed.

Best four-year fixed rates: 2.39 per cent to 2.54 per cent.

The 10-year fixed: Perennially on the dog list, the decade mortgage is like exercise equipment you don’t use. It sounded good at the time, until you realize you overpaid for it. Ten-year rates have been this year’s biggest disappointment. While interest costs dropped across the board after the Bank of Canada’s January cut, most 10-year rates remains stubbornly high. Taking a 10-year over a five-year means you’ll fork out roughly $5,400 more for every $100,000 of mortgage in the first five years.

Best 10-year fixed rates: 3.49 per cent to 3.79 per cent.

Source: Globe and Mail  

Special to The Globe and Mail

Robert McLister is a mortgage planner at intelliMortgage and founder You can follow him on Twitter at @RateSpy