29 Mar

THE TRUTH ABOUT LINES OF CREDIT

General

Posted by: Ron Price

Line of Credit(LOC) are popular products pushed by the banks because they earn better interest for the bank than variable rate mortgages and human nature being what it is, people have difficulty paying them down. Most new clients are unaware their LOC may be secured against their mortgage. The positive side of LOC’s is that they ‘revolve’ which means as you pay it down, the difference between what you have used and what’s left is available to borrow again and again. People like the flexibility of being able to borrow and not have to go through an approval process over and over. And there is no penalty for paying them out. If you are in the market for a line of credit we have better rates than the bank branches right now with one of our lender’s offering only .25% above prime(we deal with 47 including all the major banks, non banks and credit unions) So it’s easy to switch you out of your LOC and into one at a lower rate.                                                           

Personally, we are not big fans of LOC’s because people are forever in the ‘banks clutches.’ We call them sleeping lions because one day you wake up and realize you’ve chewed through all the available limit. The more sinister side of LOC’s is that they give you additional purchase power, and make you ‘feel’ like you have more income than you do. They allow you to spend recklessly all on credit.

Doris had been paying on her LOC for several years trying desperately to pay it off. She was making weekly payments but every time she picked up a statement she couldn’t figure out why the balance was not going down. She came to us armed with her LOC statement. We determined that her ‘regular’ payment was actually not covering the interest(a liittle bank trick used when there is excess room on the line) We also saw that she had also signed on for a big life insurance premium on the outstanding balance. With all kinds of equity in her home, this made no sense at all especially when she was trying to pay off her house prior to her retirement. That money would be better spent paying down her mortgage. When we pointed this out to her, she said “I am so done with the bank.” And she too did not know that her LOC was registered as a first mortgage on her house.

Doris wanted us to tell her story to educate others and she added “I wish I had called you guys sooner.” We were able to get her .7 below prime on a 10 year mortgage. Doris is adamant on getting the mortgage finished before she and her husband Nick retire, now she can have the mortgage paid off taking advantage of the 20 per cent pre-payment privileges on the new mortgage we found for her. If you need help with your situation, drop in to our Fergus office across from the old high school or give us a call. We are always ready to help.

22 Mar

A ‘MORTGAGE’ THAT WILL ‘MOOOVE’ YOU

General

Posted by: Ron Price

We are delighted to announce that THE PRICE TEAM now assists home buyers with moving expenses.; We aim to make the home buying process as convenient as possible” says Tracy, and we love, absolutely love helping to educate first time buyers on the entire process. We will assist you in selecting service professionals by recommending a top notch realtor, home inspector and lawyer. We will also help you with home and mortgage(protection) insurance. And now, we have added another ‘value added’ service, our moooving assistance program.

The early spring housing market is warming up nicely, and fixed mortgage rates have once again come down. The newly reduced maximum amortization period of 30 years means that buyers(incomes being equal) qualify for about $30,000 less in purchase price than before i.e. $295,000 vs $325,000. But rates are still at near all-time lows, keeping housing affordable.

If you are a first time buyer, have us pre-approve you asap. Forget the bank because you cannot rely on their preapproval; they do not verify your income, or check your credit. If you want to avoid a nasty ‘surprise’ have us preapprove you. We are more thorough, and guarantee you success. In effect, we protect you against rate inceases, and we take all the time you need to become comfortable with what to expect AND MOST IMPORTANTLY, we will save you time and money by helping you put together all the sevices/products you will need. Think of us ‘truly’ as your one-stop-shopping source for home buyers.

If you plan to move in the near future, or you know someone who does, do yourself/them a favour by calling us today to learn about our wonderful home buying services. And remember, our services are at no cost OAC.

DID YOU KNOW: If you have no down payment, we still have 5% cash back mortgages, and if you have the minimum 5% but lack closing costs, we have a mortgage product that includes 2% cash back to cover.

18 Mar

THE BANKS ‘FALL’ FROM GRACE

General

Posted by: Ron Price

It’s insidious and it’s just plain wrong when your bank uses the guise they are helping you when in actual fact they are hurting you. When the banks are doing everything in their power to rob Canadians of their financial wealth with their interest, fees, penalties and ‘tricks’, it’s time to stop trusting the bank. We can’t sit by and watch this happen. We have to speak out for the little guy just trying to make it from paycheck to paycheck, and we are trying to make a difference.                    

Sheldon a police officer and his wife Cecilia, a stay at home mom called last week. They own a modest home, live a modest lifestyle, have excellent credit and count their pennies. In other words, very solid, responsible people. He even works part time to keep up with the bills, while Cecilia is off work. They had a mortgage and a line of credit and no other debt. Last November, the bill for the line of credit came in advising they didn’t need to make the regular $75/mnth interest only payment. So they didn’t. December same thing, so they didn’t. When January’s bill came in, the amount payable was $545. The clients were shocked and couldn’t make the full payment so they paid half. February’s bill came in at $545 plus $272.50 from the previous month’s balance. So now $817.50 was owed which was over ten times the previous ‘regular’ payment amount. They called the branch to find out how this could happen. The bank told them that they had the right to change the payment from interest only to a full interest plus principal payment, and went on to tell the client f they could not make the payment they could borrow from their line of credit to bring the account up to date. Incurring debt to pay a debt was the bank’s advice. Now there is a good(advice)             

We had no difficulty combining their mortgage and line of credit into low rate mortgage at a affordable monthly payment. Sheldon has since closed their line of credit, left the bank and took their accounts to a Credit Union because, as he told us, “we can’t trust the bank anymore.”        

Consumers at large need to wake up and smell the coffee. The banks were once our friends, but it seems, not anymore. Remenber when you could sit down with the branch manager directly and get a loan? Not any more with centralized authority. And remember when the banks used to go out of their way to help you, when you had an ‘issue’. Not anymore. Those days are long gone. Never mind them holding your cheque for 7 days. The federal government just passed new legislation, among other changes, reducing the banks cheque ‘hold’ practices to 4 days. Thanks a lot. Big deal. Unfortunately te Feds did Absolutely Nothing about the unconscionable bank mortgage penalties, and the complete lack of accountabiity that prevails today. In other words, the smoke and mirrors continues with the banks not having to reveal how they calculate the penalties. Never mind the fees, the high interest, and the high loan payments they put you under stress with. Now it appears, deceit has entered the fray on top of ‘greed’ And as we wrote about previously, the new ‘Collateral Mortgage Products’ the banks have introduced, allow them to register the mortgage at 125% of property value, and the right to increase the interest rate to Prime+ 10% if they feel like it’ This gives them ‘carte blanche’ authority and control over you. Moreover, it is extremely difficult and expensive to get out of it if you need to. Do you think they’ve gone too far? We sure do.                                                

We are here to protect you. Isn’t it time to choose the Price Team, as your trusted financial advisor. We get you off the path to debt and into the plan for wealth. We’re just a phone call away(we will answer our phone, Live) or stop, by our office on Tower Street South across from the old high school in Fergus. You’ll see our spokesman Don Cherry in the doorway. Hate or like him Don Cherry shoots from the hip(tells it like it is just like us. By the way, our services to you are fee OAC.