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  • On-Line Mortgage Shopping, Is it All It’s Cracked Up To Be?

  • It almost seems like yesterday for me when we were typing legal mortgage documents on carbon paper.  You definitely did not want to make a mistake, since they were difficult to fix and in more cases then not had to be started over.  Today, thankfully everything is done with a computer.  Most interesting is that consumers can now shop on-line for a mortgage, and why not?  It is very easy to try to navigate for information on Canada’s mortgage market.

    Other reasons for on-line growth are attributed to:

    • Continued online growth for all products including mortgages
    • Best rates and catchy advertising has lured in clients
    • Saves precious time, especially for professionals
    • Millenials peer pressure has resulted in this shopping to be quite normal

    It does not hurt that consumers are not afraid to e-mail personal information.  In fact, in a recent study;

    • 86% of homebuyers felt safe, sharing personal information on-line
    • 71% have submitted private documentation via e-mail
    • 50% have scanned documents on line

    This all sounds good because generally speaking it is our future.  But just because this is where we are headed, it does not mean it is a perfect system.  There is and will be bumps along the way.

    Some of my own mortgage clients in the Hamilton area have shopped the rate sites and ask me if I can match the rate.  In most cases I can, but the problem is just because you have the lowest mortgage rate, it does not mean the product is beneficial to your needs.  Some of these low mortgage products are different in these ways:

    • Limited prepayment privilege
    • Inferior mortgage terms
    • Huge penalties to exit the mortgage
    • Product limitations

    Here is an example of a recent client of mine who has one of these special products.  Through no fault of his own, he had to get out of the mortgage early on a variable rate product.  Normally the penalty would be 3 months interest on a $400,000.  This would amount to approximately $3,000.  Well in his case, the penalty was $12,000.

    We take great pride at Robert Floris’ Hamilton office to explain mortgage details and answer all questions.  We also break down all the legal talk to help you better understand especially when clients receive a bunch of documents.

    Most importantly we help teach what is really important, namely cash flow.  Believe it or not we teach mortgage clients to pay themselves first.  This is generally more important in a family’s financial well being.  Why? Because something always comes up; car repairs, kids’ sports, renovations on homes, trips, etc.  Do you really want to use credit cards for these activities?  Secondly, our biggest lesson is how to use their low mortgage rate.  How? To focus on amortization as opposed to rates.  This is the hidden secret where great savings are.

    We want to be the most trusted mortgage broker in Canada and although on-line is the future, never forget to learn.  This is your mortgage, learn to manage the money.

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