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It’s Still ‘Never ever
shave even five bps off a client’s interest rate. Estimates are now running close to 95 per cent, as brokers look back at the explosive rate wars of this past spring. first-time buyers, or mortgages that Many start under a professionals turned to have expanded their unsecured lending products. mortgage specific price (remember restrictions in 1992 when What our government fails to realize is that buy-downs to keep clients from taking that the first-time buyer program was implemented? unsecured lending has a larger impact on cash 2.99 per cent Should we look at something similar?) When “Redat BMO. Just as many shook flow than mortgage lending. Particularly when their fists at their own lenders who, they Ed” Clark at TD was screaming for more home ownership has already been proven to be charged, had forced them to do it. government controls on mortgage lending, what more affordable than renting in most areas he was really saying was that lenders can’t police (Vancouver is currently a rare exception). What Today, many brokers simply have no themselves. If bank A will do the dealchoice why can’t they (government) do see is the most powerful but to sacrifice some of their bank us. B? You’ll If Johnny off the bridge, would you lobbyYEAR group LATER in the country saying “it’s mortgage commission to secure a deal, says ONE business from neverjumps win against jump off a bridge? What kind of people do we have lending that is the issue.” Christine Xu, the banks by buying down.” CMP is happy to report that a certain – Paul Therien running our banking system? The real culprit in a broker with Argentum Mortgage As competition theisbanks heatregulated up Mortgage Alliance broker is keeping true this wholewith mess the least and thatand is Finance Corp “I quickly found out that with this and with the market cooling down, it is to what he told us in 2011. They just don’t get it, do they? Economics 101, says credit card debt. Put some sense back in the market, my commission is not important,” put the boots to the credit card lenders, expected that more brokers across “Yes, buy-down rates,” says difficult cool offIastill hotdon’t market by making it more to system, understanding that it will impact economy borrow, heat up a cooling economy by loosening the Unionville, Ont., broker. “I needed country will be tempted to buy-down rates thesays Ad Lakhanpal. “And my reasons for doing significantly, especially retail goods. Gradually upremain lending. We are cooling off in many markets, to trade on volume. in order to ink a deal. Heck, a growing so the same. tightenhave. the mortgage underwriting “standards” that were never as Toronto “Homebuyers in my area will switch number already “Whatever rateasI hot go down to, the and Vancouver. that have been perverted over the last 10 years. Canadian institutional (read bank) mortgage brokers Last year, seasoned mortgage borrower can always go to a bank and ask lending has been on a 10-year roll, like drunks on a Will there be pain? No doubt about it. But aneven over 0.3 per cent. I quickly found that out with this market, my professionals estimated that to 90 per an agonizing for an even lowerby one. I guaranty you that CMHC. pain80now, beats pain bender, abetted their “drinking buddy” I uncomfortable commission is not important.” cent of brokers were prepared to give up a ifagree the bank learns a broker’s involved, later. that a 30-year amortization is too long a portion they’ll a ratebut justmaybe so theyitcan take be theallowed time ingive general, should for of their commission in order to – GTA Broker
buy down rate’ A hard year has broken many a veteran, but Ad Lakhanpal isn’t one: He still never, ever buys down rate
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