2021
Podcast: Demystifying the role of Independent Mortgage Brokers
It could be one of the most important transactions of your life. So, who are you trusting to help you out?
Increasingly, people are turning to Independent Mortgage Brokers when they buy a home.
Statistics from the Canadian Mortgage and Housing Corporation showed that 49% of Canadians used a mortgage broker (as opposed to a lender) in 2019. That’s up from just 36% of Canadians in 2018.
With the housing market intensifying in over the past 20 months, the stakes – and your down payments – are higher than they’ve ever been.
To "demystify" their role, we're joined by Independent Mortgage Broker Vik Sahi on the latest episode of the Wealth Wisdom Podcast to talk about what exactly he does for his clients. Vik also gives an overview of the mortgage landscape in Canada heading into 2022.
You can listen to the entire episode through these avenues.
Or, you can check out the entire video podcast on YouTube.
Here’s a summary of what we talked about on the latest episode.
Banks vs. Independent Mortgage Brokers
Let’s start with one of the basics: banks versus independent mortgage brokers.
Traditionally, most people would go to their local branch if they were taking out a mortgage. Recently, that trend has shifted.
More people are using the services of an independent mortgage broker when they go to buy a home. Vik tells us more about the key distinctions between the two.
The “Free” Service
You know what they say, nothing in this world is free.
Vik explains here how Independent Mortgage Brokers are paid for the services they offer.
The 2022 outlook for fixed and variable rates
Last year, mortgage rates in Canada were at an all-time low.
This Financial Post story from September of 2020 noted that a five-year fixed rate could be found at 1.64%. By the end of 2020, that number was down to 1.39%, according to Canadian personal finance blog, RateHub.
It’s not a bold statement to say that really, there’s nowhere to go but up.
Vik gives some information on current rates he’s dealing with in the clip below here.
One myth about variable rates
While rates may be on the rise, there’s one important myth to debunk regarding variable rates.
The dangerous trend of going “subject-free”
According to Vik, every one of his clients right now wants to go “subject-free.”
That’s a disturbing trend.
One of the downsides of this red-hot real estate market – aside from record-breaking unaffordability – is that most buyers are being forced to go subject-free.
With sellers able to get their way, buyers are having a hard time successfully bidding on a home if subjects (such as financing or an appraisal) are included in their offer.
According to The Real Estate Council of BC (RECBC), complaints doubled in Q1 of this year, in large part due to the fact that buyers were essentially being forced to go subject free in order to secure a home.
Vik and I share some facts and thoughts on going subject-free in this clip here.
I’m not that old…
Sorry Vik, we can’t invite you back on the podcast now…
Next Guest
Jokes aside, our thanks to Vik for joining us on the latest episode of the Wealth Wisdom Podcast. This is an episode we’ve been wanting to record, especially after having local real estate agent Steve Saretsky on the podcast earlier this year to chat about the housing market.
As your trusted advisory team, making sure you’re aware of current trends in the housing and real estate market are all play a part in piecing together the building blocks of your future.
With the year coming to a close, we’re going to welcome Senior Vice President & Global Strategist at Signature Global Asset Management, Drummond Brodeur, onto our first podcast of the New Year to talk about the market outlook for 2022.
Thanks again for tuning in throughout our first full year of publishing the Wealth Wisdom Podcast. If you like the show (or even if you dislike the show), we’d love to hear your feedback.
Until then, Merry Christmas and Assante Sana
John Lawson (Senior Wealth Advisor, CFP®, CIM®, FEA)
Assante Capital Management Ltd.
Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.
