Mortgage Myth # 4


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Who cares about money?!

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Everyone of course but, why does no one like talking about it? Why is money such an uncomfortable subject? For Example: When was the last time you asked yourself 'Why do I use my bank?' Probably never. You set up an account when were 12 and you've probably never changed banks since. What do you think your bank is paying you for keeping your money with them? If it's more than .10%, you're above average! Online banks like Tangerine or EQ Bank offer as much as 2.00% for a regular savings account. Think having a local branch is convenient? When was the last time you visited your branch? Only time I've gone in in years is because my bank (BMO) still doesn't offer mobile cheque deposits. About the only unique product the big banks offer is unsecured lines of credit. Otherwise, literally almost every other money product can be accessed elsewhere. I don't work for Tangerine or EQ Bank or any financial institution, I just think it's time people start caring
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Just like a mortgage, the small differences in interest rates from one option to the next won't make a huge difference month to month. Over several years though, it can add up substantially! Example of a savings return of .20% vs 2.00% interest: Say you started with $10,000 in savings, plus you deposited an extra $200 each month. At .20% interest you'd earn an extra $172.59 after 5 years (...wow). At 2.00% interest you would earn an extra $1,780.30 in same 5 years. This is simply by doing the same thing you were already doing at your current bank but, you'll get back an extra $1,607. In a little more than 10 years it would turn into an extra $5,000. This is also partly thanks to  compound interest . The thing is, if you've built up a savings account, you've worked hard for it so you'd be silly to not make your money continue to work hard for you. I would agree that finding the best place to invest your money may be tough but, finding a better place to h
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One of the most frustrating things I hear about in the mortgage industry is learning about people who have been 'pre-approved' at their bank branch only to find out later they actually can't qualify for a mortgage when the time comes. 'What?! How can that happen?!' you might ask. I'll explain... First, the bank branch (for some very odd reason) doesn't actually review an applicant's credit bureau when they're applying for a mortgage (again, this is odd and I can't imagine why). Instead, only their history as a client with that particular bank is reviewed. Now, even if the bank never cared to check a person's credit bureau before actually providing them a mortgage (which would be silly), an applicant buying a home with less than 20% down (which is most home buyers) also needs to be approved by one of the 3 mortgage default insurers (CMHC, Genworth or Canada Guaranty) who have many strict credit bureau requirements. Again, why they d
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