Wednesday, June 22, 2011

Understanding your credit score

Your credit score reflects your financial health. It is represented by a number determined by a mathematical formula. Your credit score helps determine if you are a risk to lenders. And good credit is very important to qualify for a loan. In addition to your ability to pay, a mortgage lender will look at your willingness to pay. When you apply for a loan, the lender will consider your credit history before making a decision.

Your credit score is determined by these factors*:
  • Your payment history (do you pay your credit cards on time? Do you miss your debt payments?)
  • Bankruptcy (have you declared bankruptcy in the last 7 years? Has a collection agency had to collect unpaid bills from you?)
  • Account history (how long have you had credit?)
  • Inquiries made about your credit report (how often do people ask about your credit report?)
  • Type of credit you are using (do you carry high balance on your credit cards and/or lines of credits)

Each factor is weighted differently. The most important factors are your payment history, bankruptcy and the amount of your outstanding credit balances.

It's a good idea to order a copy of your credit report before you apply for a loan (so you know what your score is beforehand). As a rule of thumb, you should review your credit report at least once per year to ensure the accuracy of the information that has been collected.

Equifax Consumer homepage
TransUnion consumer homepage

Is your credit in need of repair?
Credit Counselling Canada is an association of non-profit credit counselling agencies across Canada that offer services to help you during financial difficulties. Professional counsellors work with you (on a confidential basis) to review your financial situation, explore your options, help you resolve debt problems and learn how to use money and credit wisely. They will also help you develop a realistic budget to manage your expenses. Click here to find a community-based member agency near you.

Ten steps of the homebuying process

How do I get there? Is there a road map?
Starting the journey to homeownership can be overwhelming and stressful. But with a little planning, you'll get the home that's right for you. A home that strikes a balance between your "wish list" items and the practical realities of the property, location and the housing market. Before you know it, you'll have a place to call your very own. A place to entertain. A place to decorate. A place to raise a family. It really is an exciting time!

To help keep you on track, below is a step-by-step guide to buying your first home.

STEP 1 - Build a Budget
An effective budget will map out your plan to set aside money for your down payment and additional costs. It will also help determine the price of home you can afford. Click here for more information on building a budget.

STEP 2 - Investigate Mortgage Options
There are many different types of mortgages. If you don't have the 20% down payment for a conventional mortgage, you can get a high ratio mortgage, combined with mortgage default insurance, that allows for a smaller down payment. You should be pre-approved for a mortgage before you start house hunting. For more information on mortgages, click here.

STEP 3 - Choose a Realtor
Your realtor will play a vital role in your homebuying experience. The best realtor will be a combination of a personal advisor, consultant and negotiator. He/she will show you homes that match your criteria, guide you through the homebuying process, negotiate the best possible price for your home and deliver your closing documentation.

STEP 4 - Get a Lawyer
It's important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn't hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.

STEP 5 - House Hunting
  • Create a wish list
    House hunting can be a lengthy process. To save yourself time, know exactly what you want in a home beforehand. Think about your immediate needs, future plans and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don't forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you?
  • Bring your checksheet
    When you're ready to begin shopping for a home - often called "house hunting" - bring along this House Hunting Checksheet. You may end up seeing multiple homes in one day. This checksheet will help you compare and keep track of the homes you visit. And help you remember the features you did or didn't like.
STEP 6 - Make the Offer
Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called "signing back" the offer).

STEP 7 - Home Inspection or New Home Warranty
Hiring an inspector is voluntary, but it's a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer.

What is a New Home Warranty?
New Home Warranties are typically used when you buy a brand new home. The builder provides a New Home Warranty to cover things like deposits and completion dates, along with labour and materials for at least one year after the home was built. It also protects you against structural problems for a minimum of five years.

STEP 8 - Finalizing The Deal
Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search.

STEP 9 - Moving Preparations
There's a lot to do before you move. Line up utilities and other services like phone, cable and internet. If you rent, you must give your landlord notice. Also, forward your mail to your new address and hire a moving company. Preparing these things well in advance will help you make a smooth transition to your new home.

STEP 10 - Closing Day
This is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys. Congratulations on your new home!

Monday, June 20, 2011

How to Write Effective Direct Sales Mail Letters

We've all received them. We occasionally read them. However, most end up in the recycle bin . . . But why? They're only a page or two long, and yet many direct mail sales letters are just as dead as the felled log they were fashioned from . . .
Okay, so you've targeted suitable company, found the name and title of the decision maker for your product or service, and the Trojan-like envelope has made it past the always-suspecting secretary/assistant, and the decision maker has opened up the letter! What will your letter read like? The following checklist will hopefully ensure an image to set yourself apart from the pack.
·         Ensure the message matches the needs of the target audience.
Does your offer of products and/or services match the needs of the recipient? Don't make your pitch to a company president if your message only applies to the marketing staff.
·         Get to the point.
If you begin your letter with general, hazy information - you risk losing the reader. It's critical you make your point in those first few lines.
·         Be clear and concise.
"Brevity is the soul of wit" - William Shakespeare. Right on, Bill!
·         Sell benefits, not features.
Many businesspersons love to list and discuss product features. However, your potential customers want to know how he/she will benefit from using the product. It's okay to list features, but also include the end-user benefits. For example, a feature of the word processor is that it allows you to write and edit content electronically, so you don't have to retype the entire page. The benefits are that it saves a lot of time, and increases productivity.
·         Keep it personal and conversational.
Given today's access to current data, there is no excuse for sending out form letters. Personalize each letter you send out in your direct mail campaign. In terms of writing style, just write like you talk - and you're sure to make a warm, genuine appeal to your reader.
·         Use letters to generate leads - not sales.
The goal of a direct-mail letter is to generate a response, not a sale -whether it be a return mail card, a fax, email, phone call, or fax. The purpose is to open doors - the sale is the next separate and distinct step in the process.
·         Write at a grade-school level.
Studies have shown that most of us read at an eighth-grade level. Avoid big words to make the letter easily understood. You can be technical if you choose, but simplify your language as much as possible.
·         Postscript (P.S.) is your friend!
Case studies indicate that the typical letter recipient's eye moves down the page to the P.S. before they read everything in the letter! Try to restate your proposition in the P.S.
·         Use white space.
Readers are often turned off by large gobs of text. Try to use short paragraphs, and bullets and/or numbered lists. Give the reader some breathing room!
·         Keep it to one page.
Most presidents, purchasing agents, plant engineers, and other decision makers are very busy people. Make your point, sell the benefits, make it easy to read - and keep it to one page.
·         Make a "no-risk" offer.
Offer the recipient something - and make it no risk. Offer free information, an article, some industry tips, free tutorial, or product sample.
·         Create a deadline.
Whether there is a real deadline or one you create, make one. Usually, a deadline increases the rate of responses because of the limited amount of time to act.
·         Call to action!
Ask and ye shall receive . . . Why not ask for the order? "Call our toll-free number, 800-555-SALES, for a free consultation".
·         Use postage reply mail.
Include a business reply card for better response. Make sure it has pre-paid postage. Don't lose an inquiry for the cost of a single stamp.
·         Include a guarantee.
If you can offer a guarantee - be it your follow-up, delivery, customer service, or pricing - do it. By offering a guarantee, you offer integrity and credibility to your products/services.
·         Include testimonials.
Nothing speaks louder for your product or services than a satisfied end user. However, if you use names and companies, make sure you get a signed authorization from them.

Database Marketing

Are you new to the mortgage industry or looking for insight on how to market yourself effectively? Below are a few practical tips/steps to help you build your database a get your marketing off to a “smart” start!
Step 1: Build or Clean up Your Database
·         Make a List of Everyone You Know: Don't just list business contacts; include everyone from your dentist to your coffee barista to your child's daycare provider. There are opportunities for business everywhere you look. 
·         Split Up Your List: Now you need to determine who in your database is a past client, a warm prospect, a friend, a cold prospect, a referral source or a business contact. 
·         Include Special Dates: If you can, be sure to include birthdays, anniversaries, hobbies and favorite restaurants in your database. This information will give you all the more opportunities to contact these folks in the future.
Step 2: Reach out to Past Clients
Past clients are gold and should be handled accordingly. These people have worked with you before and trust you. Therefore, you should keep in touch with this group regularly. Statistics show that 93% percent of purchasers are satisfied with the professional they used, but only 11% will buy from them again - because they don't remember their name. Another reason to keep in touch is, they may not be ready to work with you right away but their friends or family may... and if you stay in touch they will remember your name and have your info ready to refer you. Here are some ideas:
·         Offer up a Recipe: Even if you don't like to cook, your clients may enjoy it. Sending a new recipe flyer each month to your past clients not only keeps your name in front of them, but it also offers them something of value. 
·         Tips Are Great: Send a list of Home Tips to your clients each month. Everyone is always on the lookout for helpful and easy ways to upkeep and improve their home or ideas for activities with family or friends or even travel tips, whichever is appropriate. Add some value and fun to their lives.
Step 3: Consider Prospecting a Niche
Are you passionate about a certain target market? Do you love helping first time homebuyers? If so, let them know! Become the expert in your area and begin building trust. Here are three niche markets you might want to consider:
Step 4: Build Referral Relationships
Most mortgage originators who are to producers have proven that almost half of their business comes from their referral sources. If you aren't building strong referral relationships, you could be missing out on over half your business! Here are a few ideas to help you grow your referral source business:
·         Keep Them Informed: Send industry news to referral sources often. They have their own industry to keep tabs on, so help them be up-to-date on your industry by shooting them an email or calling them to tell them existing or new industry news. The News Summary is a great tool to use – and it’s FREE! 
·         Send your referral a Referral: One of the best things you can do is send a referral. Show them you are serious about helping them build their business. You will likely receive a referral from the ones that are serious about helping you too!
Step 5: Supplement for More Profit
Once you are consistently contacting your past clients, prospecting a niche market, and building relationships with referral sources, you may want to begin marketing in non-traditional ways. Here are a few ideas to get you started!
·         Start a Blog: Write about personal and business related topics. Send an email reminder to your clients each week reminding them to read it! 
·         Sponsor a charitable event: Invite your database to participate with you and sponsor a charity for a good cause. 
  • Give away FREE stuff: in, or outside of your office. Make sure your business card is attached!

Tuesday, June 7, 2011

Working With Me For A Mortgage Will....

Help You Save Time and Money!

There are over four hundred mortgage products on the market. Finding the one that’s right for you can be an overwhelming task. So how do you source, assess and determine which mortgage is right for you? That’s where I can help with your refinance, renewal or purchase.

I work on your behalf to find you the best mortgage at the best rate. They have no affiliation to any particular bank or financial institution, which means they are free to consider every product on the market before making their recommendation.

Working with your needs in mind, I will shop the marketplace, saving you time and effort. As well, I already have relationships in place for 17+ years with a variety of lenders making it easier to negotiate favorable terms and competitive rates on your behalf.

I can also help with arranging your property survey, legal fees and closing paperwork while offering advice on any additional costs you may need more clarification on.

Best of all, working with me costs you absolutely nothing! It is the responsibility of the Lender to compensate me with a fee when your mortgage is placed.

By investing a little time now and working with me you will save time and money on your mortgage in the long run.

For more information, please visit my website at

Thursday, June 2, 2011

Mortgage Rates as of June 1st, 2011

Current Mortgage Rates* as of June 1st, 2011

  Variable Rate

  1 Year Closed


  2 Year Closed


  3 Year Closed

  3.52% - Special 

  4 Year Closed

  3.59% - Special
  5 Year Closed H/R

  5 Year No Frills


  7 Year Closed


  10 Year Closed

Rates subject to change w/o notice

Morcan Financial Inc.
Victor Peca lic#M09001613
Mortgage Broker
416 888 4934

Brokers react to Central Bank rate

The Bank of Canada will keep its pivotal overnight interest rates unchanged at one per cent, with governor Mark Carney once again refusing to pinpoint when exactly he’ll nudge it upward.

Tuesday’s move – or rather, the absence of a move – is the sixth consecutive interest rate setting where Carney has maintained the status quo.

He suggested that global economic risks remain in place, although Canada’s recovery continues to chug along.

Inflation’s rise above three per cent – a rate that many economists thought would set off an interest rate hike – should readjust to two per cent by the middle of next year, said Carney, in Tuesday’s decision statement.

Brokers reaction to the announcement was muted, although largely positive.

“It may assist business a little bit,” Bob Smith, owner of Verico K-W Mortgage, told “Had they moved up the rate, it would have further dimmed the outlook for the rest of the year.”

Smith’s brokerage is already grappling with a 10-per cent volume drop from last year’s busy spring season. He wants Carney to hold the rate steady for the rest of 2011, although, like most brokers, expects a move may come as early as the fall.

The Central Bank isn’t tipping its hand, although today’s reprieve will last until the next rate review announcement on July 19.

Still, extending the current rock-bottom rates may do little to encourage the housing market to pick up speed, said another broker.

“Keeping prime at the current rate isn’t going to counteract the many changes that have come into effect over the last year,” Mark Fidgett, owner of Verico Not A Penny Down Mortgages, told ahead of the announcement. “But I do think it will have a more positive effect than raising the rates and getting people interested in buying that way.”

There’s increasing indication that many prospective homebuyers have already made their move, buying ahead of tougher qualifying terms brought in by the federal government in April 2010 and March and April of this year. Simply put, say analysts, there are fewer buyers left to jump off the fence, something reflected in the uptick in business for brokers just ahead of each rule change.
Ironically, said Smith, prolonging the low interest rate could conceivably frustrate originations in his market. "There’s some hesitancy with people who are in a cash postion and ready to buy because they're holding out for lower prices," the broker said Tuesday." But they may find themselves in a catch-22 situation because of the low rates with sellers less likely to drop their prices."

Face to Face Networking

By Stan Albert
“The way of the world, is meeting people through other people” – Robert Kerrigan
It’s an old idea in an era of high speed electronics. But it works!
Is it time to expose yourself to others in your business? In the age of Twitter, Facebook and YouTube, I still think it is wise to go to networking meetings where you actually “touch the flesh.”
Back some 40 years ago, that’s what I had to do in order to build my database or my sphere of influence (SOI).
From the Sales and Ad Club to being on the Industrial Committee to being vice-president of the newly chartered Jaycees, I went to places were I met people of influence or those who were simply just interested in investing in real estate for the first time.
It seems to me that social networking is too cold and impersonal to make the similar contacts. Albeit, those systems are faster and less time consuming, but in my opinion they lack the personal touch. I refer to Jonathan Cainer’s Your Stars syndicated horoscope column: “We all see life from a different perspective and we are all ‘blind’ to some extent…”
Don’t be blind to these networking ideas:
1. Attend as many non-real estate functions as you can at least twice a month. Go with a buddy. You two will be the only Realtors at an engineers’ luncheon. With usually eight people at a table, someone will ask, “What are you doing here?” or “What engineering firm are you with?’ Just simply respond that the subject matter was of interest and that you and your friend wanted to learn. And isn’t it normal for all of us to then hand out our business cards? But wait until the rest of the table gives you their card before you give them yours.
2. Have a complete plan for the year. By attending at least two functions a month, you will have over 100 new prospects in your SOI. Add those to your existing files. Always ask permission to stay in touch by email, phone or hard copy mail. People of all ranks want to know about the local market.
3. You should know who your original contact was and seek them at the event and thank them for allowing you to attend as a guest. (Note: Most of these events will welcome guests at a small additional charge)  If you figure out the cost of advertisements versus a dinner or luncheon to capture more leads, it’s a no brainer!
4. Be cordial at all times and thank the fellow table members for their information and wish them well in their future business.
5. Follow up within a week or so with a personal hand-written note thanking them for the opportunity to meet with them and to learn something new. As an additional follow-up, send them an email newsletter outlining what’s going on in their area.
None of this is new. It’s been done before, but I see many new and struggling to build their business with limited capital resources to send out marketing material. I pass this on to not only new people in the business, but for those who want to be renewed!
In closing, I quote from Cainer’s column again, since I think his recounting of an adage is quite appropriate: “There’s an old Indian tale about three blind men who come upon an elephant for the first time. One inspects the beast’s trunk and concludes it’s a snake. The next finds the leg and concludes it’s a tree. The third finds the tail and concludes it’s a rope.” The moral, Cainer says, is that we should always look at life from a different perspective, “because none of us truly grasp what’s going on in our personal and as well our business life.”
Trust me on this one – in spite of the wireless era, many people have made this system work – and very successfully I might add.
 Stan Albert, broker/manager, ABR, ASA at Re/Max Premier in Vaughan, Ont. can be reached for consultation at Stan is now celebrating 40 years as an active real estate professional.