3 Reasons You Should Consider Switching Banks

There are many options when it comes to banking, but when it comes to financial services, people tend to stay loyal to their current institutions. The time and effort it takes to switch financial institutions often prevents many of us from making a change. Here are 3 reasons why you should consider switching banks today.

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Fees, Fees and More Fees

A bank that is nickeling and diming you all the time is eating into your savings and draining your bank account. It isn’t reasonable to charge you a constant stream of fees to hit the ATM, get cash back at transactions or even check account balances.

There are material and handling costs when new checks and debit cards are made, so fees there are reasonable. Account maintenance fees are common if you don’t maintain a minimum balance or arrange direct deposit of your paycheck or pension checks at the bank. If you’re maintaining a sizeable balance there and they still bill you to manage the account plus every little transaction, you should look for someone who won’t charge you continually to keep your money there.

Security? What Security?

A bank that has suffered a security breach is not unique. What can differ radically is the importance banks put on security and how they treat affected customers. Banks that don’t bother securing ATMs from skimmers and make customers jump through hoops when they think their account information has been stolen aren’t worth your time, though it may take a while to transfer your remaining assets to a new bank. If your bank has been lax on security and slow to provide assistance, switch.

This is aside from whether or not the FDIC covers the bank. If the FDIC doesn’t cover the bank, it isn’t a legitimate bank. Note that the National Credit Union Share Insurance Fund offers the same protection for credit unions. If no such group insures your money, move it to a real institution now.

Not Rewarding Your Loyalty

If a bank doesn’t care about your loyalty, you should consider going somewhere else. For example, refusing to look at a ten year history of never bouncing a check and then having hefty fees applied because they processed your bills before your deposits is failing to reward your loyal service, much less provide customer service. Bad or non-existent bank loyalty programs can be a factor in deciding where to go as well.

Remember that you need to be careful about the rewards they give, since a “cash back” or “point rewards” credit card comes with a higher interest rate. That means the $5 cash back on that $500 purchase comes with several dollars more paid in interest on the borrowed money, and you’re spending ten thousand dollars to get that “free” plane ticket.

Just because you’ve been with a bank since forever, doesn’t mean that you shouldn’t consider switching. If you feel like your bank is neglecting you, or that the fees don’t match the benefits, you should consider switching banks right away.

The Loonie and the Greenback: A Tussle for Dominance

Some surprising developments have taken place in global currency trading markets this month. On Thursday, 2 November 2017, the Bank of England (BOE) and its Monetary Policy

Committee (MPC) voted by margin of 7-2 to raise the bank rate by 25-basis points. This pushed the UK interest rate up to 0.50%, from historic lows. It was also the first time in 10 years that the Bank of England moved to raise interest rates.

This is a significant decision which has far-reaching implications for the UK economy, and currencies that trade against the sterling. When interest rates rise, speculators and currency traders tend to purchase that currency, given that it becomes inherently more attractive than competing currencies. Unfortunately for the GBP, conventional theory has not held true.

CAD Jumps as BoE Raises Rates

The AUD and the CAD both spiked against the GBP in trading sessions earlier in November. Unfortunately for sterling, the Bank of England statement to the effect that the currency markets had already priced in the interest rate hike and possible future rate hikes softened any growth prospects for the GBP. The statement issued by Mark Carney – BOE governor – had a negative effect on the currency.


Carney failed to mention the need to increase interest rates at a rapid pace. The BOE cited tightness in labour markets as the reason for the recent rate hike, yet scant mention was made of this or possible future rate hikes after the 25-basis point movement in November. Recently, inflation figures for October were released, and they also surprised markets. The UK’s CPI inflation remained unchanged at 3%, the same as the September reading. This dampens expectations of future rate hikes by the BOE and it’s MPC, and downgrades any growth prospects for GBP bulls.


For currency traders, it’s all about future projection. According to Olsson Capitaltrading expert Kyle Courtney, ‘…the lack of guidance on additional rate hikes is deeply concerning. As a GBP trader, you take your cues from BOE governor Mark Carney, and it’s not only what he says that matters – it’s what he omits from statements that speculators are looking at.

Where to next for the GBP and the CAD?

Canadian traders seeking to go long on sterling will be looking carefully at the Bank of England governor and any talk of additional rate hikes in 2018. For now, it doesn’t appear likely that the Bank of England will act. The current interest rate in the UK is 0.50%, and this is 0.50% lower than the bank rate in Canada. Recall that in October 2017, the BOC retained its interest rate at 1%.

For 2017, the Bank of Canada has already raised rates twice, in July and in September. Provided no additional rate hikes take place, neither the loonie nor the GBP will benefit from Central bank activity. Leading up to the bank rate hike in Canada, the central bank indicated that the economy was heating up. Since then however it has cooled to a degree, tempering expectations of further rate hikes in Canada.

Based on the current economic realities in Canada, the monetary policy decision-making processes are deemed correct. The Canadian economy does not require monetary stimulus at this juncture; currency traders will be eyeing the Monetary Policy Report for indications of which way the CAD is likely to move against the USD, the GBP and the AUD. If expectations prove true, the economy will expand by 3.1% through 2017, and slow to 2.1% GDP growth next year.

Canada’s economic policies have tended towards protectionism, and with NAFTA in doubt, further contractions in overall economic growth could be on the cards. There is little urgency to hike the bank rate in Canada at this point in time, as that would cause a contraction in economic activity at a time where uncertainty is growing. At the time of writing, the CAD/USD pair was trading at 0.7825 up from 0.74 at the start of the year. The CAD/GBP pair is currently at 0.59364 with no noticeable appreciation in 2017.

Ordering Custom Cheques: The Easy Way

It turns out that the interest in business and personal custom cheques is growing every year. This is quite natural because many individuals and organizations have realized how useful this type of cheques can be. For instance, with their help, people can remain in their spending limits. In addition, they are usually much safer compared to credit and debit cards. Some people love them because they can help them reveal their personality. To put it in simple words, people can create something unique. The good news is that there are many customization options related to these cheques. In case you want to order custom cheques, you should definitely take some time to analyze certain things. This is the only way to ensure that you will get the most from these trendy items.

Select an adequate design

As we have already mentioned, there is a wide range of themes, styles, and shapes that are provided by cheque printing companies. If you select a serious company with a good background, you can expect a selection of professional themes and styles. In case you are not interested in creating a personal design, then you should feel free to select a premade design offered by the company. Of course, you can add a personal touch to these cheques too. Once again, it would be better to stick to well-established companies that have different premade designs for their clients.

Design customization according to your needs and requirements

The market is full of cheque printing companies which are providing a comprehensive customization feature to all their customers. With the help of this feature, you will get a chance to create a cheque that you can call your own. In case you are interested in using this option, you should know that you can customize literally every element by choosing a design and adding different fonts, images, graphics etc. Keep in mind that if you are using visual elements like images, you have to avoid copyrighted images. Another good advice is to change the background of the cheque to make it look more original.

Use security features

It is possible to get custom cheques with extra security features. In this way, you can prevent forgery and avoid situations that can harm you and your organization. Before you place an order ask the manufacturer about the security features they are offering.

Talk to a bank representative about the customization

It is necessary to talk to a bank representative before cheque customization. This is necessary because there are banks which accept only specific designs used in business and personal cheques. So, design cheques that your bank will accept. Even though the customization process is virtually limitless, you should avoid adding every element you can. It is not a good idea to create a cheque that will look too extreme or extravagant. Unleash your creativity, but consider the bank’s requirements.

Hopefully, this article will help you make the smartest moves when ordering custom cheques.

Top Reasons to Avoid Using Canadian Banks for Money Transfers

Money transfer operations are a big business in Canada. Prior to the Internet boom and the rise of Fintech enterprises, banks dominated the international money transfer scene. Typically, the cost of wire transfers in Canada is substantially more expensive than it is in Europe and elsewhere. As a case in point, the Royal Bank of Canada can charge upwards of $20 for outgoing wire transfers for bigger amounts.

The rising bank costs of sending money abroad are a disincentive to everyday folks who are looking for efficient ways of converting CAD into EUR, JPY, ZAR, USD or other currencies. There are less expensive options than the UK and Canadian banks, such as credit unions but even their cost structures cannot compare to reputable international money transfer services companies. Truth be told, the transfer fees are relatively insignificant and Canadian banks don’t have commission per se. The real costs involved in currency transfers lies in currency markups.

What Are Currency Markups and How Can You Avoid Them?

By far the biggest cost component of any Forex transaction is currency markups. This relates to the exchange rates of the currencies. Assuming an official exchange rate of 1.248 for the USDCAD pair, you would receive CAD$1.248 for every USD$1 you spend. For every USD$1,000, you would receive CAD$1,248. If a bank decides to offer you a rate of 1.205 on the USDCAD pair, it means that you will receive $1.205 for every USD$1 that you are exchanging for Canadian dollars. The profit markup of the Canadian bank is determined as follows:

1.248 – 1.205 = 0.043 divided by the market rate (1.205). This results in 0.0356. We now multiply this figure by 100 to get the percentage markup on the bank’s rate. In this case, it is 3.56%. Now, let’s assume you were traveling from the US to Canada, you would be subject to a markup percentage of 3.56% on currency exchange. As you can tell, the wire transfer fee is insignificant. It’s the markup fee that really matters here. With a $100,000 transfer, you would receive 3.56% less than the official exchange rate. That is CAD$3,560 less on your US dollars.

Experts advise currency traders to shop around for the best rates at the bank and non-bank foreign-exchange providers. It is important to calculate things like markups and how they differ from the official exchange rate with all transactions. Excessive markups should be avoided at all costs. Banks make their money by widening those margins as far as possible, and that’s where they catch you when you’re transferring money abroad. Anytime you receive less money for your money, you are being fleeced by banks and Forex providers. Shop around to narrow that gap as much is possible.

The cost of transferring money to/from Canada to another country should not be determined by the profit-making desires of big banks. Personal and business money transfers should be facilitated by way of efficient, cost-effective, and secure international transfer mechanisms. Nowadays, senders have figured out that the best ways to transfer money abroad are not banks – they are international money transfer services. For starters, clients should only utilize fully regulated, secure and reputable money transfer facilities.

Top-tier companies like WorldFirst, Moneycorp, and others have won plaudits from users around the world. Companies like WorldFirst are ideal for transferring money from Canada or the US, with some 150+ currencies supported, a quick and easy registration process, and no fees levied on transactions over $10,000. With a 97.8% customer satisfaction rating from reputable review sites, companies like WorldFirst are far more efficient than banks when it comes to satisfaction, affordability, and user-friendliness.

Money Transfer Services

People who are looking for ways to move money from the UK to Canada will naturally be interested in comparing High Street banks like HSBC and Lloyds to international money transfer companies. A myriad of leading companies now exists, and banks are having to play catch-up with the cost-cutting methods employed by money transfer companies. There are reasons why money transfers abroad come at such a high price. The localization of individual firms is an important point.

Nowadays, most companies in the business of transferring money abroad do not have local offices outside of the United Kingdom. They cater to UK patrons domestically, but on the other hand – the receiving end abroad – there are few if any local branches. By contrast, if a company has local branches abroad, it stands to reason that customer satisfaction levels will be much greater, the efficiency of operations will be enhanced, and the process will be expedited without any hitches. And the currency markups are minimal at these non-bank providers, and that’s precisely where people save money.

When companies have local offices abroad, it is possible to avoid intermediary fees. This makes it much easier to gauge precisely how much the overseas recipient will be receiving once the funds transfer takes place. The best advice offered by professionals is to always seek out money transfer companies with offices in both the UK and in Canada. That way, you can save more on every transfer. There are 3 primary reasons why people use currency trading specialists, notably for personal payments purposes, immigration purposes, overseas property, and mortgages. If you are living and working in a country with a strong currency, it makes sense to use that to your advantage to pay off your mortgages and real estate abroad.

Avoiding Bank Fees: A Quick Tip

Money transfer companies can help in this regard. Consider that the cost of bank drafts from one country to the next can range from £15 – £30 in the United Kingdom, and upwards of $50 from the United States. By comparison, the money transfer companies we have listed do not have any fixed fees. They also don’t have any commissions, while banks charge a commission between 0.1% and 2% of the total amount you are transferring. The theory states that if you’re sending money abroad on a regular basis, you could be looking at markups as low as 0.1% overall, whilst with banks, the overall fees including markups could range from 1.5% through 4%. On a £100,000 transfer, that can be as high as £4,000 with banks. That’s why people are switching from banks to non-bank currency transfer services.

Student Loan Debt Delaying Homeownership by 7 Years

The National Association of Realtors and American Student Assistance finds that the median student debt balance is $41,200, leaving millennials to delay marriage, having children, retirement savings and homeownership.

The study finds that the homeownership is delayed by as much as 7 years for millennials.

Just 20% of respondents to the survey owned a home, with the average respondent earning $38,8000 annually. Over half of those that responded to the survey had over $40,000 in student loan debt, with 79% of all respondents borrowing money to pay for their education.

The survey found that 83% of non-owners put the blame on student debt for delaying their home buying. Students who do own a home are also holding off on buying a better home because they can’t afford a higher mortgage along with their student loan requirements.

“Although some banks will approve a loan with a back-end debt-to-income of up to 50%, most won’t tolerate anything over 36%,” states Refinance Student Loans.

The data, compiled with completed surveys from 2,203 borrowers, is accurate as of April 2017. First-time home buyers is on the decline, falling from a historical average of 40% to 33% in the past three years.

Homeownership isn’t the only sacrifice of millennials, according to the survey.

Eighty-six percent of millennials have made career sacrifices, which may include staying in a position they dislike or taking a second job to repay their loans. Over half of those who responded also delayed starting a family and continuing their education due to their loan repayment requirements.

Millennials are also forgoing marriage because of debt. Forty-one percent haven’t gotten married yet because they have too much student debt.

Retirement savings is also suffering. Six-one percent of the 2,200 respondents haven’t saved for their retirement at all. Some thirty-two percent of respondents contributed a reduced amount to their retirement and were only able to contribute some of the time.

Student loan debt is up 150% over the last decade. Debt has increased by $833 billion in the last decade, swelling to over $1.4 trillion dollars in the span. Student loan debt is the second-largest expense behind purchasing a home.

Delinquent student loan payments are down 3% in the past decade.

A survey by Citizens Bank found that 36% of student loan debtors said they would not have went to college if they fully understood the student loan debt they would incur. Experts suggest that higher education is worth the investment because the debtor’s income will be higher over the course of their career.

DasCoin – The New Sheriff in Town

You may or may not have heard about the cryptocurrency called DasCoin. If not, you will soon. While it is one of the newer players in this space, it is going to take the world by storm. It will be the new sheriff in town.

If you haven’t heard about DasCoin, you probably have heard about Bitcoin. Bitcoin is a cryptocurrency meant to bring down the power base of governments’ control over money. While Bitcoin did a great job towards this end, it is not without its problems. The fully decentralized nature of this cryptocurrency has led the way for money laundering on a large scale, among other problems.

Problems with Bitcoin

The Bitcoin infrastructure is a decentralized architecture. This is a fancy way of saying there is no one person or group who controls it. Contrast this to a fiat currency of governments. Each government body via their central bank sets the rules for the currency of its respective government and its citizens. When there are improprieties within the system, the government tries to step in and enforce the rules. In the banking world, there is a concept known as Know Your Customer (KYC). Essentially, this requires bankers to get to know their clients so that when certain transactions seem out of place, the bankers should question them. This helps to catch any inappropriate activity early on. The banks are required to alert these activities to the central bank or the government.

Bitcoin has no KYC. This means there is a black hole of sorts in the architecture. While it was set up in this manner by design, the tradeoff is no governing body can step in and police the actions of its participants. Money laundering via the Dark Web has proliferated due to this.

Bitcoins mining practices have come under fire of late. The mining is done by individuals who can solve mathematical equations. Each time an equation is solved, bitcoins are mined and given to the programmer responsible for solving the equations. Each time an equation is solved, the next equation becomes a bit more complicated to solve. In the early days, anyone with a standard PC or Mac could solve these equations.

Due to the growing complexity, mining currently requires high-end computing with building-sized rooms to solve. This requirement has led developers to pool together. While on the surface, this may seem both logical and practical, it has led the Bitcoin community to suspect collusion among developers. Once this collusion occurs, it eliminates the advantage of a decentralized architecture. The collusion has no one to police it, making it somewhat worse than fiat currencies.

Contrary to what many bloggers and media outlets claim, bitcoin is not universally accepted. While the number of establishments accepting bitcoin is growing, it is not growing quick enough to become the ubiquitous replacement of fiat currencies. It does have the advantage of being the early adopter of the concept. However, due to the decentralized architecture, there is no group making a push to gain worldwide acceptance. Any establishment that signs on to accept bitcoin does so without suggestion from a sales force or group wishing to spread the concept.

Should We Revert to a Gold Standard?

Several countries were on a gold standard. This means that each dollar printed had to be backed by a certain amount of physical gold. This was certainly an improvement from earlier periods where gold coins were minted as a currency. These coins were prohibitively heavy which made transporting problematic.

Pegging paper-based currencies to gold took away the need to lug around carts of gold to make big purchases. However, these paper currencies were still on the gold standard. This prevented governments from frivolous spending with little regard for the consequences. In other words, they needed to be accountable for their spending.

One downside to a gold standard is there is a finite supply of gold in the world. While that may seem ideal to curb government spending, it suffers as populations grow and the needs of the government to serve these populations get squeezed.

The biggest problem with not having a system such as the gold standard is that governments can print money like it’s going out of style. This action debases the currency and decreases the purchasing power of citizens. This concept is inflationary and is one of the main reasons cryptocurrencies are proliferating.

Another subtle ramification of inflation is that it benefits debtors. The value of the loans is repaid with inflated dollars. In the modern world, most governments are huge debtors. For them, inflation is a godsend.

Why DasCoin?

The creators of DasCoin took all of the above factors into consideration when they developed their cryptocurrency. The infrastructure of DasCoin is what is considered a hybrid. The blockchain is a combination of decentralized and permissioned. Essentially, this means that the users of the system still have the benefits of decentralization. However, those users must be given permission to use the system in the first place. This permission-based system is done through a central body, and allowable actions are codified into the system.

This centralized approach allows DasCoin to satisfy KYC, which means governments are more likely to support the concept. When you gain government support, you can use that benefit for enforcement should the need arise. The governments are also less likely to pass laws that will adversely affect the DasCoin movement.

DasCoin has a large financial backing, and it is happening on a global scale. The creators are setting up the system to be accepted by millions of establishments right from the start. This acceptance removes the chicken-vs-egg problem that plagues other cryptocurrencies, i.e., vendors won’t adopt the currency unless they have enough consumers on board. Consumers won’t adopt the currency if there are no vendors. Having millions of vendors from the beginning will help consumers make up their minds faster.

The design of DasCoin will not allow for it to mint unlimited currency. It will end after minting a predefined amount of it. This helps to keep inflation of the currency in check.

DasCoin supports a referral system which serves to spread the word about DasCoin. Referral or affiliate systems are a great way to get others to do the selling of your product or service. It is low cost, too. The referrers spend money to drive traffic to the website of participating vendors. Vendors give up a percentage of sales in exchange for the potential customers. New customers can participate in the referral system, which can help DasCoin expand its reach.

It’s not likely that DasCoin will replace other cryptocurrencies or even fiat currencies. In fact, it will accept both as payment with other currencies planned for the future. However, the current plan is for it to be the new sheriff in town in the cryptocurrency world, and DasCoin management is on track for this to happen soon.

Will Warren Buffet’s Bailout of Home Capital Affect You Personally?

Sub-prime mortgage lender, Home Capital Group was in all sorts of trouble. The Canadian lender was facing a cash crunch and a loss of confidence with customers across Maple country. As the biggest provider of home mortgages to self-employed individuals, Home Capital Group has been battling disinvestment on a large scale.

The Ontario Securities Commission (OSC) recently settled a contentious lawsuit with Home Capital Group, but not without heavy costs (C$30.5 million). The company also settled a major class-action lawsuit for intentionally misleading investors vis-a-vis the underwriting process. As a result, depositors were pulling their funds from the Toronto-based company en masse.

Enter Berkshire Hathaway and Warren Buffet

‘… HCG’s ability to originate and underwrite well-performing mortgages… make this a very attractive investment…

The billionaire investor and strategist wasted no time compiling a bailout package for Home Capital Group valued at C$2 billion, the equivalent of US$1.5 billion. This credit line is geared towards Home Trust Corporation. Additionally, Berkshire Hathaway will purchase common shares of Home Capital Group valued at C$400 million.

Initially, Buffett’s group will purchase 16 million common shares valued at C$153.2 million and then invest an additional C$246.8 million to buy the other 24 million shares. The second investment requires the approval of Home Capital Group shareholders, while the first investment can take place without their approval.

The C$2 billion credit line is notable, since it will effectively replace the costly financing from the deal in April 2017. According to preliminary reports, the interest charged on the Canadian home mortgage company’s line of credit will be 9.5%. It will eventually decline to 9%. Berkshire Hathaway will pay on average $10 per share, which is a 33% discount on the stock price as at Wednesday, 21 June 2017.

Leading analysts are heartened by Buffett’s intervention. They believe that this is a strong endorsement of the Canadian sub-prime mortgage lender, and it will bolster confidence in the Canadian mortgage industry. Such bailout-style investments are not uncommon for the big-league US investor. In 2011, he dropped $5 billion into Bank of America (BAC) to prevent it from going belly up.

What Is the State of Canada’s Housing Market?

The state of the Canadian economy is difficult to gauge at this time. For example, cities like Toronto and Vancouver are characterized by steep appreciations in property prices. This is fueling anxiety in the markets, leading some to believe that a property bubble is forming in the country. If sub-prime mortgage lenders are continuing to finance this industry, it could be subject to a correction, or worse. The fate of Home Capital Group is important, since it was ensconced in a scandal 3 years ago where it severed ties with scores of brokers.

Many large-scale investors in the company are scared of the prospects that lay ahead. The dilution of the stock price thanks to Berkshire Hathaway has possibly saved the company, but not served the interests of existing shareholders who will now pay the price. Buffett’s C$2 billion loan will be effective by the end of June and will replace the current loan between a major investor and Home Trust Company.

Canadian Economy Remains Ironclad with a Few Chinks in the Armour

Currently, Canada has a stable credit rating of AAA. This credit rating is a barometer of the financial stability of the Canadian economy for pension funds, sovereign wealth funds, and institutional investors. It plays heavily into the country’s ability to borrow cheaply on international markets. The Economist reported in mid-June that Canada’s housing market is extremely overheated.

While the collapse of Lehman Bros and the banking crisis that followed did not impact Canadian lenders, it appears that the tide is slowly turning. Today, the top 20 banks in the world feature 3 Canadian banks. These include Toronto Dominion, Royal Bank of Canada, and Scotia. Now however there are concerns that Canadian moneylenders are acting recklessly and driving up a property bubble. In just 10 years, the price of property in Canada has ballooned 76% and household debt to GDP has increased from 74% to 101%. These are indeed troubling times.

Lenders are scrambling to offer the best mortgage deals, and the best credit card offers in Canada, and customers are lapping it up. However, the rapid increase in credit growth is a prelude to a possible financial crisis. The Canadian government has been working hard to eliminate speculation in the housing market, and Montréal may be next in line. Canadian bankers use the defence that mortgage debt is evenly dispersed and that it forms a minor component of household indebtedness.

Regulation remains a concern with Canadian lenders, since small banks and financial institutions are not required to adhere to stringent rules. In Canada, the return on equity for banks is typically 15% – 20%, and since the financial crisis Canadian profits have increased by 100%. Now, bank returns make up 1.3% of gross domestic product, which is significantly higher than the United Kingdom and the United States.

Refinancing may still be an option

To no one’s surprise The Bank of Canada has left its key interest rate unchanged at 0.5%. After reading the latest Monetary Report, it doesn’t sound like it will raise its policy rate any time soon. Inflation is flat, as is wage and export growth, and there is still uncertainty in the US and globally.

Despite record low interest rates, some new home buyers are finding it challenging to qualify for a mortgage due to a new round of rule changes announced late last year. These changes have also affected existing mortgage holders who may want to refinance to get a lower rate.

While low interest rates and robust regional housing, markets continue to be the norm, Canadians are still burdened with record-high debt loads. The ratio of debt to disposable income rose to 167.3% by the end of 2016. That means Canadians owe $1.67 for every dollar of disposable income, up from $1.66 the year prior.

If you’re sitting with equity in your home yet can’t seem to manage your debt payments, refinancing could still be an option. With credit card interest rates often pushing the 20% range and unsecured lines of credit in the 7% and higher range paying off high-interest debts can make sense.

Let’s review a refinance. Specifically, you are increasing the amount of your mortgage to pay off debt. Your actual mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing midterm, but your overall monthly payments should decrease. You could be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run.

Here are some reasons to consider a refinance:

Decrease your overall monthly debt payments by using your equity to pay off those high-interest credit cards or unsecured loans, which can help you better manage your budget.
You can refinance to purchase another property. Using the existing equity in your home can be a great way to buy a rental property which, if done right, can also make the interest you pay tax deductible.
You could also take out some of the equity for investment purposes.
Or you may want to refinance to renovate.

As you can see there are many factors to consider before deciding to refinance. Each individual’s financial situation is different. Call me and we can discuss the options available to you.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

How to Get a Car Loan with Bad Credit

Bad credit doesn’t mean you can’t get a car and doesn’t mean you can’t apply for a car loan with terms that don’t destroy your monthly budget.

Do you know? Almost 25% of auto buyers are regarded as sub-prime, so this means that they have a credit score below 620.

With just a little preparation, having a car loan with poor credit or even with no credit is feasible. Let me tell you how.

Prepare Yourself

It helps to know in advance that people with poor credit usually face higher interest rates and so, once approved, encounter paying more for their money compared to those with good credit. Thus, it’s extremely important that you use up all your options to be able to discover the best auto financing deal. This can simply save you thousands of dollars over the life of the loan.

Check your Credit Reports

Checking your credit reports will give you an in-depth picture of where you’re, and may help you identify any errors that can appear on the records. After that, you can tackle these errors before you approach loan providers.

The main credit agencies provide free reports once per year.  Checking your credit score can cost a couple of dollars, but it can be of great benefit to get an idea of how the lenders will address you.

Try and Find a Good Lender

Finding out how to get a car loan with bad credit will become easier when you know your choice. Getting a lender that welcomes car loan applications from those with bad or limited credit records is obviously a nice start.

Get in Touch with your Local Bank and Credit Unions

If you get low monthly payments but need to pay the loan back for more than 8 years, it’s almost certainly not worthwhile. You need to look for the loan that can give you the lowest interest rate and the least amount of monthly payments.

Make sure that terms and conditions are final. Some car dealerships will raise the monthly payments on your car soon after a few months. Always read the terms to make sure that you aren’t getting fooled into a more pricey payment situation.


Give Attention to the Terms But not on the Monthly Payments

If you get low monthly payments, but need to pay the loan back for more than 8 years, it’s almost certainly not worthwhile. You need to look for the loan that can give you the lowest interest rate and the least amount of monthly payments.

Make sure that terms and conditions are final. Some car dealerships will raise the monthly payments on your car soon after a few months. Always read the terms to make sure that you aren’t getting fooled into a more pricey payment situation.

Refinance your Loan

After 1 year of making payments for your loan, you should try and get it refinanced. This is particularly beneficial if your financial circumstances and credit has improved. Even reducing the interest rate by 1% will save you a great deal of money in the end.

Final Words

Even though they may require more research and settlement, auto loans for bad credit are certainly not impossible, and you may not need to agree to higher interest rates. If you limit your application to one month period, damage should be minimal, and you’ll be on the way to a profitable auto loan and ideally, much better future credit. You can also check companies as Libertyauto.ca to find more on how to get a car loan, refinancing your loan or how you can transfer your car loan balance.

What’s going on with my appraisals

Changes in mortgage rules for home buyers and insurers certainly have had an impact on the housing market, and those changes have impacted property appraisals as well. Conventional mortgages – up to 80% of the value of the property – historically, were required to have a full appraisal. Now, in many areas of the country, an appraisal may also be required on insured mortgages — 80 to 95% loan-to value.

The decision to approve a conventional mortgage, after all other lending criteria have been satisfied, is made on a property’s fair market value. This is defined as the market value of an interest in land at the highest price reasonably expected, when sold by a willing seller to a willing buyer, after an adequate amount of time and exposure to the market.

So who determines the value of that property? One could argue that the market itself determines the value, which is true, but from a lender’s perspective that number must come from an independent third-party – the appraiser. An appraiser, who is specifically trained and has sufficient experience, will be asked to offer an impartial, written opinion of the property’s value.

Realtors normally use a comparative market analysis (CMA) to evaluate a property’s value based on local market data. Agents analyze listing and sales data for comparable properties in the area to recommend a price to list or to offer. However a CMA is not an appraisal. Although appraisers use the CMA approach, they use it in combination with other factors to determine the value of a property.

The major difference is that appraisals are done for a specific client — the lender. Because real estate is the major security for mortgages, the market value estimate needs to be as accurate as possible. Appraisers use ‘sold’ properties information only and compare similar property types, in close proximity, that have sold within a relatively short period of time – usually 90 days.

Not all residential properties are subject to a traditional appraisal. If the property is in an established area with similar properties then sometimes the price can be validated electronically. This model of appraising property, called automated valuation model (AVM), has become quite popular in the last 10 years.

However, given the nature of the housing market these days, mortgage lenders have moved away, in many areas, from AVMs for conventional mortgages, and for some high-ratio mortgages as well, and are asking for live, full on-site appraisals.

At the end of the day, an appraisal must reflect a property’s realistic true market value and needs to be backed up with accurate data.

So why does an appraisal come in lower than expected?

With the introduction of bidding wars, where, in some areas, prices may be artificially inflated, appraisers are still tasked with coming up with a property’s fair market value. Rapidly changing markets can be very challenging for an appraiser to properly evaluate a home’s worth.

Appraisers will try to get to the purchase price when evaluating a property. However, sometimes the sale is a few weeks ahead of the market. If prices are increasing, it may not show up in their analysis yet and the appraisal will reflect a lower value.

At the end of the day, the appraisal has to be a realistic evaluation of a property’s true market value and be backed up with data.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com