Mortgage 101 – Mortgage Renewals and Financial Planning

This segment we outline some of the financial planning involved with the mortgage renewal process. Clinton and Todd have an open conversation about considering new lenders.

Mortgage Renewals

Todd Veinotte
Don’t even want to do any dialogue at this point, I just want to listen to the song!

Clinton Wilkins
I know you just love music. And you know what? I love Canadian artists and artists from Halifax! Yeah. And I was so lucky to be able to see Sloane in 2023. We had our national mortgage conference in Toronto, they played, that may or may not have been my recommendation. You know, it’s good to have friends on the inside.

Todd Veinotte
It was excellent. Excellent choice.

Clinton Wilkins
Thanks for listening to our show. Yeah, everybody, thanks!

Todd Veinotte
Thanks for listening on your Saturday or your Sunday driving around in your vehicle having your coffee. And, we’re back.

Clinton Wilkins
I feel like it’s been so long since we were on. We did so many shows in November, Financial Literacy Month, which is such a big piece of my life. Every year that we do it we put out so much media and education, on all that stuff.

Todd Veinotte
So by December it’s just like, we’re ready to go on vacation.

Clinton Wilkins
But now we’re back. And it’s January, and it’s ‘Merry Debtmas!’ And a big piece of ‘Merry Debtmas’ is around mortgage renewals. 14% of Canadians are coming up for renewal of their mortgage.

Todd Veinotte
That’s a lot. And it’s a lot considering the mortgage rates, and the interest rates that we’re looking at.

Mortgage Renewal and Seeking Professional Advice

Clinton Wilkins
A lot of Canadians are going to be renewing into mortgages that literally have an interest rate at double what their current rate they are renewing out of. This is significant. And I think a lot of people think that their mortgage payments are going to double. It’s not, but their cost of borrowing is doubling. And what can you do? And I think that’s what we’re really going to talk about here today.

Todd Veinotte
Okay, all right, so what indeed can they do?

Clinton Wilkins
I would say the first step is, do not just renew with your existing lender. I think we’re just so innate to let things like that slide because we have so much on the go. But, it’s a new year, you know, we don’t want to deal with our problems, but just don’t sign the renewal and be done with it. At least make a telephone call and seek the advice of an unbiased mortgage professional, so they can answer the question, ‘is this a good deal?’ ‘Is it not a good deal?’ ‘Should I change the structure?’ And at renewal, as we said, it’s such a great time to look at things like our refinance, maybe a restructuring makes more sense. Maybe you need a home equity line of credit, it’s good to at least have the conversation.

Todd Veinotte
Is there a time I suppose, depending on if somebody’s had a job change, or they’ve lost a job? Or they perhaps might have had a credit issue to just simply quietly let the bank renew it?

Clinton Wilkins
In some cases? Yes, yeah, in some cases blind renewal is okay. But I think at least have the conversation and know where you are at and make a plan. Because, you know, lenders are like the cell phone companies, I’ve said this before. They treat new customers better than they treat the existing customers, that’s just the nature of their business. And always, the first offer they’re gonna give you is never the best offer. That’s not like our business, we don’t have a ceiling and a floor, we just give everyone the best rate that we can give them. But you know, in a renewal situation, lenders love trying to renew customers at a higher rate. That’s just what they do. They are trying to make the most margin for their shareholders.

Lender Practices and Customer Retention

Todd Veinotte
So how often when you have a renewal, do you move somebody from their existing lender, in which you would have had them into another lender?

Clinton Wilkins
I’m gonna say it’s not 100%. Because oftentimes, if it’s a lender that we do business with, we always give that lender the ‘first first crack of the Northwest Hummer.’ And sometimes it’s the path of least resistance. There are some lenders that we work with that really love welcoming their existing customers back. And, you know, because we’re involved, they’ll still treat them the best like a new customer. But there’s other lenders that we work with that basically say, “Hey, you’re up for renewal. No, you know, we don’t want to rework it. We don’t want to lend you any more just the nature of their business. They’re just their model. So they’ve got a good client that’s paying their bills, they would sometimes rather that client pay out than really trying to aggressively retain them, or really letting us help them rework their situation. Different lenders work differently. And some lenders are really gracious, where they will allow us to get an approval sometimes eight months before the renewal, and we can fund it for months prior and they’ll not charge the client a penalty. They’ll pay us and they just love it because we’re helping them retain these customers. On the other hand, other lenders don’t really want us to be involved.

Todd Veinotte
So in your business, I would think that the straight renewal with no changes, same lender, that’s got to be the easiest transaction in your business?

Clinton Wilkins
We don’t get involved in a straight renewal. Sometimes, but we don’t typically involve ourselves in a renewal basis where clients are not by borrowing any additional money; so no new funds, and they’re keeping the amortization in line with where they’re at. If shortening it, we would move a client from lender to lender, so then they’re a new customer. Again, we call that a transfer or an assignment. And we would use a company like the first Canadian title to do that registration. All the costs are typically covered by the new lender. And that’s sometimes the most aggressive type of business that we do. Because in theory, you could just renew with your existing lender. But by us getting involved, we’re able to reposition it, and present you as a new customer, again, to another lender and really, hopefully get the best rate and the best terms for your needs. Everybody’s situation changes, right, as you know.

Todd Veinotte
All right. Part of what you guys do is you’re not a typical mortgage lending business, you integrate a lot of different things into it, including financial planning, you have in-house financial planners, who we’ve met for Financial Literacy Month; and they take care of other things. So you try to look at the entire picture, through yearly interviews or meetings with your clients.

Clinton Wilkins
Yeah we love doing annual reviews! And I think, you know, some mortgage lenders and brokers and brokerages are more like a ‘burn and churn’, you know, where they’re in the transaction business, I believe that we are more in the advice business. I wouldn’t be here with you going on many years and on the radio if we weren’t into the advice. We thought when we started the show we were going to do one season. And years later we’re still here. Many years later! You remember when we first started, six years ago, we’d go on the weekend, and our vision was to do one season, see how it goes.

Todd Veinotte
You and I had never met prior.

Clinton Wilkins
Never met. And we’re like, “here’s a little movie magic behind the scenes.” The concept was to do a radio show once a month, and see how it goes.

Todd Veinotte
But, isn’t it amazing, though, how it never gets old. Especially in the climate that we’re living in today with mortgages. Everything is always changing in this industry in many ways.

Clinton Wilkins
And I think it’s changing, now, faster than it’s ever changed before; which for me, is very exciting. Because, I think when you’ve done the same thing for 17 years, in my case mortgage lending, and you Todd you’ve been in the media business a long time, it can get stale. But you know, when we come to do things like the show, for example, it puts you out of your comfort zone, I’m not a professional media person, you know, but I see mortgage clients every day. And I think sometimes that even surprises people when they come into our office. Often they are like “Oh, I can actually see Clinton.” Not recognizing that the mortgage part is my full time job. I’m doing this show more as a public service. You know what I mean? Like, we’re here for education, and we like what we do. And we get to do some fun things like sharing this on social media. You know, we’re making some reels. So, overall I think it’s really fun. And you know, what I love is when people write to us. They send us emails and want to talk about specific topics. And we’ve done so many ‘call-ins’ in the month of November for Financial Literacy Month, and we were answering these calls live which was awesome!

Todd Veinotte
We’ll do that again in November.

Clinton Wilkins
We’ll do that again. Yeah, next November for sure. But if you have something that you want us to talk about on this show, we’re on all year long. Send me an email, send us a tweet however you want to get a hold of us and we’d love to answer your call on the show. Or, if you know there’s a professional you want us to bring in, we’re going to bring in a lot of awesome guests all year long, so we’re really excited to hear from you.

Todd Veinotte
Alright, what’s the very best way for people to get a hold of you?

Clinton Wilkins
Check us out online first, it is best to visit us at teamclinton.ca/radio

We have hundreds of blog posts on there, there’s all our contact information. You can visit us there, all our social media accounts are on there and you can see you know what Todd and I look like in real life.

Todd Veinotte
Handsome as hell.

Clinton Wilkins
Of course we are!

Todd Veinotte
Thanks Clinton.

Clinton Wilkins
Thanks for having me, Todd.

Todd Veinotte
All right, Clinton Wilkins. Mortgage 101, your guide to homeownership. Thanks so much for listening to everybody.