Mortgage 101 – Streamlining Mortgage Transfers | December 7th, 2023

How can working with First Canadian Title help you in the mortgage transfer process? In this segment of Mortgage 101, live from City News, Clinton and Todd dive deeper into the mortgage transfer process and talk about how to prepare for a transfer and why FCT can streamline the process and eliminate costs for homeowners.

Todd Veinotte 00:04
Clinton Wilkins and his entourage is in the house, in the studio as well is Brenna Charles. And we’re talking about when you are get that letter in the mail, which is we want you to renew at blank. And Brenna, this is kind of where you have, well Clinton has this expertise as well. But there are there are good reasons why people should perhaps entertain getting another opinion or getting or shopping that around, right?

Mortgage transfers and refinancing

Brenna Charles 00:31
Absolutely, I think you know, you get that letter in the mail from your existing lender. And that’s almost the flag, hey, let me talk to my financial advice professional, let me talk to my broker, let me talk to Clinton, and then Clinton would you know, he has a number of sort of, you know, expertise, he has connections with all the lenders and can sort of identify, does it make more sense to move you somewhere else, he’d go through the, you know, application process. So when you do move to a new lender, you do have to re-qualify. So again, it’s typically fairly simple and straightforward. And I know Clinton –

Clinton Wilkins 01:03
Yeah we try to make it as easy as possible, like, we talked to people about their income, their assets and their credit. And, you know, different lenders are right for different people, as you know, and everybody’s situation is different. But I can tell you 9 times out of 10, that moving from lender to lender makes a difference and a positive impact for a consumer, you know, we’re doing some things that are, you know, maybe just even extending amortizations. Now on an insurable transfer, we can go back to their original amortization. Sometimes people just want to amortize their mortgage over a longer period right now. Not even refinance and take out additional funds, but just change their amortization. Because the rates are high.

Todd Veinotte 01:39
Let me ask you this. Do you have to let your existing lender know if you’re shopping around?

How to prepare for a mortgage transfer

Brenna Charles 01:45
So I’d say it’s almost like a yes no question. So you don’t need to go and say I’m looking to leave. But what you should do is, you know, typically, that lender is going to offer you different terms at renewal. What you want to do is, you know, if you’re planning to switch, renew into an open term, and what that does is that gives you the flexibility to leave. Let’s say you, you know, don’t line something up on the exact date of your mortgage matures. If you’ve gone into an open term, you can still leave that lender without penalty. So again, it gives you a little bit more –

Todd Veinotte 02:16
The interest rate is probably high on that open term.

Clinton Wilkins 02:18
Yeah the interest rates our open are high, and some lenders will automatically put you into an open at renewal. But some lenders, you know, we won’t name names, but they will automatically renew you into a close term. So if you don’t have your mortgage paid out on time, and you’re planning to refinance or do a transfer, always put it into an open.

Todd Veinotte 02:34
But that said, that’s better than people’s mortgage is simply going into limbo, which which could happen.

Clinton Wilkins 02:40
Yeah, and I think sometimes people, ostrich and just put their head in the sand and don’t do anything or wait, wait, wait until the end. And that is not good. So like when we’re doing a trust transfer or a refinance, and we’re using a partner like First Canadian Title, FCT, we like to have our files done at least 10, 15 days before that transfer date. But we are at the mercy of the lender that we’re paying out to give the payout statement in a timely manner. And some lenders are not giving the payout maybe until one or two days before that’s supposed to be done.

Todd Veinotte 03:10
Trying to sabotage, the deal?

Clinton Wilkins 03:11
I don’t know, it’s just, you know, they have such a workload ahead of them that it just takes that much time to get the document done.

Todd Veinotte 03:17
Probably on the lowest priority list is sending money out, right?

Brenna Charles 03:21
Yeah. There’s no incentive.

Todd Veinotte 03:23
That’s not a good time, right? Oh it’s time to pay other people.

Clinton Wilkins 03:26
I mean, what, when we’re funding the mortgage, we want to get it on time, I think getting paid out, they’re not as excited, not as excited about that.

FCT streamlines the mortgage transfer process

Brenna Charles 03:33
And then speaking of getting paid out, that’s sort of what happens in the process. And when your lender is going to really know that you are planning to leave, you know, either you’re going to renew into an open term. But let’s say you’ve made the decision to switch. This is where FCT we’re going to order a payout statement from your existing lender. So if you haven’t spoken to them yet, that’s when they’re going to know. They’re gonna receive the signed form from FCT signed, by signed by the client, signed by the homeowner. And that’s when the existing lender is gonna be like, oh okay, I need to prepare everything to you know, ultimately receive funds and that get this mortgage paid out. So that’s really from a processing standpoint, there’s just one additional form that you need sign that you’d need to sign in order to move your mortgage out. Then from FCTs perspective, that’s where we’ll do all that legal work that I alluded to earlier to actually change the mortgage registration.

Clinton Wilkins 03:38
Now on a transfer we have to use a company like FCT, you can’t use a lawyer. But when we do a refinance, you have the choice of either using a company like FCT or a lawyer. So maybe Brenda can you talk to us to –

Todd Veinotte 04:38
On a transfer you say?

Clinton Wilkins 04:39
Yeah, like so on a straight renewal, so no additional funds, we’re just moving from lender to lender, right. We have to use first Canadian or FCT, a lender like or a processor like that to be able to move.

Todd Veinotte 04:49
Because you’re moving the mortgage yourself, it needs to be registered, et cetera, et cetera.

Clinton Wilkins 04:52
So but on a refinance, and a refinance would be maybe moving from lender to lender. Could be with existing or it could be from lender to lender with additional funds. There’s a couple options.

Todd Veinotte 05:04
But you still require FCT?

Clinton Wilkins 05:06
You can use a lawyer or you can use a company like FCT. So maybe Brenna just give us a little rundown of like, why should someone in a refinance situation use a company like FCT.

FCT eliminates closing expenses

Brenna Charles 05:16
Maybe I’ll also even call out why it is today that lenders you know leverage FCT on every transfer and it’s actually to reduce or eliminate costs for for the homeowner, for the borrower. So that’s why lenders have partnered with FCT and FCT closes all of those transfers. There isn’t really an option for lawyers. Now on refinances lenders want, you know, leave it up to the homeowner or leave it up to the borrower to decide which agency they want to close the mortgage transaction. And this is where homeowners have the option to leverage a lawyer or solicitor or a company like FCT, so from FCTs perspective, why we entered this space is you know, we were looking to fill a gap for you know, a more consistent, more cost effective option. So dollars don’t go as far as they used to. So we’re looking to try to you know, save expenses where we can. So FCT has a closing program for refinances, so for debt consolidation, where it’s one set fee, you know, if clients are paying out multiple debts, it doesn’t change the cost of closing for them. So again, as we’re looking to, you know, manage our finances consolidate debt under, you know, a mortgage product, so they’re paying lower interest rates or so you’re paying lower interest. Well, the more debts you consolidate traditionally, that could increase your closing expenses, with our product at FCT, it actually really eliminates those variable costs in closing.

Clinton Wilkins 06:43
And what I really love about it, and I’m just gonna throw it out there because we do business with lawyers, and we do business with FCT. There’s obviously some files that would need to go to a lawyer, because of just complexity, maybe title changes, things like that. But what I really love about FCT is through our channel, you’re signing in remotely, often so like the signer will come to someone’s house, and they’re doing evenings, weekends, mornings, whenever sometimes there’s a lot of friction for our customer to go into a lawyer’s office, I can tell you, a lot of our clients like to come in at five, six, seven o’clock just sign documents with me. It’s the same type of thing when you’re signing those final documents. I think the real interesting thing and I know we’ve talked about title insurance on the show before Todd, that title insurance cost is all included with FCT. There’s none of these other disbursements. I’ve had clients call me to say, you know, I’ve heard that I’ve maybe could have used a company like FCT but we used a lawyer. I just don’t understand the whys. And my lawyer bill was, you know $2,000 with legal fees, disbursements, and title insurance and I’m just using 2000 as a round number. But my friend used First Canadian Title and understand that it was a flat fee so just help me understand kind of that difference.