Mortgage101 – The Business Of Housing | April 24, 2023

On the heels of the latest Bank Of Canada announcement, Clinton Wilkins and Todd Veinotte chat about the job of a mortgage broker, interest rate predictions and why the government needs to get involved in the business of housing. 

The mortgage lending community

Clinton Wilkins 00:10
Thursday night is the Canadian Mortgage Awards.

Todd Veinotte 00:13
And you’ve won many of those.

Clinton Wilkins 00:14
I have won five Canadian Mortgage awards in my career over the last 17 years, and I had an early nomination this year as well. But, you know, I made the decision personally, that, you know, it’s time for a bit of a break. I want some other people to win. You know, it’s nice to have some competition out there. And you know, I’m going because I want to support everyone who’s nominated. I’ve been nominated. And I’ve won so many times that it’s nice to, you know, you know, support the rest of the community. And there’s a lady in my office, Leanne Myles, she’s up for a CMA, she’s up for a Woman Of Excellence. So I’m going to be there supporting her. I’m going to be rocking the red carpet, you know, I’ve never seen a red carpet that I didn’t like. Maybe I’ll get some nice photos. And it’ll be nice to see people that you don’t see all year round.

Todd Veinotte 00:57
Absolutely. So when it comes to mortgage lending, there must be, it’s probably a smaller community than then you would think even nationally, there would be a pretty small community of mortgage brokers like yourself.

Clinton Wilkins 01:08
Yeah, I think there is definitely a smaller community, as you can imagine, compared to people that maybe work at bank branches, there’s much fewer mortgage brokers across the country. And it’s nice that I’ve been able to, you know, compete on a national level here from Halifax. Who would think that you can compete with people in Toronto and Vancouver. Our mortgage amounts are just so much smaller. But the one thing that we have that they don’t have? We have a lot of units. And you know what? It’s a lot easier, I think, to be a big fish here in Halifax, regardless of what industry you’re working in. And I think that we do a lot of things very special here. And you know what, we build a fence around our clients, and we’re really trying to provide that expert advice. And we’re not transactional. You know, I think when you’re in a smaller community, like we are in Halifax, it’s a lot easier to build relationships, and build relationships with our clients and business partners. And we’ve been able to do that, you know, I’ve been doing this for 17 years.

Todd Veinotte 02:01
Yeah absolutely. So to that for our brand new listeners, because we get new listeners all the time, which we greatly appreciate online and listening to us over the airwaves, a bit about what you guys do.

Being a mortgage broker

Clinton Wilkins 02:11
I’m a mortgage broker, we have an office in Dartmouth and in downtown Halifax. We funded over $1.3 billion in mortgages, over 5000 transactions. And you know, it’s a really interesting business. And it’s a really, it’s a business that is always changing and evolving between things with the Bank of Canada and the federal government and bank lenders. You know, every day is a bit of a different day, Todd. And, you know, I think that’s really interesting. And there’s so many nuances in mortgage lending. I know I keep on saying this. But every file is like, like a snowflake. We just came through the winter. And now we’re going into the spring, which is typically the busiest market of the year for real estate and for mortgage lending. It’ll be very interesting to see what happens I think over the next few weeks. I’ve heard reports that we’re seeing more and more listings here in Halifax. Yes, I think it’s great news for people that are going to be buying a home this year and this spring season. And you know, we’re we’re here for we’ve a lot of people pre approved, we’ve a lot of people that are out there and shopping. And we do so many different transactions. You know, we do purchases, obviously, and we do refinances and renewals and we get involved in a lot of different types of mortgage lending situations from home equity lines of credit and things like that. So every day is different for me. And you know what, I really like that. You know, every dayI don’t know what I’m getting into. I obviously know the things that I need to do and I have a list of tasks that I have to get through. But even like what happens within the day is really, really interesting. Before we started our show, Todd and I were talking, you’ve been in the media industry a long time.

Todd Veinotte 03:38
25 years or more.

Clinton Wilkins 03:40
Right? And I’ve been doing this for 17 years and, you know, there certainly are times where it might become monotonous. You’re doing the same thing kind of over and over again. But you know, the one thing that I really look forward to, doesn’t matter when it is, I look forward to doing this show.

Todd Veinotte 03:55
Oh is that right?

Clinton Wilkins 03:56
It’s one of the things that I look forward to. It’s something that’s different. It challenges me. We have to do, you know, we have to we have to do some prep, you know. I’m reading news stories all month long. You know, we’re getting some inquiries from listeners. And we actually had an inquiry we’re going to we’re going to talk about a little bit later, you know, somebody one of our listeners wanted us to kind of do more of a deep dive into a subject. So we’re going to do that.

Todd Veinotte 04:14
And we’re going to do that in the next segment.

Clinton Wilkins 04:15
Yeah we are for sure.

Key interest rate predictions

Todd Veinotte 04:15
Okay, so let’s kind of talk a little bit about the news cycle, even though it’ll be somewhat dated with the way nature in which we’re recording. But the Bank of Canada maintained its the key interest rate last week. That was anticipated that it would do so. But what are they saying about moving forward about next month? What are you hearing? Is this the trend now? Or what do you think is gonna happen?

Clinton Wilkins 04:36
I think many economists were projecting that we were going to be in a plateau situation with the Bank of Canada. Some economists think that it’s, you know, signaling that we might see rate cuts as soon as be maybe even before the end of the year. Something maybe going into the early next year, we’re gonna start seeing some rate cuts. But some economists think that it might be signs that if we see even a tinge or a little twinge of inflation going up. That they may increase the cue overnight rate. Some economists think that there may be room for another 25 or 50 basis points of increase. I don’t know, I think we’re in a little bit of a wait and see situation. A plateau is good for borrowers, they can at least make some plans. You know, it’s a lot easier to say, okay we’re good here for a little bit longer. The interesting thing that the Deputy Governor of the Bank of Canada said, borrowers that are going to be entering into these mortgage products need to start looking at longer term financing. So does that say longer term fixed? Does taking a longer fixed rate like a five year fixed make sense?

Long term fixed rates

Todd Veinotte 05:33
Because five is the max though right?

Clinton Wilkins 05:34
No, we’re doing up to a ten year fixed. We can do up to a ten year. We’re doing many fewer ten year fix than any other product. I would say the most popular is a five year and then maybe the second most popular is a three or a four year. Very rarely are we doing a one or a two year.

Todd Veinotte 05:54
Can you do ten year variable?

Clinton Wilkins 05:55
Five year variable. Yep, five year variable. And, you know, different rates and different rate products are different for different borrowers. A lot of borrowers right now are choosing to do or three or four year fixed depending on kind of rate promos rate product, you know, their risk tolerance. Because you know, the rates are high. What will happen in a couple years? I think they’re going to be lower. When are they going to be lower? We don’t have a crystal ball. But you know, I think that we’re going to see rates off. And especially if we go into a recession type situation. What’s interesting is we still added a lot of jobs in Canada. That’s not necessarily a good news sign in terms of inflation. And the two things that are really still very high in terms of inflation, food inflation, we’re seeing that right now at the at the tail when you go to the grocery store, and housing inflation, obviously, that’s been driven by the Bank of Canada, a lack of supply in terms of, you know, homes for people to buy, and the lack of rental supply.

Todd Veinotte 06:55
So when it comes to housing, the federal government in the last budget did not they made no initiative towards affordable housing, or housing projects or whatever. What are your thoughts fundamentally on government getting into the business of housing? I’m talking about even potentially a Crown Corporation of some sort. What are your thoughts on that?

Government needs to get involved with the business of housing

Clinton Wilkins 07:14
You know what? We are in a housing crisis. And in Halifax, but really across the country, in many different markets, there’s a big shortage in housing. Government is going to need to get into the business of housing, to help fix this housing supply. Part of that it’s going to be policy. And I think part of that may be some Crown corporations that are going to, you know, work with different levels of government to really bring housing supply to the people that need it. And, you know, we’re not just talking about low income housing here, Todd. I think all levels of government really need to work on the supply and that might be incentivizing builders, it may be incentivizing buyers to buy. There’s so many different programs that might potentially work to get more housing starts going. The nice thing in Nova Scotia, we have a lot of land, we have a lot of land to build on. It’s just going to be the different levels of government working together to obviously get those shovels in the ground.

Todd Veinotte 08:10
But the other point of that is we do have a lot of land but then there’s also this move to have transportation streamlined and fewer vehicles on the road, and if people are working in the downtown core, do we want to sprawl out to Bedford and these places?

Clinton Wilkins 08:23
Sprawl is expensive. Yes, sprawl is expensive and urban sprawl is not what we want here in Halifax, but we want the density and you know what our municipality here in Halifax has worked towards that they’ve really identified these corridors where the housing can be more dense, and we’re already seeing developments getting going along, for example, like Robbie Street. I think that’s great news. It’s a great transportation corridor, and it will be great news for you know, residents here in Halifax when we start seeing some of those starts.

Todd Veinotte 08:49
Okay, we can continue to discuss that and lots more. Mortgage 101 we’ll be right back.

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