Debt Management & Mortgage Services
Financialist • Issue 133 • April 2017
BY MARK NEUFELD BA CFP CIM
If you are seeking a new mortgage, or have a mortgage that is coming up for renewal soon, then this article is for you.
The business of lending money
The debt business has been a huge growth sector within the financial services profession for several years. There are a number of reasons for this:
■ Easy lending policies coupled with a significant increase in the number of debt products available in the marketplace
■ Low interest rates
■ High levels of consumption as individuals accept higher levels of debt
■ In urban areas, to own a home you invariably have to accept a large mortgage.
Debt products (mortgages, lines of credit, credit cards) are available through a wide range of financial institutions with many options. So many that, at times, it is difficult to determine if you are receiving fair value.
Today, the difficulty is not necessarily in being able to acquire credit (or debt), it is: How do you make a good financing decision amongst such a broad range of options?
Why is debt management important?
A commonly overlooked and underemphasized area of financial planning is debt management. This may be in part due to the history of the lending business, which was traditionally the territory of major financial institutions such as banks and trust companies. In most cases, individuals seeking loans would have simply dealt with the financial institution with whom they had their bank accounts, and either accepted the “posted rate” or negotiated a slightly lower rate.
Today, the lending business has become very competitive. As such, your ability to reduce your debt servicing costs and increase your flexibility has never been better, due these competitive forces.
Mortgage Brokerage Services
Since mortgages represent the largest
component of one’s consumer debt, it is
in this area where financial planning can
have the greatest impact and result in
significant long-term interest savings.
By taking a financial planning approach to
securing a mortgage and with the assistance
of a mortgage broker, you can save
time researching your options, attain
professional and specialized advice and
secure a competitive mortgage without
any additional cost to you.
The following is a summary of our Debt
Management service that we can provide:
1. Document your current debt position
and new financing needs
2. Analyze your current debt position and
provide projections on debt elimination
3. Provide strategies and recommendations
on how to structure your
4. Refer you to a mortgage broker to
assist with the implementation of a
new mortgage or re-financing
The benefits of following this process
■ You will receive debt management
advice within the context of your overall
■ You will have access to a professional
mortgage broker who will act as your
liaison with major banks, credit unions,
■ You will secure a mortgage that suits
your needs at the most favorable terms
■ The mortgage broker is independent,
objective and works solely for you
and therefore, has your best interests
■ The rules surrounding the qualification
requirements for securing a mortgage
have become more stringent recently
and a professional mortgage broker
can help educate and navigate you
through the changing landscape
■ Once the mortgage has been placed,
you’ll receive from the mortgage broker
ongoing support and professional
guidance for the life of the mortgage
■ There is no cost to you. For the
services and solution provided, the
mortgage broker generally receives
compensation from the lender who
originates the mortgage. In most
cases, a mortgage broker will
share a portion of this compensation
for referring a client to them. This
compensates them for the time
spent providing you with the initial
debt analysis and strategy.
How much can you save?
Take the following example (based on
mortgage rates at the time this article
$300,000 to be paid back over 25 years
Average 5 Year Posted Rate:
4.64% compounded semi-annually
Average 5 Year Broker Rate:
2.69% compounded semi-annually
Mortgage rates courtesy of Mortgage Intelligence.
Result: Using the rate negotiated by a
mortgage broker could save approximately
$5,729 in interest in year one, or assuming
the same rate differential over the life of
the mortgage, the savings balloon to
Before you acquire or renew your
mortgage, ask yourself if you are really
getting the best value for your money.
Should you have any questions or
wish to explore this further, just contact
your Rogers Group Financial (RGF)