Could your finances use a mid-March boot camp?

It seems like only yesterday that calendars ticked over to 2013 but here we are in the middle of March. Nevertheless, you don’t have to wait for the New Year to implement a new resolution – setting aside one random day for a financial bootcamp to free up thousands of dollars a year is always a smart move.
With many recurring monthly expenses, there are plenty of opportunities to save money. Here’s how to get started: Grab a pen and paper – or spreadsheet – and list the items, the monthly cost, and the phone number for customer service, for each one. Leave one column open to list the new cost you’re hopefully going to get and one final column to calculate the monthly savings. See the example below.

Item	Monthly Cost	Phone Number	New Monthly Cost	Monthly Savings
Cellphone Co ABC	$75	1-888-xxx-xxxx	$55	$20
Auto Insurance	$175	1-888-xxx-xxxx	$155	$20
…	…	…	…	…

Scan your bank and credit card statements to help you put together your list of expenses. Everything is fair game: insurance policies, cellphones, TV, Internet, gym memberships, banking fees (including credit card interest rates and annual fees), and so on.
Before you call each service provider, you need to check what the competitors are offering for the same services. While this involves some research, it can help you negotiate with your current provider – and in some cases it might lead you to switch. If that is the case, make sure to ask your current service provider about any possible cancellation fees, and then bring these up with the competitor to see if they will cover them.
When looking at items like your Internet package, make sure to consider downgrading. Many people are paying for packages they don’t fully use . With credit cards, ask about lower interest rates and waiving annual fees. The same goes for inquiries to competitors – they may be more willing to waive the fee, if even for just the first year, to secure new business. And remember, rewards programs are irrelevant if you carry a balance. Who cares if you earn 2 per cent in rewards when you pay 18 per cent interest?
There is no shortage of guides on what expenses to look at and how to do some research. But I’ll finish with a step that is the most important part of the whole exercise. Add up the total in monthly savings and that is exactly how much you need to contribute to a new automatic saving program in a high-interest savings account or use to pay down credit card debt faster.
Remember: you were used to not having that money anyway. You need to do something productive with the savings otherwise you’ll just spend it elsewhere. Otherwise this little bootcamp exercise will amount to a little pain, and no real gain.

BTB Mortgage Solutions 905-357-5366

Search for the best rate stressful, poll reveals

An ING survey suggests 59 per cent of Canadians find negotiating for the best rate the most stressful part of obtaining a mortgage – ironically, results that provide support for the mortgage brokers ING has now left behind.

“I’d say per cent of people would probably tell you that interest rates are the most important part of the process before they begin,” says Verico Premiere Mortgage agent Jason Friesen, reacting to the poll. “That drops to about 50 per cent once they have gone through the process. With the banks, you have specialists who are a jack of all trades, but master of none. They know just enough to be dangerous.”

That may be reflected in the Angus Reid online survey, commissioned by ING Direct and canvassing respondents on a host of mortgage experiences.

Some 65 per cent of respondents age 18 – 34 indicated haggling for a rate was among the most stressful part of the mortgage process while over half (56 per cent) agreed researching and comparing offers made the process more difficult.

Most (59 per cent) found that renegotiating for a rate was stressful, while deciding on the right term and payment schedule (55 per cent) and getting customer service help from the lender (35 per cent) were close behind.

More damning of the process itself, 67 per cent of Canadians surveyed who currently have a mortgage feel the process was either too complicated (31 per cent), confusing (20 per cent) or hard to figure out (16 per cent).

“There is a battle for clients out there, and a real lack of knowledge among people looking for a mortgage,” Friesen told MortgageBrokerNews.ca. “That is what we need to do as brokers: move them beyond the ‘low rate gratification’ and spend an hour just to get to know them, and find out what their needs are.”

Friesen does tip his hat to ING, describing them as a “great friend to the broker industry” before they officially left the channel in February.

Since ING’s takeover by Scotia last year and its departure from the broker channel in February, there has been a transition of staff and clients to Scotia as the big bank is now focused on the broker channel, while ING has dedicated itself to the direct-to-consumer model.

“Whether you're a first-time home buyer or shopping around for a new mortgage, applying for a mortgage doesn't have to be a confusing or complicated experience," states Peter Aceto, president and CEO of ING Direct. “Choosing a bank that provides a great rate up front and offers flexible terms means saving both time and money over the long run.”

The February 27 online survey was conducted among a sample of 1,519 Canadians who are Angus Reid Forum panel members, with a margin of error +/-2.5 per cent, 19 times out of 20.

RBC’s Rate Match no match for brokers?

Brokers are describing RBC’s newly launched Rate Match campaign in less than glowing terms, pointing out the exclusion of monolines as evidence of a broker’s skill at finding the best deal.

“It’s all smoke and mirrors; they know that the monolines have better rates,” says Brian Nason of Mortgage Architects in Hamilton. “The average consumer is very aware of the monoline rates and is extremely rate conscious. Underestimating the consumer is definitely to our advantage.”

RBC launched the Rate Match campaign this month, promising to match the mortgage rates of 10 Canadian financial institutions – the majority of which are closed to mortgage brokers, and none of which are monolines.

“RBC doesn’t want to be bleeding cash, and they are accountable to the shareholders,”  “I think they realize that brokers should be able to get the same rate or better. The banks have to maintain a threshold of profitability.”

“They are making the client go and do the work for them, finding the best rate,”  “If I am going to do the work myself, why should I stay with RBC if another lender has a better rate?”

RBC is simply focusing on rate. “It speaks volumes of the lender,” “They (RBC) are not stepping up to the plate, but providing the lowest rate after the fact. If they want to offer the best rate, they should offer it up front.”

It is the latest move among the major lenders to seize a larger slice of the mortgage renewal pie, countering BMO’s 2.99 per cent 5-year fixed rate announcement earlier in the month. It is also another body blow to mortgage brokers, who are finding it difficult to go toe-to-toe against the banks without giving back bps on commission.

“All is fair in love and war,” . “But it isn’t good business.”

 the banks typically lavish deals and attention on a new client to secure their business, only to stick them with regular rates once the special rate has expired.

“Like any bank, once you are in the door, there are no more special rates,” he says. “That’s the difference between mortgage brokers and banks – a bank is never going to tell you the benefits of a variable rate.”