Financing Insights and Updates

James Shinners

Daniel: I met James and Margaret in our first strip back in September of 2012.

Margaret: It was actually 2011, because I found your first email that we ever had from you.

Daniel: Oh yeah.

Margaret: I've known you for 10 years.

Daniel: I got my numbers all wrong. I thought we were there in September, 2012. Okay. It doesn't matter. You were one of the first people that I met there and actually some of the people who we are now dealing with all came from you. Remember we said earlier, working with a team makes the dream work well. We connected with you guys and you connected us with Brenda, with Richard, with a lot of other people. Actually the lawyer we use over there and et cetera. Thank you very much for doing that now. Margaret, by the way, is the person who has vetted pretty much all of our 51 tenant buyers for our 51 rental and deals that we've done. And she has helped her husband because of course, YouTube guys are a team like you're a lot into Margaret.

You're very much a credit repair specialist, customer relation, et cetera. And James is the mortgage guy. And the two of you together make a fabulous team. Again, people watch the information there because you want to buy something in the HRM or Nova Scotia. And you've already dealt with Richard Payne, the next person to call is those two folks right here, because they know their markets. James, I have a few questions for you and Margaret, feel free to, I was going to say interfere with that.

Margaret: We've been working together for 17 years. We've been around a long time.

Daniel: How old are your kids?

Margaret: 26, 24, 22.

Daniel: Let me correct. You've been working together well longer than 17 years. James, how long have you been in a mortgage?

James: We do, in the business for 17 years now.

Daniel: 17 years. That's what you were referring to earlier about the 17 years. Was it all of it in Nova Scotia?

James: As a broker. Yeah. Prior to that, I was working as a branch manager with Wells Fargo in generally auto finance and doing personal loans. But yeah, always in the finance business.

Margaret: I started in the business 30 years ago, working for a mortgage broker in Vancouver.

Daniel: Vancouver. Yeah, because I know you guys are from one coast to the other. So, James, we know the market has changed quite a bit over the last few years, but over the last decade or even the last five years, Is there anything for people who want to invest in Nova Scotia? Is there anything particular about mortgages, about dealing with the lenders in Nova Scotia? Is there anything at all, please educate us on whatever we should know that would be different from investing in Alberta or Ontario or whatever. Is there anything different?

James: One of the things that comes to mind is the number of lenders that we have to choose. Until last year, Nova Scotia, Atlantic, Canada, general work, I guess in my mind considered sort of second rate to Toronto's, the Calgary's in Vancouver's where there are lots of different kinds of mortgage lenders and credit unions and so on. And that's not the case currently here in Nova Scotia, but we are getting more lenders.

In fact, some that have left decades ago are coming back. If they see the growth and from a risk perspective to your point, you bought a house at one point and then five years later, you sold it for the exact same amount of money. That's not really a great risk from the bank's perspective, but now with the market being what it is, if the lender is going to invest in a mortgage and secure real estate. The chances of them losing at this point are much less than they were in past years, just as the market is appreciating. And there's so much demand as Richard was saying.

Daniel: Who by the way would be our biggest lender, of course I'm thinking of Scotiabank, but that's just because I live in Ontario and I don't really know about the lenders in Nova Scotia, who will be your biggest lender in Nova Scotia?

James: That's hard to say specifically us as mortgage brokers. One of the lenders that we do a lot of business with is a company called most people have never heard of America's financial before. They are a broker lender. And in terms of rates, they have as good or better rates than in the Scotia banks of the world.

And probably one of the things I wanted to mention is, not all lenders are created equal. Although we have access to the Scotia banks and TVs of the world, often they're not the best choice because the penalties to break a mortgage with a major bank are quite a bit bigger than with broker lenders. That's, a lot of people focus on rates and that's important. Let's look at the actual terms. What are your prepayment options? What's the penalty to get out if you had to get out for some reason?

Daniel: I know and I'm not going to mention any word because this is being recorded, but let's just say, one of the banks that you just named, when we broke the deal at one anyway, $8,700 penalty.

Margaret: There was a lady in Ontario. She had to sell her house last year around now, one of the big banks and she was hit with a $30,000 penalty. Yes, and they quote, the banks are there to help you. No, I thought when I heard it, the banks are there to help themselves, but we need them. But at the end of the day, how far can they go?

Daniel: I have two more questions for you, James and Margaret. Number one, is there any additional difficulty for an outer province investor to qualify for a mortgage in Nova Scotia? Did they look at outsiders differently or did they don't care? What's the status of buying a house in Nova Scotia for somebody from Ontario?

James: No difference whatsoever. We've got lots of clients that are coming from another province. Especially now that, COVID frankly has made life perhaps a little easier because everybody's used to doing things online now.
That was sometimes a challenge, previously a lot of people weren't used to doing a zoom meeting, for example, trying to explain stuff over the phone, that's challenging, but now with the zoom meeting, I can pull up a credit application on the screen.
I can pull up your credit bureau so that together we could do some debt ratio calculations on the screen. I think that's a silver lining of COVID because we're all forced to do online stuff. It's a little easier, I would say that it was a year or two years ago.

Daniel: My last question again, regarding getting mortgages in your area is how are you doing right now with delays and are you pretty much the same as everywhere else? Is it faster, slower? Is there any difference between getting a mortgage from you or one of your lenders in your area versus getting the same mortgage from the same lender in a different part?

James: I guess I can't really speak for outside of the province. So, it's hard for me to compare, generally speaking we tell our clients, it takes three or four business days to get an approval back and that's pretty reasonable because a lot of the lenders of course are all working from home. They're not in the downtown office underwriting centers. Sometimes it's a little, three or four days is still quite reasonable. And when we make an offer here in Nova Scotia and Richard could probably tell you better than I, generally speaking, you've got 10 to 12 business days to get your financing, the range through your home inspection, checking the house, insurance, that sort of thing.

There's still lots of time. I'm curious to see where that goes as this market gets crazy, at this point we're not making unconditional offers like maybe that happens in Toronto where you just make your offer and you waive all your conditions. That doesn't seem to be happening here yet that I've seen. Maybe that's coming down the road.

Daniel: I just noticed that somebody was asking in the chat about Cape Breton. How was business there? How was the real estate?

Margaret: I just spoke to a client there and his parents sold their place in Sydney. They had priced the real estate agent a little higher and the offer they got was just a little less, but it was a lot more than they thought they'd get in places that are starting to fly up there to let people. They're moving very fast in Cape Breton all over Cape Breton.

James: Cape Breton seems to be a good place to invest. The prices are still, comparatively cheap compared to Halifax. I think the inventory is a lot older around Cape Breton, especially in the Sydney area. We had a client that recently bought an investment property. And we did a purchase plus improvements, mortgage. He replaced the roof and put all new windows in the flooring and all that kind of stuff. You need upgrades. If you're going to command a good rent.

Daniel: I know I said that was the last question, but I see two more coming here. Very quickly, you already said that there's not any more or longer delays in getting approved for not where you are than other places or at least you think so. What about appraisers and what about home inspections? With so little inventory with pain, that it wouldn't be a problem. But have you seen deals where you were delayed because it's taking forever for an appraisal to come up or to come in or something like that?

James: No, we haven't had that yet. I think it's a product of, as you were saying, there's lots of buyers, but there's not a lot of transactions. While we're busy, then the appraisers and lawyers and everybody that's involved is generally able to keep up the problem.

Margaret: We've got a good team of people that we work with. And as you've known me over the years, I don't sit back and wait for people to come to me. I'm all over it. Like a dirty chill, like I'm just right in there. But I wanted to state before. When I've been working with your rental clients all these years, I tell your clients that I'm part of their team. And I said, I will get upset if they don't call me with questions. Anybody out there, they have a question they need to ask. We're here to work with them. And if they don't ask us, we can't help you.

Daniel: And again, here came the word team again. Thank you very much.