Interview with RBC Mobile Mortgage Specialist Jan Michael Reyes about the process and benefits of the mortgage pre-approval process, before buying a house or condo in Winnipeg.[spp-optin] [spp-ctabuttons]
For a transcript of this episode, click the down arrow
Announcer: [00:00:27] Buying or selling a home. Require specialists from multiple related fields. Everything you need to know direct from the source as the Real Estate Roundtable presents as an expert. Mortgage Pre-Approval.
Ryan: [00:00:38] And today we welcome Jan Reyess of RBC mortgages. Welcome to the show Jan.
Jan Reyes: [00:00:42] Thanks for having me. You guys are really exciting.
Bo Kauffmann: [00:00:45] Tell me what can people expect when securing a mortgage during the home buying process, a mortgage pre-approval
Jan Reyes: [00:00:49] Well I’d like to preface this by saying every situation is going to be a little bit different. I like to keep things tidy and organized. I like to have kind of an order of operations when we do things is probably going to tell you guys the whole process is going to be really emotional.
Jan Reyes: [00:01:04] I assume you’ve told clients that what my job is is I like to make sure that things are just about as easy peasy as possible. Right. So to give you an example of what what my interaction looks like everything is going to start off with a phone call and that right then and there we’re going to talk about what to expect throughout the next few weeks months however long it takes. The biggest thing that that I would like to get out of the way is documentation. If you want this process to happen as easy as possible I’m going to ask you to bring a whole bunch of documents right up front at the beginning. The worst thing that could happen is me chasing clients around for documentation making things longer and making things more stressful especially right when maybe there’s an offer on the table and you need to follow that timeline really quickly. We don’t work during bank hours we don’t work 9:00 to 5:00 sometimes sometimes is going to need an answer at 7:00 p.m. that night. I want to be ready for when both says hey listen we need an answer tonight. We’re writing an offer right now. I need to know.
Jan Reyes: [00:02:12] Yeah yeah. So as much as we can. Let’s get all the boring documentation out of the way. We’ll get you pre-approved. We’ll talk about that a little bit later on. And then as many of the variables we can take out right at the beginning. Let’s do that and let’s make it easy peasy right till the end. So yeah of course people can fax and e-mail in those documents. But if you need to go somewhere to pick something up yeah you can do that. You’re not stuck behind the desk.[00:02:39] There has to be at least one one on one meeting. I definitely need to know that you really exist clients. But yeah once we have that established we can let’s use technology as much as we can e-mail fax whatever it may be and let’s get this done for you as easy as possible.
Ryan: [00:02:55] Now this is a question for both of you. Why is it so important to have preapproval in hand before you start looking for it home.[00:03:02] The way I look at that is I want to make Bo’s life as easy as possible.
Bo Kauffmann: [00:03:05] Thank you. Thank you.
Jan Reyes: [00:03:07] I did say it a couple of times that this whole process starting with Bo. It’s very very emotional. So when we take out a lot of the variables when we can say hey listen your financing looks pretty fantastic you’re pretty approved. That gives Beau and yourself the confidence to start looking at houses. The worst thing that could happen to us is you guys fall in love with two or three houses you can offer and then unfortunately I have to say no at the end you can’t afford it.
Bo Kauffmann: [00:03:35] You know we didn’t probably do things so a lot of times to a bank will let’s say pre-approved somebody for three hundred thousand. That doesn’t mean you have to spend 300000. You’ll come to me and say you know what my max is 275 and that’s fine. I respect that we set up the search to go up to 275. But you know what’s going to happen invariably is we’re going to look at a bunch of houses and they might not be up to your standards. And we we stumble across one that’s 290 and it’s nice to know that we can at least make an offer on that. It’s nice to know going in that that is if you choose to go that high that you’re going to be approved for it. We don’t fall in love with houses and then discover that you’re out by 25 grand. So it’s very very important to set our standards set our expectations and know how far we can go. Is it also good to have that extra headroom in case a bidding war happens. And you know what. I totally respect buyers that come and say Oh I’m never going to get involved in a bidding war. I don’t want that.
Bo Kauffmann: [00:04:32] That’s easy to say until you walk into that house that has absolutely everything you want and wouldn’t you know it. It also has absolutely everything that three other people want. So I don’t want to get in a bidding war means that you only accept a house that nobody else wants. And that’s just not reality.
Jan Reyes: [00:04:51] My experience when I bought my first home. My wife and I we weren’t going to settle for any old home. This is the house that we were going to live in for the next 10 fifteen years we were going to raise both of our beautiful daughters in this house until whenever they wanted to leave and we fell in love with every home that we put an offer in. And that doesn’t mean that we were going to get that home. And I guess we didn’t understand that concept so I hadn’t met Bo yet but when my realtor told us that we didn’t get the first and the second and third house man the conversation the home wasn’t wasn’t the finest. Right.
Bo Kauffmann: [00:05:23] Yeah. So are you still in your original home.
Jan Reyes: [00:05:26] I am. I am yeah.
Bo Kauffmann: [00:05:27] That’s no good. How long you been there. OK it’s time to talk.
Jan Reyes: [00:05:35] I’d like to talk about one more thing about preapproval. They are fantastic. But there’s a notion there that people think that because I’m preapproved. I am good to go there. Nothing wrong happened but the financier really the simplest way I can put a preapproval is we’re going to take a look at your finances and we’re going to take a look at numbers. We’re going to take a look at credit. We’re going to take a look at your relationship with the World Bank whatever that may be. And we’re going to say yes financially you look pretty good and you should be able to afford such and such amount on the home. But there are other factors so both can talk to you about financing conditions and all of that good stuff it’s still a good thing to have. I want to give you a specific example I gave a preapproval to a client. Financially they are perfect. They were really good. They went and put an offer on a home. We had to send out an appraiser on the home and the home itself didn’t meet our standards. So that effectively could decline your application. No matter how great your finances are so don’t get me wrong. Rules are fantastic it takes 80 percent of the worry out but it’s not the end all be all in your home buying process especially in a case where somebody is putting down less than 20 percent there is still CMHC.
Bo Kauffmann: [00:06:47] Yes and they will definitely take the house into account. And I guess in this case what you’re talking about is we had to do an appraisal somebody actually put on more than 20 percent of my right. I guess the overpaid for the house or whatever happened I don’t know what what the scenario was.
Jan Reyes: [00:07:01] So I saw a good specialist or a good mortgage professional will outline on your preapproval that you’re good for the finances but there will be that part on the letter that says maybe you should still consider putting a financing condition on leave that to you and Bo because something could happen at the end. And we just want to make sure we’re ok.
Bo Kauffmann: [00:07:18] When it comes down to payment and amortization what should people really focus on.
Jan Reyes: [00:07:23] So this is going to come up a couple times through art review. When we when we sit down and we talk about your situation and what type and what kind of mortgage is going to be the best fit for you. Avi I’m obviously going to guide you through all of that. That good stuff but how you’re going to want to look at it is what your goals are. So everybody can say yes I want a mortgage for 100 years so my payment is as low as possible right now.
Jan Reyes: [00:07:49] Disclaimer We don’t have 100 year mortgages just because you heard this as you heard it from. Yeah I am calling about the 100 year mortgage certainly. Totally.[00:08:01] And what happens is let’s say 20 years down the line or more realistically we set you up for a 20 or 25 year mortgage where the payments are nice and easy. But you know you don’t want to stay there forever do you. Maybe this is your first home and maybe you have a couple kids down the line and you’ve outgrown the home or is the plan really to stay there for the next 10 15 20 years. For my clients who do expect to stay in their home for an extended period of time we should set a goal to get that mortgage paid off as quick as possible. One of the things I really believe in is the bank or myself I represent the bank. We make quite a bit of money off of the interest that you make on the mortgage. But I want you to pay that thing up as quick as possible. I want you to be as financially free as possible as soon as possible. So we’re going to sit down and talk about those goals as well. [00:08:54] So I want to say here that people get really hung up on an interest rate. Yes. You can save yourself half a percent here and they’re going to somebody else a couple of things you don’t want to figure out is number one affordability. Is this going to make sense for me. Am I paying extra fees when I’m looking at a lower rate thing. Yeah. Are all the fees up front or are they hiding anything. [00:09:19] I mean when you’re paying for premium product like mortgages as a premium mortgage product but the premium institution like we are are you paying for the correct type of product for you are you are you paying for what you should be getting. So my little bit all over the place but please just don’t take a look at the interest rate and go with that.
Bo Kauffmann: [00:09:39] We’ll talk about that a little bit at the end of the show and in our roundtable because consumers do have options they can go to one of the big banks. They can go to a mortgage broker they can go to a credit union and each one of those options in my mind has an advantage. But sometimes those advantages come at a cost and I’m looking forward to talking to you about that at the end of the day really. Absolutely.
Jan Reyes: [00:09:59] Now and what are some of the biggest benefits to seeing a mortgage specialist as a whole a mortgage specialist is going to be there from the beginning of the process right until the end and beyond. And I and I don’t work bank hours. You’ll see some banks. Now they close on Mondays unfortunately. I will work that Monday that the bank is closed to give you an example. I’ve got a couple Boeing clients are in that industry. They get off at 1 1:00 a.m. in the morning and I have been known to pick up my phone and meet them at Tim Hortons or a coffee place and do a mortgage application right then and there. So I owe you all the time. Hey my phone is going to be on all that time. Will I answer everytime I say yes what I say but my voice mails reveal to you but I will I mean I mean I will be happy to work with you whenever wherever you’d like as long as in the city.[00:10:50] Excellent. Jan Reyes is with RBC mortgages. Jan how can people reach you if they want more information such as the list of documents they need to prepare and that hundred year mortgage. [00:11:06] My main contact is obviously my phone. Give me a call anytime. Like I said I work all hours. That number is 2 0 4 5 1 0 5 7 0 9. Conversely you can email me my email address is my first name [email protected] [00:11:34] Jan it’s been a real pleasure. Thanks for joining us today. [00:11:37] Thank you. Thank you guys for allowing me to be here.
For a step by step instruction, check out ‘Buying a Home – 6 Important Steps’