Good morning, good evening, good afternoon. Paul Andrigo here,
realestatepodcastshow.com.
Today is one of those days where I've actually had the opportunity to do a practice
run with my guest yesterday and had some technical issues. So we had to sort of do a take two.
And one of the things I like telling you guys about the podcast is that there
are mistakes, things happen, files get deleted.
And as much as I try to make sure that I save it online and save it in a hard
drive, sometimes the technology literally just decides that,
you know, it's not going to happen that day.
So the good news about that is myself and my, you know, wonderful guest had
a chance to discuss a few things.
So we're going to discuss them again, and we're going to even add a few,
hopefully interesting topics.
So I'm going to let my guest introduce himself and tell you guys a little bit
about who he is and what he does.
Hi, everyone. Thanks, Paul, for introducing me. My name is Massimo De Luca.
I am a mortgage professional with MortgageVille. Been in the industry for nine years.
I got in the industry because I was really looking to make an impact on people's lives.
Prior to that, I was in the recruitment and sales. So I was working in the customer
service base and assisting clients, you know, finding their careers or work, you may say.
But I think getting into the mortgage industry was the best choice I decided
to do is, is just seeing that positive impact, just assisting people with the
biggest purchase of their lives, I would say, or the biggest investment and just, you know,
reassuring that, you know, they're in good hands when making that purchase.
Well, again, and that's sort of a great place to start in terms of the,
and I always like to structure these podcasts is very simple in terms of like
a storytelling type podcast.
So I like to do sort of the before the during and sort of, you know,
what's going to be happening, you know, sort of in the future, the after a discussion.
So let's, let's obviously start with a little bit about the before.
And like I said, we did talk about this yesterday, but we're going to sort of go over it again.
But I do want to get into some details as to, again, a little bit about you
in terms of where you were born and raised and, you know, sort of your progression
from, of course, you know, where you were to going from, you know,
the career that you were in now to the, to the career that you're in right now.
So let's start off a little bit about where, where you were born and raised.
I was born and raised in Toronto, not downtown Toronto, but in Toronto,
Canada, background's Italian. So my parents were both immigrants from Italy.
You know, hard work, families, highly important for me.
So, and getting into the mortgage industry, more of the financial industry,
you get to meet a lot of different clients, whether they immigrate from other
countries or they were born in Canada and every situation is completely different.
And the real thing is just listening to the clients, what their needs are,
what they're looking to do and what their future is, what, what they're planning
on doing, whether, you know, maybe they want to move in a few years or maybe
they want to start a family.
So, you know, that's where we kind of really get into the discussion and,
you know, which direction they want to go to.
So I kind of provide them like a roadmap for them with regards to the mortgage process for them.
Okay. So obviously, yeah, being born and raised in Toronto, much like,
again, we're on the same page about that, born and raised here,
spent pretty much all my life in the city.
Same thing as well. Italian parents came over here, started a new life.
So for a lot of us, this, you know, this world being in the,
you know, you being in the mortgage world, me being in real estate,
with my family anyways, it was 100% construction trade.
Everybody was in the construction business of some kind, building.
Drywall, plumbing, you name it. They were part of all that stuff.
And growing up for me, I just saw all the behind the scenes stuff about that
process and was always fascinated, still am, about the behind the scenes of every business.
So the reason I wanted to have you here is because I got the chance recently
to see how you work behind the scenes.
And not everybody does, because until you work with someone,
I always say this about life and about business, until you see someone under
pressure, you don't know what they're capable of. I mean, your resume might look great.
And this is, this is one of the, again, sort of the jokes that I like to talk about.
You know, the realtor might have a wall full of awards and, you know,
yes, I've gotten a few, but no, they're not all over my walls.
It's not about sort of just talking about what I've achieved.
I'm more focused on what I'm going to achieve. So I'm more future focused.
But in terms of being able to chance to, having the chance, Massimo,
to see you working behind the scenes with a recent client of ours,
obviously that was for me, one of the big thing that's going on.
And on top of that, I wanted to discuss today a few things.
And we can talk about, of course, you know, the weight, what rates are doing,
but definitely I wanted to make sure we also throw into the conversation a little
bit about the sort of the, uh, let's call it the, the, the, the sort of the,
the basics, the, the one, two, three.
The ABCs of the fixed versus variable discussion, because I know a lot of people
are having this discussion.
You've probably had this discussion this week, I'm guessing a few times.
So let's, let's talk about a little bit about behind the scenes.
A client of mine finds a property they want. We put in the offer.
Of course, we have the conditions for financing and financing.
You know, inspection and status. So next it goes over to you.
So what happens next on your end?
Well, so on my end, so obviously before all that, we, I pre-qualify all my clients.
So I make sure, you know, I know how they derive their income,
where their down payment is coming from.
So I look at all the documents. So that way we, there's no surprises in the end.
We pull credit to make sure that everything is, you know, correct on the credit bureau.
Sometimes clients will notice, oh, well, I paid that off or,
well, that shouldn't be on there. So I kind of make sure that everything is
correct before some minutes.
We have a smooth process. So we go through different scenarios.
We, you know, a client may be looking for a condo. So we ask him,
send me some condos that he likes so we can run scenarios with the property
tax and the variable of the condo fees.
And, you know, we kind of derive what your maximum minimum is based on the down payment.
So then, you know, may take a week, may take a month until the client actually
finds something that he likes and it's within his budget. And then when that
happens, we discuss all the different lenders that I have available to myself.
And what I'm trying to show clients is that sometimes, you know, the banks are great.
Don't get me wrong. I work with them. But sometimes clients need to understand
that the banks aren't always there to help them in a sense, even though you've been there three years.
But, you know, you maybe your financial situation may have changed or maybe become self-employed.
So there's a lot of variables involved. and that's where we'll
discuss you know what's the best product for you what's the best
you know obviously the rate is important but you
want to get qualified you want to get into that house and there are
many many ways to do that and people and that help
people make them understand there are other other options
for them so once we've decided lender and
product we send in for an approval once we get through the approval process
approved then you know i discuss with the client what the next steps are we
go through the application so I'm with the client literally I'm holding the
hand whether they're first time home buyer or repeat purchaser I'm always there
step by step right to the end and even afterwards.
Again, obviously that's, that's, I think that's important for people to know,
because again, not everybody's going to go through this process or know what
goes on in this process until they, you know, might listen into this podcast
and get this information from you.
So that's obviously a great start. As I was telling you before we started,
one of the things that I'm seeing a lot of, and maybe some of you listening
are going through this as well, is the discussion between fixed and variable rates.
And it's something that, you know, again, even myself who sees this information
often, I speak to, again, a lot of different mortgage professionals,
but I don't have enough, I would say,
background knowledge to be able to guide somebody on that.
So let's say right now, someone, you know, obviously had to,
they renewed back in 2020, obviously for some ridiculously low rate,
and now they have to sort of do it again.
So whether it's an example of something that you did recently or a hypothetical.
How would you explain to someone sort of in a sort of, you know,
like, I guess the term is,
you know, explain it to me like I'm like in grade five or explain it to me like
I'm, again, like I have no idea because I actually don't have,
again, like just working, working knowledge of it, but not detailed.
So maybe if you can, break it down as simple as possible for everyone to listen. Okay.
Well, I mean, there's advantage and disadvantage to both, right?
And it depends on everyone's financial situation and risk.
So let's start with a variable. Variables are great.
Let's say you needed to refinance or break the mortgage for any reason.
That penalty is only a three-month interest penalty.
So if your payment was $1,000 a month, let's say your interest from that was approximate.
I'll just make it simple numbers. They say $500.
So three months of the $500 plus discharge costs. So you're looking at about $1,500 roughly.
So that's a lower compared to, let's say, a fixed.
Usually it's around 3% of the remaining mortgage amount, but they have a calculation
based on what your current rate is and what the remaining term of your mortgage,
so they kind of do a calculation there.
Now, the advantages of maybe having a fixed is, let's say you're a first-time
homebuyer or you're on a strict budget, with a fixed mortgage,
your payments are set for the
duration of the term, whether it's the five-year term. So you can budget.
So if your payment monthly is $1,000, you know every month's $1,000.
So you don't have to worry about when, you know, the Bank of Canada comes on
and saying, yeah, we're increasing interest rates or keeping it the same or reducing it.
You know, you don't have to worry about that because those payments are going to change.
Now, with the variable, oh, sorry. And with the variable rate,
I mean, they're more dependent on the Bank of Canada when they make those announcements.
Right. So there are some lenders, well, they call them adjustable rates where
your payment will increase if the Bank of Canada increases their prime rate.
And there are other lenders, they call them the variable rate,
where your payment is structured like a fixed, but what changes is if the Bank
of Canada reduces the interest rate,
the prime rate up or down, your interest that goes towards your mortgage goes
up or down, but your payment stays the same.
So those are the two differences between, they call them adjustable and variable rates.
Okay. So what you're saying is, well, and just because I'm trying to think of
myself over the years as I've gone through this and I've always had these questions.
When it comes to a fixed rate, you're also able to get, and correct me if I'm
wrong, because I'm wrong a lot.
I'm okay with it. I don't have any issues with being corrected.
But with the fixed rate, you're saying that the payments can also be fixed to a certain amount?
So the payments, so basically if you receive a certain rate,
you know, we go to and lender A and they have a rate of, you know,
4%, that your mortgage payments are based on the 4% for the duration of the term.
So that does not adjust at all, that stays the same.
With a variable rate, it fluctuates depending on the prime rate.
If it goes up, if it goes down, that can, your payments can change.
However, let's say, you know, a few years ago, all of a sudden interest rates.
You know, variable rates are increasing, increasing, increasing.
With a variable rate, you have the opportunity to lock in to the lowest fixed rate.
Okay. So that's the advantage. And, you know, a lot of people that take the
variable rate have to understand that, you know, it can fluctuate.
So if you're able to, you know, withstand the fluctuations and you're depending
on your financial situation. I mean, a lot of people do take the variable rate.
Good. You know, again, obviously, again, this is the, this is the scenario.
And unless you've been, you know, unless you've been a first time buyer,
unless you've been a repeat mortgage client. And again, I've been in all these
positions and including where I've closed a mortgage.
So I've gone, I've had to go through that and said, okay, I'm going to be selling in a year or two.
And I was luckily, luckily at the time, and unfortunately some of these people
aren't in this business anymore, But luckily I was, I was able to get some good advice from people.
So the fact is, yeah, I, I, I definitely know of a few people that are renewing
right now, but will be selling in the next year or two.
In fact, I just had a client of mine reach out to me and give me a, an exact date in 2027.
She's retiring on a certain date and she wants the house sold as she's retiring.
She's got this really, really detailed plan. I love it. and I'm the same way
when I can, if I can plan my future to a certain degree.
Again, sometimes life changes those things, but that's her plan.
Any advice for people that are in that position where they need to renew,
but in the next year or two, they're going to be, or thinking about selling
or downsizing, whatnot.
Any advice you can provide for them?
Yeah, I mean, again, depending on their financial situation,
if they're, let's say in two years, they're planning on selling their home or
downsizing, but let's say selling their home and, you know, they're going to
move maybe to the Caribbean or down South, right?
So maybe a variable rate if they're comfortable with the fluctuation within the two years.
Or we can also look at a lot of lenders also have one, two, even three,
four-year terms, right? So we can look at that as well.
So we'll look at, you know, both options, see what's suited for each client, let's say.
And then we can go from there. And that's what I do. We sit down,
we discuss, and we do even hypothetical.
Let's say interest rates started going up. This is what your payments are going
to look like as time goes on based on your current mortgage.
So I really get into detailed with them to show them all their options and what
it will look like, not within the short term of, let's say, of six months to
a year, but what it's going to look like down the road for them.
Well, and exactly. And that's one of the things, Massimo, that I wanted to have
you on the podcast for is A, to sort of, you know, be, you know,
be an educator and be an advisor and be able to give people some,
you know, some, some, some real advice.
And, and I, I'm not, and again, obviously you, you've been on my podcast before,
you know, that for me, this is not about shock value. I'm not necessarily putting
the, the, the bait and switch headlines out there with, with my podcast.
I, you know, I almost, you know, in, in a lot of cases, it's probably just going
to be boring for some people, but that's sort of the reason why I want to make
it sort of a condensed, but an information packed session like we're doing today.
And again, thank you for taking us behind the scenes of the process.
And one of the last stories I'll add to the mix is that again,
because we just recently went through a transaction together.
And as I said before, one thing about this process, and I've met probably hundreds
of people in the mortgage business over the last 25 years, I've met them.
And there was sort of one person that I meet when, you know,
long before a deal happens. And then the person I meet when the deal starts
to get put together is a different person.
And very often that's the case where someone is not as well-versed or they're
not, you know, understanding that there's going to be obstacles.
And again, having gone through a, again, a mutual client recently.
And hopefully there wasn't too many variables there, but that's sort of the
process where I like to help people understand this was a client of mine that
bought their first place a few years ago, and it was time for them to do a move up.
So we actually went through the process.
And the good thing is I, I was able to get you involved in the process,
but this was after they had already sold, which I'm telling people,
even in this market, even if there, you know, is, is sort of any concerned about it.
I still tell my best clients that if it's possible to sell your property, close the deal,
get the cash, like, like have the, have the, have the suitcase full of cash
as the references that I make, and then be able to buy again.
For me, that's going to definitely improve our negotiating position.
And I believe it did for, again, our recent client, because of the fact that
if you're competing against another offer, especially one that has to sell their property,
prices could be almost the same, but the risk level is way higher on that person
that's still got a place.
So as far as you're concerned, because of the fact that you were able to help our mutual client.
What lessons and what, what sort of, I guess, what sort of advice would you
give, you know, a client in the similar position that's, that's going through
that, you know, maybe selling their first place.
Lots of first time sellers, by the way, Massimo, even my last few sales have
been first time sellers.
Like they bought in the early two thousands and their first time going through
the sales process and, you know, nervous, not sure what to do about it.
So maybe just a few sort of final words from you and then we'll,
we'll take it from there. Yeah, sure.
I think in this scenario, they've sold their house, so obviously they have money in hand.
Don't go crazy purchasing, go purchase a new car or racking up your debts or
getting your credit pulled tons of times because that will reflect it on your next purchase. Right.
So if you know you're going to purchase in the next few months,
I would hold off on those large purchases until you purchase that new home and
move in and have those keys in your hand, because every little thing reflects that.
And, you know, the more times, let's say you go shopping, let's say for a mortgage,
you go to one bank, you go to another bank, you go to a mortgage broker.
What happens is each time your credit will be pulled and will be hit.
And when that happens and, you know, they will see that you're searching for
you're searching for credit, you know, what's going on and your credit score
begins to reduce, reduce.
And then let's say you have accumulated some other debt.
So that all plays a factor in. My suggestion is if you have a little bit of
debt, have that paid off, hold off on large purchases because you want to keep
that credit score up. minimal debt, because all that plays a factor in when qualifying.
You know what? Those are really good parting words. And as far as what people
should be doing, and again, because I'm not an expert on this,
you know, the mortgage, the financing, all that stuff.
The one thing I do try to do is educate myself so that I can,
of course, know enough about, you know, debt and about money.
Putting money aside for my future, obviously to be able to teach my kids these
lessons as well, things that I've done wrong, which I've probably done everything
wrong over the years that you possibly think of working my way towards getting it right.
And again, having professionals and being in the room, this is,
I think this is why I sort of forced myself to be around people like yourself
who know what they're doing.
I always sort of, I benefit, I believe more than you do from these sort of podcast
situations because I'm always learning.
I'm always seeing what other pros and sort of the behind the scenes.
Actually, one of the podcasts that I'm working on next is a very detailed behind
the scenes sort of x-ray of what goes into a top real estate salesperson.
And I'm going to probably do one about you guys, what goes behind sort of what
the x-ray of what goes behind the top ranked mortgage person.
So I might have you involved with that when I do that.
But once again, Massimo, you've, you know, you were kind enough to join me yesterday
and, you know, and give me your time again today.
And I'll, I'll hopefully be able to put this out soon for everyone to hear.
But in the meantime, when they do want to reach out to you and find out more
from you directly, what's the best way for them to reach you?
Well, the best way to reach me, I, as you know, Paul, I work evenings,
you know, after hours, they can reach me or on weekends.
Yeah, I can vouch for that because I was, I think I was emailing you on Sundays.
A Sunday. We're replying on Sundays.
That's, you know, that's not everybody, not everybody does that.
No, no, I'm really there for my clients where, you know, and for my business partners.
Best way to reach me, you can give me a call 647-688-2582. You can call me or
text me at the number, or even send me an email at Massimo, M-A-S-S-I-M-O at mortgageville.ca.
And, you know, I'll get back to you as quickly as possible within the hour sometimes,
or even sooner, or pick up the phone.
Yeah, no. And I know you do, because again, I was, you know,
we were in a situation where you, you know, you had to be, you know,
available and, and your communication was again, excellent.
Everything was, you know, so great about that. And we, and we ended up with
a very happy client. Just talked to myself yesterday as well.
And that's the kind of thing that for me has to be part of the process.
It always has to be about how do we make that client so happy that they,
you know, want to work with both of us again. And of course,
you know, that leads to more business for you, leads to more business for me,
and of course, helps those clients succeed.
So thanks again, Massimo. Appreciate you joining me here on the podcast.
Thank you, Paul. Appreciate it. No problem.