Laurin Jeffrey is a real estate salesperson. He has found that, while most people have experience with products like credit cards, car loans or leases, mortgages have an entirely different set of terminology that can sometimes be confusing for home buyers.
Laurin believes basic financial literacy is important because people need to establish a good credit rating before they try to get a mortgage or other major loan. "If you don't have a basic understanding of how credit works, you will find yourself sorely disappointed when you go to the bank and ask them to give you a couple hundred thousand dollars. If you can't manage a thousand-dollar credit card, they are not going to let you mismanage a loan on a house."
A lot of Laurin's clients look to him for advice on how to begin the financial side of buying a house. People often ask him: How can they find a mortgage? How much should they ask for? What kind of down payment do they need? How much will the monthly payment be for their loan?
To help his clients make the best financial decisions for their specific needs, Laurin often recommends the interactive tools and various publications offered by the Financial Consumer Agency of Canada (FCAC). "I really like the Financial Consumer Agency's tools because it is a good independent source to give to people. Being able to point people to these tools allows me to offer a level of service that is a little bit more. It also shows people you care and that you are not just chasing the commission."
This success story is part of a series of testimonials that can be viewed on FCAC's website at fcac.gc.ca.
Learning a bit more about finances can prevent you from making really catastrophic mistakes. My name is Laurin Jeffrey and I am a real estate salesperson. Most people have experience with credit cards, car loans, leases, these sorts of things — but mortgages have an entirely different set of terminology. They have a term, but it is not quite the same as the term of a loan. They have an amortization period, which baffles almost everybody. The way the interest works, compounded semi-annually, not in advance — all these fun sort of terms make absolutely no sense to anyone who is not an economist.
Basic financial literacy is important because people need to have decent credit before they try and get a mortgage, before they try and get a loan, anything like that. A mortgage being the biggest loan you are ever going to get, if you don't have a basic understanding of how credit works, you will find yourself sorely disappointed when you go to the bank and ask them to give you a couple hundred thousand dollars. If you can't manage a thousand-dollar credit card, they are not going to let you mismanage a loan on a house.
When a couple first comes to see me, a lot of them look to me for advice on how to begin even the financial end of things. How to find a mortgage? How much should they be looking to get? What kind of down payment do they need? What is it going to mean for a monthly payment? You have to ask people, what are their lifestyles? What do they do? Do you like to go out for dinner? Do you like expensive coffees? Do you go to the movies? These things all play a role, because if you suddenly spend all your discretionary income on a mortgage, sitting around on milk crates eating Kraft Dinner every night is going to lose its appeal real quick.
I really like the Financial Consumer Agency tools because it is a good independent source to give to people. The ABCs of Mortgages, Shopping Around for a Mortgage, the Mortgage Qualifier Tool, the Mortgage Calculator Tool, and Shopping Around for a Reverse Mortgage. These are all great tools.
A lot of people seem to have this idea in their head: "Well I can afford x per month, so that means I can afford a house that costs y." But when you sit them down in front of the qualifier tool and they can punch in all of the different numbers, and it sort of basically says "OK if you want to buy something for $400,000, you have to have an income of …"
Real estate has changed over time where we are not necessarily the sales people I think were our parents' real estate agents. We are more of a facilitator, we are a helper. Being able to point people to tools such as the FCAC website, it allows me to offer a level of service that is a little bit more and it shows people you care. You are not just chasing the commission; you actually care about them and their future, and their home. And to have them think of you in that way and remember you in that way, I mean that makes you feel pretty good.