Be Well Advised Series:
Melissa Wood
RBC Mortgage Specialist

About Melissa

Bio:

Melissa Wood has worked for RBC for the past 15 years with 11 of those years in mortgage lending. She specializes in first-time home buyers, investment/revenue properties and lending to individuals who are self-employed.

Kelowna Neighbourhood:

Melissa lives in South East Kelowna. "Love my area. I feel like I live in the forest, surrounded by mature trees. We have big lots, so lots of room for Bella to run around the back yard. We are only 12 minutes to the mall, but yet we feel like we live out of town also love being surrounded by orchards and wineries."

Contact Melissa

Melissa is on the go and mobile - she works out of all the local Kelowna RBC branches. Feel free to drop her line with any questions you may have at moc.c1685647661br@do1685647661ow.w.1685647661assil1685647661em1685647661

Interview Transcription:

Lora Proskiw:
Hi everyone. It's Lora + Christy and I'm Lora Proskiw.

Christy LeGeyt:
I'm Christy LeGeyt and we are licensed REALTORS with Royal LePage Kelowna and we run our own partnership, Lora+Christy Real Estate.

Lora Proskiw:
As everyone is aware, we are experiencing unprecedented times. There are so many unknowns and uncertainties. At the end of the day we think people need knowledge and when you have knowledge you are better equipped and feel more competent to make the right decisions for you and your family.

Christy LeGeyt:
So during this time, Lora and I've had a lot of time to jump on calls and chat with clients and we get a ton of questions. So we kind of thought through this time, maybe a bit of a giveback that we could do is take these questions that we're getting and formulate a little list and talk to a professional in our community. So we've developed our Be Well Advised series with Lora+Christy Real Estate.

Christy LeGeyt:
So first up, we're going to talk with Melissa Wood. So Melissa, thanks for joining us today. Melissa is a mortgage specialist from RBC. She has worked at RBC for 15 years, 11 of them are in lending. She specializes in first time home buyers, investment properties, and lending for self employment. And she works at all branches, so she's easily accessible.

Melissa Wood:
Thanks for having me girls.

Lora Proskiw:
I think one of the questions that we're getting right now about financing. It's kind of a two part question. Are buyers are still able to get mortgages? That's number one. And if they were already approved before kind of mid-March, are these approvals still good?

Melissa Wood:
Yes. Clients are still able to get mortgages. I think people that are less affected by COVID-19 and are still working and don't have any income destruction aren't really being impacted. The banks are doing some extra due diligence and asking questions just to make sure that you know their income isn't going to be disrupted in the future because we don't want to put clients in a position that they can't afford the property as well. And then there are some of those clients that you know aren't working and have been laid off are on the CERB. There are actually still are options for them too, so there are some scenarios where we're getting a little bit creative and we can actually use some of that CERB income if that helps them get qualified. Or if they are in an industry where it's strong and you know they're likely going to be going back to work soon, then we can actually use some of that pre-COVID income, too.

Melissa Wood:
So yeah, definitely clients can still get qualified. So I think if you have an existing pre- approval in place you haven't purchased yet... You don't have an offering on a property yet... You should talk to your mortgage lender and your professional because your situation has changed. But at RBC, if you do have a firm approval... So what that means is, let's say you've put an offer in on a property, you've removed your conditions, now you don't have a job. If you had a firm rule from RBC, we are behind you. We're still going to give you your financing. So that's a really good news story.

Christy LeGeyt:
That's good to know. And so what about timelines? So a lot of these contracts we're writing are two weeks for due diligence. Is that still a good timeline for getting approval on financing?

Melissa Wood:
Yeah. You know what... Honestly, I think things right now, some things seem to take longer, but our credit department still has most of their staff working so we're still getting... As long as we can gather information and appraisers and et cetera have availability, then we're still able to get deals done within that timeframe.

Christy LeGeyt:
Okay. That's great.

Lora Proskiw:
Also rates... Everybody's talking about rates and, "oh my gosh, rates are so low and you know, take advantage of that." I don't know if this is case specific, but can you comment... Are you recommending a variable rate right now? Are you more leaning towards the fixed rate where you... Whereas... What's your advice on that?

Melissa Wood:
Rates have been a crazy roller coaster ride over the last couple of months. They plummeted... You know when COVID-19 first kind of became a thing here in Canada. So I've seen rates go down like a ton. Like within a couple of days they dropped like half a percent and variables bend down cause the government's trying to still make sure the economy is moving and people are still purchasing.

Melissa Wood:
So yeah, variable is good... But I kind of take an approach with clients that like if you're a gambler, yeah, variable might be the right thing for you. If you're okay with that fluctuation, but you know a variable is a five year term, so if you don't think that you can handle your interest rates going up, possibly your payment going up if you're with another lender... RBC, your payment doesn't go up. But that as a possibility out there. Then variable probably isn't the best for you.

Melissa Wood:
If you're going to be freaking out in six months once rates are going up, probably not the way to go. But know with variable you can lock in at any time at RBC. I don't know what other lenders, but with RBC you can. So that's kind of a little bit more reassuring. Personally, I'm a conservative person. I usually take fixed. Fixed rates are still below 3%. In the grand scheme of things, there's still some really good fixed rates out there too. So honestly I think it kind of depends on the person. So I'm always having that in depth conversation with people. But rates are low. Yeah, it's a good time to be renewing or, or purchasing.

Lora Proskiw:
That's good.

Christy LeGeyt:
Another interesting topic that's kind of a bummer of a topic for a lot of people, if that's happening to you, is foreclosures. So is RBC forecasting them to increase? Are we going to see more distressed sales? I know a lot of buyers that are looking right now, that are like our investment buyers, are thinking, are we going to scoop up something?

Melissa Wood:
Yeah. You know what I've been on... I'm probably on two or three conference calls a day right now with lots of different people at the bank. Our hedge managers haven't really brought up foreclosures, so don't think that that's like something that's on their radar yet. However, my brain thinking, you know, with people that are losing their jobs and when things go back to our new normal, as they're saying, a lot of these businesses might not be surviving. So who knows if they're going to be able to afford their payments. I really hope that people don't lose their properties in all of this, but I think it could be a possibility. But RBC is not forecasting it yet.

Lora Proskiw:
Okay. Well yeah, I think it's just something... I mean I presume it's just a very fluid situation and if somebody is opportunistic that way, just get in touch, get pre-approved, maybe they will be able to find an opportunity. But like you said, coming from a place of hoping that everybody is able to keep their housing in place.

Melissa Wood:
Yeah, and you know what, it's... A couple of years ago when the government came out with a stress test, they were qualifying clients now at a higher payment than they would have. So let's hope that they can afford these mortgages because we the banking industry was projecting that maybe clients might not be able to, so that's why they have to qualify at that higher rate. So hopefully that will help, too, that maybe people actually have more flexible income than they would have before because they were qualified out of that stress test.

Lora Proskiw:
Right. Okay. What about, I was actually listening to CBC today and they were doing a talk about deferred mortgages and that sort of thing. There's a lot of... I wouldn't call it rumors, but just maybe some misinformation circulating. Can you clear that up for us please? If you were to defer your mortgage, people are saying the interest rates are compounding at the end of it or what are they saying? Tell us what it is.

Christy LeGeyt:
Yeah, so at the beginning when this came out that you could defer your mortgage for up to six months payment, a lot of people thought that it was just a mortgage break and that we were basically giving them a break and not charging them any interest. Definitely not the case. I've suggested from the beginning when clients have contacted me that you know, if you can make those mortgage payments, make them. The deferral is there if you have an issue with paying your mortgage due to COVID-19, but you still want to be paying your mortgage. Yes, the interest is compounding.

Christy LeGeyt:
So basically what happens is... Let's say your interest payment per month was $500 so now that $500 in interest you didn't pay down gets added to your mortgage balance, and then you're paying interest upon interest. So not only is your mortgage not paying down as it should be, the balance is actually going up because it's adding on the interest that you haven't paid and then you're paying interest on that interest. So that's how compounding interest works. I'm glad that it's there. Lots of people need this, but if you don't have to, you should pay your mortgage. Don't defer if you don't have to.

Lora Proskiw:
Right. No, I think that's really good advice. And I think at first people were thinking, "Who-hoo," but I got to read the fine print and that's always kind of our recommendation. But of course our number one recommendation is just get in touch with your mortgage professional. They explained to you the ramifications of that decision.

Melissa Wood:
Yeah, I think the media has blown out of proportion a little bit. Like, we're not making a bunch of money off this. But there is... You are paying a little bit extra to do it.

Christy LeGeyt:
Yeah.

Lora Proskiw:
There's been a lot of different... There's been webinars all over the place and Zoom calls everywhere. We sat in on the Urban Development Institute's last webinar and they were just talking about development in our community and I guess this is a little bit crystal-ball type stuff, but there was talk of a surge in real estate in Q3 and Q4. Does RBC have any thoughts on that? Has there been any kind of water-cooler talk about what's going to happen in Q3, Q4?

Melissa Wood:
We're hearing the same thing. So I've been on a few different conference calls about that too. So they are projecting that the fall is going to be like our spring this year because our spring is kind of halted and a lot of people aren't purchasing because they're either worried that they won't be able to make their payments, or maybe they don't think that they can. So yeah, they're projecting that the fall is going to be a surge real estate as well. I'm hoping that the financing is going to be normal, just business as usual by that time. Every day lately there's something new coming out about what we either can do or what we can't do. So things are evolving quickly and quite a bit. But I'm hoping by the fall that real estate should be booming again, and we'll be doing business as usual is what my hopes are.

Lora Proskiw:
Yeah, and we share that sentiment. Christy and I are both really calling this a little bit of a stall. We're hoping that specifically Q4, there's a real resurgence in the ability of people just to move around a bit more. Of course being socially responsible, we want to make sure that we're not doing anything that puts the public or our clients in jeopardy. But we are thinking that the fall is going to be our spring. So we're rallying for that. But I think this was very helpful. I think you cleared up a lot of questions. Are there any questions that you're getting right now really that you would love just to communicate to the public?

Christy LeGeyt:
I'm sorry I just totally jumped in there. Like one thing I'm thinking Melissa is like how have you actually had to pivot your business? So cause I would assume like during a day you probably do a lot of face to face meetings, but that must be different now. So how have you pivoted and innovated your business?

Melissa Wood:
Oh yeah. Everything's totally different. I actually prefer to do things face to face because I feel like I can help clients a little bit easier when you get in front of them and you can help them. But we've had to change the way that we do things. So I'm doing a lot of conference calls with clients... Setting up a lot of telephone meetings... Things over email. I'm actually still doing quite a few pre-approvals. So people are still reaching out and wanting to get pre-qualified. I think some people are using this time as an opportunity that maybe they can get some good deals right now on property because of that.

Melissa Wood:
So yeah, things are definitely different. I'm working at a home office with a three year old times are challenging. But you know what? I've also taken it as a time to learn new technology. Like RBC's come up with some new e-signing technology, which has been super cool. Clients have loved it... So much easier. So there are some good things that have come out of this.

Christy LeGeyt:
Yeah, I think not everything is a negative. Right. And I think that at the end of the day we have to find a silver lining in everything. It's unfortunate that we have to try and find it in this, but it is what it is.

Melissa Wood:
Yeah.

Lora Proskiw:
Yeah. So Melissa, if somebody wanted to get in touch with you and chat with you about mortgage rates or pre-approvals where can they find you?

Christy LeGeyt:
I can give you my information right now, like my phone number, my email address, whatever you like. I think that they should just get in touch with you guys first because they're probably going to be your clients, or your prospective clients if they're following your feeds, and then we can all work on them together. I'm available by text, email, phone... Whichever is easiest for everybody.

Lora Proskiw:
Okay. Well that sounds good. Well, Melissa, we really appreciate you taking the time with us today. We love working with you. It's always just a-

Melissa Wood:
Awesome. I love working with you guys too and also feel really valued that I can hopefully help some people, and answer some more questions. But just know we're just a phone call away. We're still working. Some of the branches might have limited hours or being closed, but we're all still here to help you.

Lora Proskiw:
Great. That's wonderful.

Christy LeGeyt:
Well, thanks so much. Yeah, we appreciate your perspective, your expertise, and I guess that's, that's it for us too. So I guess Lora and I are going to sign off and until next time, be well-advised.