The Hidden Mortgage Costs Canadians Need to Know

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And I'll be brutally honest here. My first home
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purchase, I came from being, my background was
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marketing. I didn't know about land transfer
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taxes. My realtor never told me. My mortgage
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broker never told me. The lawyer didn't tell
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you? My real estate lawyer told me. He's like,
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do you have your land transfer tax ready? Right
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the day it was due. And I was like, wait a second.
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What is, what are you talking about? Welcome
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to FinTalk, a judgment -free zone for all things
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money. The average mortgage in Canada is amortized
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over 25 years. That's a quarter of your life.
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In many major cities, homes cost 8 to 10 times
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the average household income. Buyers are taking
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on $600 ,000, $700 ,000 in debt, sometimes more,
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all in one signature. And between 2022 and 2024,
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after aggressive rate hikes from the Bank of
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Canada, payments jumped for hundreds of thousands
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of Canadians. So here's a real question. If this
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is the biggest financial decision most of us
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will ever make, do we know what we're doing?
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Or just wishing and hoping and praying? And when
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it comes to renewals, do Canadians negotiate?
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Or just sign? Sign to the previous bank? Today,
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I'm joined by Bekem Merdida, Managing Director
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of Home and Mortgages at Questrade. formerly
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from Rocket Mortgage, and Jesse Abrams, co -founder
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and CEO of HomeWise. We're talking mortgages,
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strategy, and the questions people wish they'd
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asked before signing. So let's get into it. Welcome,
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guys. Very excited to talk to you guys. You guys
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have been in this space for a very long time.
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Do you remember signing your first mortgage?
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And what was that like? I'll start with you,
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Jesse. You know what? That's actually one of
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the reasons we started the business. I was a
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business major in university. I thought I was
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someone who knew about finance, but when it came
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to mortgages, I knew nothing. So when I bought
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my first home, I had a friend who was my realtor
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who I always liked the line from Spaceballs.
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He sort of introduced me to his friends, cousins,
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former college roommate. That's how I found the
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mortgage broker. And I had an hour and a half
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phone call with her. Then she sent me a four
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page Microsoft Word document to print, fill out,
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scan and send back. Then she wanted to meet me
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in person. Then she told me my mortgage option
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with no explanation. Then I had to meet the lender
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in person, which was about a half hour away.
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And it was like the classic. what is this? I
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have no idea if I made the right decision and
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there's got to be a better way. And it's crazy
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that that's the world of mortgage, but that was
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my bad first mortgage experience. And that was
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your first mortgage that you ever signed? My
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first, yeah. And it was - So lots of learnings,
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lots of learnings from that one. A lot of great
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learnings for sure. Okay. Okay. How about you,
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Vikim? So I actually was born and raised in the
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States and grew up over there. I actually started
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working for Rocket Mortgage in 2012, long before
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I ever got my first mortgage. So I'd actually
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closed thousands of mortgages for other people.
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Oh, nice. You had the inside track. I did. And
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I'd seen the way that it was done in the U .S.,
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but I didn't get my first mortgage until I moved
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to Canada in 2014. And when I did, I got to see
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the contrast between how it was done in the U
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.S. and how it was done in Canada. And it helped
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me see for myself, like just in my eyes, how
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far behind Canada was. Basically, the story is
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I went into a couple different banks. I got denied
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by all of them. What do they know that we don't
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about you? Well, at the time, I hadn't yet got
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my permanent residency. So I was trying to do
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it as a non -permanent resident. It was a whole
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thing. um yeah i got denied by the by the banks
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and it was pretty humiliating in front of my
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you know new wife and then um was trying to figure
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out like what am i going to do and actually the
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real estate agent that i was working with said
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i have a broker that i work with and you should
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talk to her so the broker within just a couple
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of days said hey i have a local credit union
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and you know for x amount of down payment like
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we can we can make this work so uh not the best
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rate not the best terms but they found a way
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and i actually got my mortgage to them that said
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it was extremely painful Um, they, same thing.
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They sent me a word document with everything
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that was required. Uh, they told me I had to
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email them all of my documents and I'm like,
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is this secure? They're like, no, probably not.
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Um, but I went ahead and did it anyways. Cause
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what else was I going to do? And I had to turn
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all these documents into scan documents, long,
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like emails. It was just, it was so messy. And
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I remember just like right up until the last
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day before signing, I still didn't know whether
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or not I was going to get this mortgage and I
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was deeply stressed and I got it. The elation
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came over me. I was so happy that I got it done,
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but I knew like there just had to be a better
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way and I'd already seen a better way. So I'm
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like, if we could take some of these learnings
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from the U .S. and bring them to Canada to make
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things better for Canadians, and that would be
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really a big win. So two things you said, I think
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that really highlight what this process is like
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for the average person is. Humiliation and stress,
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right? It feels like there's a lot of judgment.
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Like, am I going to qualify? Am I going to get
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a good rate? Am I good enough? Am I worthy? If
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you think and dig down. And the flip side is
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like banks make a lot of money on mortgages,
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right? So in some ways it feels like the bank
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is doing you a favor by giving you a good rate,
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but they're making a lot of money. All the banks
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in Canada are making a lot of money. How do you
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unpack that? Like for an average person, it feels
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so difficult and so judgmental, but it shouldn't,
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right? Yeah, it's a weird thing, right? And I
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mentioned this earlier that we're not taught
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about this in school. So you go into the process,
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which is very emotional. I'm going to buy my
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first home. You might be doing it by yourself
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or a significant other. And there's that white
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picket fence idea that you grew up with that
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you're going to have your dream of home ownership.
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And it's so exciting. And then when it gets to
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the mortgage process, it's almost like there's
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a cover of smoke at every stage. You go speak
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to your bank and they're going to tell you some...
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basic information to try to get you through the
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door. They might not answer all the questions
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you have upfront and they'll say, we'll get back
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to you later because they want to get you through
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the door as quickly as possible to get you to
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sign the deal. And I find that a very big problem
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because this is arguably the largest financial
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decision of your life. And we do things like
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shop around for flights and for vacations and
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all these things. But when it comes to mortgages,
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A big problem in Canada, and Bekem mentioned
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this earlier, we're so used to not having great
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experience in Canada that we just sort of take
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what we get. Right. And yes, the banks are doing
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you a favor on quotation marks by giving you
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this loan, but there's a lot of lenders in this
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country. So from a Canadian's perspective, we're
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sort of missing out on that opportunity to save
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money and to get answers to our questions by
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not shopping around or using a broker like Bekem
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mentioned earlier. And so, Bekem, if you think
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about your first mortgage and now knowing what
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you know, and obviously you've got the experience
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of the U .S., if there's somebody here that's
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looking to buy their first home and looking to
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close, what do you think, like three things you
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wish you had known that they should know when
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it comes to getting a mortgage? Yeah, first thing,
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I think it's important that we remember no one
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wants a mortgage, right? So a mortgage is just
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like a necessary evil for getting a home. People
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want a place to... And people never used to get
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mortgages. Like there was throughout history,
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you built with what you had. You could afford
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just one stone. You put one stone on a piece
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of land and that's all you had. The Latin of
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mortgage is death pledge. It literally is not
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something great in any way from the formation
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of it. Yeah. Mortgage is pretty well a new concept.
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If you extend your time horizon out a little
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bit. Um, even the, the idea that like, you know,
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it started with like mortgages, you had to put
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50 % down and then it was like, okay, you know,
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we'll let you finance up to 80 % of the estimated
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value of this property. And then took government
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programs like CMHC and things like that, in which
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like everyone sort of pooled funds to allow people
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to get into homes with less of a down payment
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to remove some of those barriers. And all of
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it, I think is a great program. It's, it's clearly
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worked, but now you can buy homes for as little
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as 5 % down. Um, but what are the, what are the
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things that people should know you'd ask for?
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For three. A few come to mind here, so I'll try
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to list them off in the order in which they come
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to me. But I think the biggest thing that people
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should think about when it comes to having a
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mortgage is there are things beyond the interest
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rate. So we are so trained, first and foremost,
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to think about rate as the leading factor that
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should drive our decision on getting a mortgage.
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And that is, I think, a big missed point in the
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mortgage industry is just to educate people that
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there are things that matter on a mortgage besides
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rate. Specifically, prepayment privileges come
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to mind. The ability to prepay your mortgage
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early. Break penalties on mortgages matter. These
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are all things that I think a good mortgage advisor
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really takes time with a client to explain all
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the implications of getting a mortgage. So rate
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matters, but so do all these other factors, which
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brings me to my second point, which is shop around.
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And try to understand like what actual options
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exist for you. So often I will see somebody who's
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in a mortgage, go back, review this situation
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and find out they were actually eligible for
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a significantly better mortgage. But no one actually
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took the time to explain that to them. And that
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is a really big, big deal that has lasting implications.
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Sometimes, you know, one year, but sometimes
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as much as 10 years and things like that, depending
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on the way these things are renewed and how job
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changes play out in life and things like that.
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So there's a lot of factors that. should be considered
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that i think people just miss and and the third
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thing i think is just like getting somebody on
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your side that i can actually do the shopping
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around because i think the biggest mistake that
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most people make is they think just because someone
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holds their checking account they give them a
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great mortgage rate right so many times i've
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heard from people that you know like i got my
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mortgage from you know x uh bank and They give
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me a great rate because, you know, I've got $6
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,000 for my checking account. So there's trust.
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They're like, oh, I already gave them my money.
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They must have my best interest at heart, which
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isn't always the case. One of you guys might
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know this step better than me, but it's something
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to the tune of like 80 plus percent of Canadians
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actually never switch banks from the original
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bank that they get their bank account with. They
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continue to hold that for life. And usually like
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their parent opened it up for them when they
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were like 16 years old or something like that.
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And it's like it's like a life sentence of, you
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know, it really it's a loyalty tax. on on consumers
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that they never take the time to take a step
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back and say are they really taking into account
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all my needs and it's not to say that um they
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don't but there is a definitive if you look at
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the underlying unit economics of how these models
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work there is a definitive loyalty tax by just
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keeping all of your finances in one place and
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never shopping that around that's a big mistake
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so the big tip is shop around don't look at just
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the rates there's more to a mortgage than just
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the apr absolutely yeah What about you, Jesse?
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He touched on the really important points, but
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I'm going to take this in a slightly different
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direction. There's so many people that we speak
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to all the time that don't think they could ever
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afford a home. They are so nervous and they've
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never gotten a mortgage pre -approval before.
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So what I always say to people is get off those
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real estate listing sites and having dreams and
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saying in 20 years, I'll be able to buy a home.
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Go to a company like one of ours and go get a
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mortgage pre -approval. Figure out what you could
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afford. And have that purchasing power in hand
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so that when you go to speak with a realtor or
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look at homes, you actually can understand what
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you could afford. The other thing I would say
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too is, and I'm going to talk purely affordability
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now because Bekem talked about, I think, the
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most important mortgage aspects of it. Think
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about what the long -term viability is of that
00:11:00.580 --> 00:11:02.679
first purchase. So are you going to be there
00:11:02.679 --> 00:11:04.480
for more than five years? The average first -time
00:11:04.480 --> 00:11:06.320
homebuyer in Canada actually breaks their mortgage
00:11:06.320 --> 00:11:08.000
before the end of their first five -year term.
00:11:08.179 --> 00:11:10.820
The reason for that? Unlike myself, I bought
00:11:10.820 --> 00:11:13.419
my first home single, bought my second home,
00:11:13.480 --> 00:11:15.600
married to a wife with one kid born and another
00:11:15.600 --> 00:11:18.120
kid in the oven. And that was five years apart.
00:11:18.279 --> 00:11:19.820
So a lot could happen in a five -year mortgage
00:11:19.820 --> 00:11:22.080
term. So it's really important to think about,
00:11:22.159 --> 00:11:24.120
okay, are you maximizing your affordability?
00:11:24.799 --> 00:11:27.580
Is that the right idea right now? Do you know
00:11:27.580 --> 00:11:29.340
about land transfer taxes? Do you know about
00:11:29.340 --> 00:11:31.419
the fees that come into when you are buying a
00:11:31.419 --> 00:11:33.740
home? So I would say really think about the big
00:11:33.740 --> 00:11:36.399
picture of home ownership and how that first
00:11:36.399 --> 00:11:38.200
home could potentially affect your next home
00:11:38.200 --> 00:11:40.440
purchase and everything that goes into it from
00:11:40.440 --> 00:11:42.460
real estate fees, land transfer taxes I mentioned.
00:11:43.460 --> 00:11:45.679
And then the last thing I'd mention as well is,
00:11:45.759 --> 00:11:48.820
Bekem did mention this, but get a second opinion.
00:11:49.279 --> 00:11:51.879
If you do go to a bank and you trust them and
00:11:51.879 --> 00:11:53.820
you're like, I've worked with them forever. A
00:11:53.820 --> 00:11:55.379
line I've heard from many people is, oh, my bank
00:11:55.379 --> 00:11:57.240
likes me, so they're offering me a 30 -year amortization.
00:11:57.919 --> 00:11:59.580
I'm like, no, no, no, they don't like you. It's
00:11:59.580 --> 00:12:01.879
because you have 20 % down. Like, that's the
00:12:01.879 --> 00:12:05.139
reason why. Get a second opinion. Be it if you're
00:12:05.139 --> 00:12:07.080
going to go to another bank or go to a mortgage
00:12:07.080 --> 00:12:08.600
brokerage or come to a tech company like our
00:12:08.600 --> 00:12:11.080
own, get a second opinion because you want an
00:12:11.080 --> 00:12:14.139
unbiased advisor in the experience. And I think
00:12:14.139 --> 00:12:16.059
that's a really important encapsulation of it
00:12:16.059 --> 00:12:18.100
all. Yes, shopping around is great, but don't
00:12:18.100 --> 00:12:20.639
just go to one place overall because you might
00:12:20.639 --> 00:12:22.759
not understand your pure affordability. I was
00:12:22.759 --> 00:12:25.299
denied by a specific bank on my second mortgage
00:12:25.299 --> 00:12:27.879
and my mortgage broker, being from HomeWise,
00:12:27.960 --> 00:12:30.960
got me into a different bank. Both big banks,
00:12:31.080 --> 00:12:33.519
one of the big red and blue and green colors
00:12:33.519 --> 00:12:35.759
that we all know about, but they have different
00:12:35.759 --> 00:12:39.919
adjudication standards. So don't just go to one
00:12:39.919 --> 00:12:41.620
lender and maybe get turned down and realize
00:12:41.620 --> 00:12:42.899
you might not be able to get a home anywhere.
00:12:43.080 --> 00:12:44.759
And McKim talked about that with his story of
00:12:44.759 --> 00:12:47.120
his first home as well. So really, really shop
00:12:47.120 --> 00:12:49.179
around. Yeah, I think the point that you both
00:12:49.179 --> 00:12:50.879
have mentioned, but in different ways, is that
00:12:50.879 --> 00:12:53.860
shopping around is important because the way
00:12:53.860 --> 00:12:55.879
mortgages work, the adjudication that you just
00:12:55.879 --> 00:12:58.559
talked about is different. And everybody, every
00:12:58.559 --> 00:13:01.220
bank has a different appetite. They call it risk
00:13:01.220 --> 00:13:03.299
appetite of what they're willing to underwrite,
00:13:03.379 --> 00:13:05.720
which means how much loan, how much money they're
00:13:05.720 --> 00:13:07.919
willing to give you. And that could be different
00:13:07.919 --> 00:13:10.440
for the exact same person, depending on which
00:13:10.440 --> 00:13:12.799
color they choose or whether they're going to
00:13:12.799 --> 00:13:14.539
a credit union or whether they're going to a
00:13:14.539 --> 00:13:17.860
tech, fintech startup. So I think the key point
00:13:17.860 --> 00:13:20.279
of why shopping around matters is because you're
00:13:20.279 --> 00:13:22.779
not actually the same. You don't look the same.
00:13:23.100 --> 00:13:24.600
to everybody that you meet. And I think people
00:13:24.600 --> 00:13:27.000
forget that because I think it could feel so,
00:13:27.000 --> 00:13:29.100
you mentioned, it's such an emotional decision
00:13:29.100 --> 00:13:31.519
and it could feel so hard to get a rejection
00:13:31.519 --> 00:13:33.419
that you're like, can I, I don't want to get
00:13:33.419 --> 00:13:35.039
rejected again. I don't want to go to another
00:13:35.039 --> 00:13:36.879
person and go through this whole thing because
00:13:36.879 --> 00:13:39.980
it is painful and get rejected again. One thing
00:13:39.980 --> 00:13:41.519
that I think people don't understand and you
00:13:41.519 --> 00:13:43.820
guys have touched on a little bit is, you know,
00:13:43.820 --> 00:13:46.240
when you think about a loan, the amortization
00:13:46.240 --> 00:13:49.360
period tends to matter a lot. And we talk about,
00:13:49.440 --> 00:13:51.539
hey, now we're getting people before you couldn't
00:13:51.539 --> 00:13:53.159
even, you had the cash, you bought the home.
00:13:53.299 --> 00:13:55.159
Otherwise you didn't have the home. If you didn't
00:13:55.159 --> 00:13:57.200
have the cash, no home. And then we're like,
00:13:57.259 --> 00:13:59.000
hey, just have half the cash. Okay, fine. Just
00:13:59.000 --> 00:14:01.919
have 5%. Have five of the $100 to get a home.
00:14:02.279 --> 00:14:04.440
But then there's more to that. And it's not just
00:14:04.440 --> 00:14:07.720
the interest because 1 % of $700 ,000 is a lot
00:14:07.720 --> 00:14:10.940
of money. But now you drag it over your lifetime.
00:14:11.100 --> 00:14:13.340
So how could somebody who doesn't really understand
00:14:13.340 --> 00:14:17.230
this concept really unpack amortization? There's
00:14:17.230 --> 00:14:19.289
a line I love, which is you date your rate, but
00:14:19.289 --> 00:14:21.549
you marry your amortization. And it's important
00:14:21.549 --> 00:14:23.590
to look at because people look at their five
00:14:23.590 --> 00:14:25.529
-year term and they say, well, this is my rate.
00:14:25.570 --> 00:14:27.370
And it's so high right now because I bought in
00:14:27.370 --> 00:14:30.070
2023 and rates are higher. But your amortization
00:14:30.070 --> 00:14:32.509
is what really matters. And recently we've changed
00:14:32.509 --> 00:14:35.990
from just allowing 25 to 30 years for some high
00:14:35.990 --> 00:14:38.490
ratio mortgages. And what that allows for is
00:14:38.490 --> 00:14:40.490
it increases affordability, which is great because
00:14:40.490 --> 00:14:42.269
a lot of first -time homebuyers have to get into
00:14:42.269 --> 00:14:44.950
the market. And it's important for us to find
00:14:44.950 --> 00:14:48.179
ways to do that. But that extra five years, I
00:14:48.179 --> 00:14:50.980
think the stat is it adds 23 % more interest
00:14:50.980 --> 00:14:52.759
paid over the lifetime of your mortgage. Wow.
00:14:53.019 --> 00:14:55.820
That's substantial. Having said that, if you're
00:14:55.820 --> 00:14:57.519
a first -time homebuyer who's buying their first
00:14:57.519 --> 00:14:59.519
condo and they're like, this is my way into the
00:14:59.519 --> 00:15:01.080
market. I'm going to be here for five to eight
00:15:01.080 --> 00:15:03.220
years. Well, you're theoretically not paying
00:15:03.220 --> 00:15:05.659
that 23%. You are paying more interest over the
00:15:05.659 --> 00:15:07.240
start of your mortgage because your amortization
00:15:07.240 --> 00:15:09.980
is longer. But it's a way to afford more. It's
00:15:09.980 --> 00:15:11.620
a way to spread your monthly payments out over
00:15:11.620 --> 00:15:14.259
a longer period of time. And it's a way to get
00:15:14.259 --> 00:15:16.649
into the market. I think that's why it's so important
00:15:16.649 --> 00:15:18.909
when you are speaking to a mortgage agent, mortgage
00:15:18.909 --> 00:15:21.370
broker, mortgage advisor, is to understand what
00:15:21.370 --> 00:15:24.309
that difference of that 25 or 30 year, or even
00:15:24.309 --> 00:15:26.409
myself, my first mortgage, I mentioned I was
00:15:26.409 --> 00:15:28.470
single. I was living in my parents' house until
00:15:28.470 --> 00:15:31.250
I was 26 to save up money to buy a home. And
00:15:31.250 --> 00:15:33.769
I got something called an accelerated mortgage
00:15:33.769 --> 00:15:36.149
payment, which allowed me to pay down my mortgage
00:15:36.149 --> 00:15:37.870
more quickly. So it took what was normally a
00:15:37.870 --> 00:15:40.110
25 -year mortgage and turned it into basically
00:15:40.110 --> 00:15:42.769
a 21 -year mortgage. Right. which cut down the
00:15:42.769 --> 00:15:44.730
total interest paid and everything that went
00:15:44.730 --> 00:15:47.809
into it. So those are really important things
00:15:47.809 --> 00:15:50.230
for people to consider, just affordability, how
00:15:50.230 --> 00:15:52.629
much interest you pay, and overall the big picture
00:15:52.629 --> 00:15:55.250
of the lifetime value you're creating. So, Vikram,
00:15:55.269 --> 00:15:57.330
you can maybe help us understand this better.
00:15:57.409 --> 00:15:59.169
And I think, Jesse, you touched on it. People
00:15:59.169 --> 00:16:01.509
don't realize that even if you're paying $100
00:16:01.509 --> 00:16:04.649
every month, that $100 is not going toward that
00:16:04.649 --> 00:16:07.629
$700 ,000 mortgage loan that you took. and especially
00:16:07.629 --> 00:16:10.070
not at the start. So when you're starting out,
00:16:10.169 --> 00:16:12.950
you may always pay $100, but the amount that
00:16:12.950 --> 00:16:15.009
goes towards your principal, which is the loan
00:16:15.009 --> 00:16:17.049
amount that you took, versus the interest is
00:16:17.049 --> 00:16:19.110
different, right? Very much so, yeah. I mean,
00:16:19.110 --> 00:16:21.929
based on current rates today, it's about 60 %
00:16:21.929 --> 00:16:25.429
to 65 % of your first payment on a 25 -year amortization
00:16:25.429 --> 00:16:26.850
will actually go towards the interest of the
00:16:26.850 --> 00:16:29.389
mortgage. Right, that's a huge chunk. Very big
00:16:29.389 --> 00:16:31.889
chunk of the money is just going towards paying
00:16:31.889 --> 00:16:34.889
the bank their interest spread. very little is
00:16:34.889 --> 00:16:36.610
actually getting applied to the principal pay
00:16:36.610 --> 00:16:38.049
down of your mortgage. That's why amortization
00:16:38.049 --> 00:16:40.889
is such an important factor. It's, you know,
00:16:40.909 --> 00:16:44.029
30 -year can be a good thing. You know, there
00:16:44.029 --> 00:16:46.230
was recently a bunch of news of like, do we go
00:16:46.230 --> 00:16:49.570
40? Do we go 50? There are other countries who
00:16:49.570 --> 00:16:52.230
go to 100 -year amortizations, which is, you
00:16:52.230 --> 00:16:54.269
know, you talk about a death, you know, a pledge.
00:16:55.169 --> 00:16:57.049
That's basically one, right? Well, at that point
00:16:57.049 --> 00:16:59.909
in time, isn't it better just to rent? I'm not
00:16:59.909 --> 00:17:02.490
living 100 years, I don't think. No, but I think...
00:17:03.039 --> 00:17:05.000
People look at it in just the opposite. It's
00:17:05.000 --> 00:17:07.579
like, I may never pay this thing off. So I might
00:17:07.579 --> 00:17:10.240
as well just basically pull this over a very,
00:17:10.259 --> 00:17:12.180
very long period of time. At least I'm slowly,
00:17:12.299 --> 00:17:14.480
even if it's just dollars at a time. Right. Of
00:17:14.480 --> 00:17:16.799
course, many, many, many months. The mental gymnastics.
00:17:17.200 --> 00:17:19.640
The mental gymnastics, you know, and there's
00:17:19.640 --> 00:17:21.480
obviously, you know, you have the ability at
00:17:21.480 --> 00:17:22.900
that point to like pass it down to your children,
00:17:22.980 --> 00:17:26.099
perhaps. Right. So people do, you know, just
00:17:26.099 --> 00:17:28.539
try to like weigh the pros and cons of rent versus
00:17:28.539 --> 00:17:31.140
buy. Look, I mean, we're in the business of helping
00:17:31.140 --> 00:17:33.500
people get mortgages to own homes. That said,
00:17:33.599 --> 00:17:35.920
renting is the right option for some people.
00:17:36.259 --> 00:17:38.759
There are certain circumstances where, based
00:17:38.759 --> 00:17:40.900
on property values, the price of rents in any
00:17:40.900 --> 00:17:43.799
given market, it's very market -driven. There
00:17:43.799 --> 00:17:46.500
are places where the price to rent is significantly
00:17:46.500 --> 00:17:48.759
cheaper than owning a home. It allows you to
00:17:48.759 --> 00:17:50.859
increase your savings rate and then maybe prepare
00:17:50.859 --> 00:17:53.920
for a home purchase later on. So I know we're
00:17:53.920 --> 00:17:56.099
not talking about rent versus buy, but I think
00:17:56.099 --> 00:17:57.900
it's an important thing to consider. It feels
00:17:57.900 --> 00:18:00.720
quite dystopian to pass down a mortgage. Like
00:18:00.720 --> 00:18:03.019
this is like to your kids and then your grandkids.
00:18:03.220 --> 00:18:05.839
I bestow this debt upon you. Yeah. It's crazy.
00:18:06.079 --> 00:18:08.339
It's your privilege to pay down the house you
00:18:08.339 --> 00:18:10.339
own. So speaking of rent versus own, I think
00:18:10.339 --> 00:18:11.839
another thing we talk about affordability is
00:18:11.839 --> 00:18:14.000
a lot of Canadians now worry about ever owning
00:18:14.000 --> 00:18:16.700
a home. Like it's gotten, you know, the average
00:18:16.700 --> 00:18:19.420
price of the home has come down, you know, compared
00:18:19.420 --> 00:18:21.640
to where it was five, 10 years ago, but it has
00:18:21.640 --> 00:18:24.720
increased at a rate that's not matched by income
00:18:24.720 --> 00:18:28.220
or wage increases. Do you think that now there's
00:18:28.220 --> 00:18:29.559
going to be a future where parents are going
00:18:29.559 --> 00:18:32.200
to end up being like the biggest mortgage providers
00:18:32.200 --> 00:18:34.960
in a way? Like, you know, how do you guys think
00:18:34.960 --> 00:18:37.759
about that? Yeah, there was a stat I think I
00:18:37.759 --> 00:18:40.700
saw last year. Almost one third of millennials
00:18:40.700 --> 00:18:43.480
and specifically Gen X it was focused on are
00:18:43.480 --> 00:18:44.920
getting help from their parents to buy their
00:18:44.920 --> 00:18:47.940
home. Right. Help with a down payment or co -signers.
00:18:48.339 --> 00:18:52.369
And boomers are. Starting to retire. Unfortunately,
00:18:52.450 --> 00:18:53.849
they're starting to pass away. And the largest
00:18:53.849 --> 00:18:55.809
wealth transfer in the history of time is about
00:18:55.809 --> 00:18:58.170
to happen. Now, is that going to help people
00:18:58.170 --> 00:19:00.670
buy homes? Potentially. But at the same time,
00:19:00.710 --> 00:19:02.470
that doesn't solve the issue of the housing market
00:19:02.470 --> 00:19:04.650
in general. And I mentioned this a little earlier.
00:19:04.769 --> 00:19:06.890
I think there's so much negative commentary in
00:19:06.890 --> 00:19:08.930
the media about people never being able to afford
00:19:08.930 --> 00:19:11.609
a home. And it's great shock value, right? Oh,
00:19:11.630 --> 00:19:13.089
you'll never be able to buy a home. It's a great
00:19:13.089 --> 00:19:15.289
headline. It's an amazing headline. And we hear
00:19:15.289 --> 00:19:16.529
it from people all the time. I thought I would
00:19:16.529 --> 00:19:19.730
never be able to afford this much. I think one
00:19:19.730 --> 00:19:21.289
of the important things for people to think about
00:19:21.289 --> 00:19:25.349
is maybe don't take that trip next year. Maybe
00:19:25.349 --> 00:19:27.190
don't buy that expensive thing. Buying a home
00:19:27.190 --> 00:19:28.690
is not just an off -the -shelf thing like it
00:19:28.690 --> 00:19:31.170
used to be. In our parents' generation, they
00:19:31.170 --> 00:19:33.269
would get married, they would buy a home, they'd
00:19:33.269 --> 00:19:35.789
get a dog, they'd have kids. It is more difficult
00:19:35.789 --> 00:19:38.109
now. But I think there are considerations people
00:19:38.109 --> 00:19:40.089
have to make from their own finances to say,
00:19:40.230 --> 00:19:42.509
okay, we're saving up for the down payment and
00:19:42.509 --> 00:19:44.130
we're determining what our affordability is so
00:19:44.130 --> 00:19:46.420
that we can get into the market. And you speak
00:19:46.420 --> 00:19:47.819
to someone to help you understand how you can
00:19:47.819 --> 00:19:49.500
increase your affordability. Maybe it is getting
00:19:49.500 --> 00:19:52.140
a cosigner. I personally think that there's going
00:19:52.140 --> 00:19:53.900
to be a major growth in reverse mortgages in
00:19:53.900 --> 00:19:56.279
Canada over the next 20 years because people
00:19:56.279 --> 00:19:58.519
are living longer. And a lot of people in their
00:19:58.519 --> 00:20:01.000
60s and 70s, they don't want to move out of their
00:20:01.000 --> 00:20:03.160
home. And they want to live in there for a long
00:20:03.160 --> 00:20:05.339
time. And the ability to leverage that home to
00:20:05.339 --> 00:20:07.180
help their children with a down payment or whatever
00:20:07.180 --> 00:20:09.380
that might be, we might see more of that. So
00:20:09.380 --> 00:20:12.960
I don't think the dream of homeownership is dead.
00:20:13.579 --> 00:20:16.619
I think it's changed. And I don't think everyone
00:20:16.619 --> 00:20:18.460
will be able to afford a home. To become his
00:20:18.460 --> 00:20:20.839
point, I think renting makes sense for some people.
00:20:22.160 --> 00:20:24.240
But there are ways for people to afford homes.
00:20:24.319 --> 00:20:26.400
And I think just getting themselves on the right
00:20:26.400 --> 00:20:27.980
financial path is what a lot of people have to
00:20:27.980 --> 00:20:30.119
figure out. So for people that are not in the
00:20:30.119 --> 00:20:33.740
know, what is a reverse mortgage? Okay, so it's
00:20:33.740 --> 00:20:36.099
an interesting thing. If you don't know anything
00:20:36.099 --> 00:20:37.460
about it and you just heard about it, you think
00:20:37.460 --> 00:20:39.599
the bank's stealing your home. But basically
00:20:39.599 --> 00:20:41.420
what a reverse mortgage is, it depends on the
00:20:41.420 --> 00:20:44.019
company, but if you're 55 or older, some of them
00:20:44.019 --> 00:20:47.019
are 65 or older, what the bank will do, or the
00:20:47.019 --> 00:20:50.000
lender in this situation, is they'll leverage
00:20:50.000 --> 00:20:53.799
your home as equity to pay down the mortgage
00:20:53.799 --> 00:20:55.220
they're lending you. So they'll give you up to
00:20:55.220 --> 00:20:57.660
50%, sometimes 60%, depending who you're working
00:20:57.660 --> 00:20:59.920
with. And equity is home value, right? So equity
00:20:59.920 --> 00:21:02.950
is just like what we think. Your home would sell
00:21:02.950 --> 00:21:05.509
for today less what you owe on the home. Exactly.
00:21:05.529 --> 00:21:07.650
That's equity. And we all know the stories of
00:21:07.650 --> 00:21:10.829
the family who moved from another country 40
00:21:10.829 --> 00:21:13.170
years ago and they bought a home for $150K and
00:21:13.170 --> 00:21:15.589
now it's worth $1 .5 million. And so they have
00:21:15.589 --> 00:21:18.430
$900 ,000, whatever, or maybe the entire amount
00:21:18.430 --> 00:21:20.950
if they paid it off is all equity. Exactly. And
00:21:20.950 --> 00:21:22.410
that's the nest egg. And they don't want to miss
00:21:22.410 --> 00:21:24.049
out on that. They want to live there forever.
00:21:24.529 --> 00:21:26.750
And what these reverse mortgage companies allow
00:21:26.750 --> 00:21:30.259
for is to access. up to, let's call it 50 % of
00:21:30.259 --> 00:21:32.220
that home. So $1 .5 million home, you're talking
00:21:32.220 --> 00:21:35.720
about $750 ,000 of home value or equity that
00:21:35.720 --> 00:21:38.059
that person could then borrow. And they're not
00:21:38.059 --> 00:21:39.859
making monthly payments. They could be fully
00:21:39.859 --> 00:21:42.240
retired without a job in this situation. The
00:21:42.240 --> 00:21:45.019
asset is the home. And there is a big fear of
00:21:45.019 --> 00:21:46.480
saying, okay, well, the bank's going to take
00:21:46.480 --> 00:21:48.579
my home at the end of this. But the reason we're
00:21:48.579 --> 00:21:51.299
seeing a rise in popularity of it is people could
00:21:51.299 --> 00:21:54.259
use that to help their kids to go on those vacations
00:21:54.259 --> 00:21:56.819
they've always wanted to do and overall better
00:21:56.819 --> 00:21:59.859
support. their last 20, 30 years of their life
00:21:59.859 --> 00:22:01.619
by leveraging that home asset without having
00:22:01.619 --> 00:22:03.220
that monthly payment that goes out there. So
00:22:03.220 --> 00:22:05.599
without getting too deep into what the reverse
00:22:05.599 --> 00:22:08.819
mortgage is, we've seen growth in the US. They
00:22:08.819 --> 00:22:11.500
do have Tom Selleck in their ads there. So who's
00:22:11.500 --> 00:22:12.980
not going to buy something from Tom Selleck?
00:22:13.539 --> 00:22:16.099
And it's growing in the UK as well. And Canada
00:22:16.099 --> 00:22:18.779
is going to come along that way. There's companies
00:22:18.779 --> 00:22:20.859
like Bloom who've done a great job in Canada,
00:22:20.960 --> 00:22:22.640
starting to grow that world, Home Equity Bank,
00:22:22.839 --> 00:22:25.579
Equitable Bank. So it is an interesting category
00:22:25.579 --> 00:22:28.279
to look out for. If I could, too, I think one
00:22:28.279 --> 00:22:31.440
thing that is probably just an often misconception,
00:22:32.079 --> 00:22:34.220
the big fear, is that you're bankrupting your
00:22:34.220 --> 00:22:35.920
children or leaving them with a significant debt.
00:22:36.119 --> 00:22:38.680
Totally. You talked about it. The most that you
00:22:38.680 --> 00:22:40.420
can often borrow in these reverse mortgages is
00:22:40.420 --> 00:22:44.259
50 % of the home's value. So to use your scenario,
00:22:44.380 --> 00:22:46.819
if it's a $1 .5 million home and you're doing
00:22:46.819 --> 00:22:50.559
a $750 ,000 mortgage, it maxes out at that point.
00:22:50.599 --> 00:22:54.079
You still get $750 ,000 in equity that theoretically
00:22:54.079 --> 00:22:55.880
would get passed down as part of the estate.
00:22:56.599 --> 00:23:01.140
So if it's allowing the adult, the elder adult
00:23:01.140 --> 00:23:03.759
to live in that home and live a great life and
00:23:03.759 --> 00:23:07.339
they benefited from the greatest equity home
00:23:07.339 --> 00:23:10.740
gains in history and now they have the ability
00:23:10.740 --> 00:23:12.960
to sort of like leverage that and help them with
00:23:12.960 --> 00:23:15.579
their cash flow needs in a world that just keeps
00:23:15.579 --> 00:23:17.940
getting more and more and more expensive, then
00:23:17.940 --> 00:23:20.319
it does make sense for some people. I agree.
00:23:20.440 --> 00:23:24.579
So mortgages now are not just for new. to home
00:23:24.579 --> 00:23:26.640
buying. They're also for people that have lived
00:23:26.640 --> 00:23:28.500
in their homes forever. So there's always a time
00:23:28.500 --> 00:23:29.880
to get a mortgage. It doesn't matter if you're
00:23:29.880 --> 00:23:34.559
16, I guess 16 to be young, 19 or 65 or 90, I
00:23:34.559 --> 00:23:36.980
guess in that case. How do you guys think about,
00:23:37.019 --> 00:23:38.480
we talked to this about, you know, rent versus
00:23:38.480 --> 00:23:40.920
own affordability. How do you make sense? At
00:23:40.920 --> 00:23:43.819
the end of the day, oftentimes there's two things
00:23:43.819 --> 00:23:45.420
that I've heard. And, you know, when I got my
00:23:45.420 --> 00:23:47.759
mortgage, they're like, well, a mortgage sometimes
00:23:47.759 --> 00:23:50.519
is a place where you live. So you shouldn't oftentimes
00:23:50.519 --> 00:23:53.440
see it as an investment. So oftentimes when you
00:23:53.440 --> 00:23:55.119
make these rent versus buy, you're like, well,
00:23:55.220 --> 00:23:58.259
should I save this money and put it in a down
00:23:58.259 --> 00:24:00.500
payment and buy a home? Or should I just invest
00:24:00.500 --> 00:24:03.299
it in the stock market and ride that curve? How
00:24:03.299 --> 00:24:07.039
do you guys think about that? For me, I'll say
00:24:07.039 --> 00:24:09.220
that I think one of the things that people mistake
00:24:09.220 --> 00:24:11.079
too often is that thinking that their home is
00:24:11.079 --> 00:24:12.859
some investment that's going to just continually
00:24:12.859 --> 00:24:16.299
rise in value. And I think it's a condition of
00:24:16.299 --> 00:24:18.039
basically what's happened over the last, you
00:24:18.039 --> 00:24:20.240
know, let's call it 15 years -ish, where homes
00:24:20.240 --> 00:24:22.329
just kept going up. Yeah. So quickly. And the
00:24:22.329 --> 00:24:23.750
people just assume it goes in one direction.
00:24:23.930 --> 00:24:25.569
Yeah. I mean, we started getting to a place where
00:24:25.569 --> 00:24:27.069
home values were rising 20 percent year over
00:24:27.069 --> 00:24:29.049
year and started to believe that that was going
00:24:29.049 --> 00:24:30.829
to happen in perpetuity, not doing the math,
00:24:30.970 --> 00:24:32.710
you know, 10, 15 years from now of what the long
00:24:32.710 --> 00:24:35.069
term implications of that would be. I don't look
00:24:35.069 --> 00:24:36.930
at it that way. When I think about the home,
00:24:37.029 --> 00:24:38.609
I mean, at the end of the day, like if your home
00:24:38.609 --> 00:24:41.250
is going up significantly in value, it's based
00:24:41.250 --> 00:24:43.630
on what the other homes around you are doing
00:24:43.630 --> 00:24:45.470
in their values as well. Now, these things are
00:24:45.470 --> 00:24:47.829
hyperlocal, but if your home is significantly
00:24:47.829 --> 00:24:50.849
rising in value. and so are all the other homes
00:24:50.849 --> 00:24:52.869
around you, you're not actually accumulating
00:24:52.869 --> 00:24:55.250
much of an asset that way because if you were
00:24:55.250 --> 00:24:56.950
to sell that home, you need to go move somewhere
00:24:56.950 --> 00:24:59.029
else to go buy a new home. It's not saying that
00:24:59.029 --> 00:25:01.750
it's not advantageous. There's a reason why the
00:25:01.750 --> 00:25:04.109
elder boomers are really protecting their home
00:25:04.109 --> 00:25:06.210
equity and they wanna make sure that they're
00:25:06.210 --> 00:25:08.349
doing things that don't allow home prices to
00:25:08.349 --> 00:25:10.750
go down. Otherwise, the simple solution would
00:25:10.750 --> 00:25:12.269
be like, let's just bring the price of homes
00:25:12.269 --> 00:25:14.769
down significantly everywhere and let's let a
00:25:14.769 --> 00:25:16.730
whole new generation into their homes. You have
00:25:16.730 --> 00:25:18.470
competing factors. You have young people who
00:25:18.470 --> 00:25:20.599
want homes. to go cheaper. So they're sort of
00:25:20.599 --> 00:25:23.319
like, you know, rah, rah, rah, every time home
00:25:23.319 --> 00:25:25.119
prices go up. Just open up Reddit. Yeah, exactly.
00:25:26.200 --> 00:25:28.480
They're rooting for the downfall of home values
00:25:28.480 --> 00:25:31.640
because if you're not in the game, then you want
00:25:31.640 --> 00:25:32.980
them to come down. But if you're in the game,
00:25:33.019 --> 00:25:34.720
then you want them to go nowhere but up. I use
00:25:34.720 --> 00:25:36.640
this analogy of a golf club, right? So before
00:25:36.640 --> 00:25:38.650
you join... A golf club, you complain about the
00:25:38.650 --> 00:25:40.230
price of the initiation and the monthly dues.
00:25:40.450 --> 00:25:42.049
And as soon as you're in the golf club, you wish
00:25:42.049 --> 00:25:43.450
the initiation and the monthly dues were higher.
00:25:43.849 --> 00:25:47.609
So you want to be grandfathered in. Yeah. Once
00:25:47.609 --> 00:25:49.809
you're there, you're just like, I want my tee
00:25:49.809 --> 00:25:51.329
times. I want to live the life that I want to
00:25:51.329 --> 00:25:52.710
live and I don't want to let anybody else play
00:25:52.710 --> 00:25:56.589
the game. And it makes sense. But I think for
00:25:56.589 --> 00:26:01.410
society, we need to maintain some level of healthy
00:26:01.410 --> 00:26:04.670
balance. always go up they do go up they do go
00:26:04.670 --> 00:26:06.730
down they do act like the stock market doesn't
00:26:06.730 --> 00:26:08.990
always mirror that but you know there are periods
00:26:08.990 --> 00:26:11.130
sometimes where homes might not go up in value
00:26:11.130 --> 00:26:14.150
for for eight ten years you may be in one of
00:26:14.150 --> 00:26:15.970
those right now we've actually seen home prices
00:26:15.970 --> 00:26:19.950
come down across much of canada significant numbers
00:26:19.950 --> 00:26:22.309
showing across the gta right now in the downturn
00:26:22.309 --> 00:26:25.390
um and that may continue for a little while and
00:26:25.390 --> 00:26:26.670
you know for the people who have owned their
00:26:26.670 --> 00:26:28.789
house for a little while and their home is doubled
00:26:28.789 --> 00:26:30.390
in price they're like yeah whatever i'm fine
00:26:30.839 --> 00:26:33.740
So for somebody who bought in 2022, who's seen
00:26:33.740 --> 00:26:35.640
their value come down, maybe you put 5 % down,
00:26:35.740 --> 00:26:38.920
4 % got rolled into the mortgage for the CMHC
00:26:38.920 --> 00:26:41.460
fee. So you finance 99 % of the home's value
00:26:41.460 --> 00:26:44.279
and now your home has gone down 30 % from the
00:26:44.279 --> 00:26:47.660
peak. So technically you owe roughly 30 % more
00:26:47.660 --> 00:26:49.119
on your mortgage than what your home is worth.
00:26:49.200 --> 00:26:51.279
You're terrified. Those are the people who should
00:26:51.279 --> 00:26:53.460
be, you know, having conversations to understand
00:26:53.460 --> 00:26:55.519
what their options are. But again, as long as
00:26:55.519 --> 00:26:58.660
you can make your monthly payment. You're fine.
00:26:58.920 --> 00:27:00.799
You're not defaulting. You're in a good spot.
00:27:01.119 --> 00:27:03.200
You need to think of homeownership as a very
00:27:03.200 --> 00:27:06.839
long game, as a life decision, not an asset play
00:27:06.839 --> 00:27:09.039
that is going to make you rich. I think that's
00:27:09.039 --> 00:27:10.559
kind of critical, right? If you're thinking about
00:27:10.559 --> 00:27:12.480
that terrible, terrifying scenario, which a lot
00:27:12.480 --> 00:27:14.000
of people have gone through, where the value
00:27:14.000 --> 00:27:16.119
of their home is less than what they owe. And
00:27:16.119 --> 00:27:18.440
I think to your point, if you live in that home
00:27:18.440 --> 00:27:20.559
for another 40 years, 30 years, whatever that
00:27:20.559 --> 00:27:24.109
number is. that value will come back. It will
00:27:24.109 --> 00:27:27.170
just take a long time. So it's not like the stock
00:27:27.170 --> 00:27:29.049
market. You don't just get in, get out. It's
00:27:29.049 --> 00:27:31.509
not liquid. You can want to sell your home, but
00:27:31.509 --> 00:27:33.670
nobody wants to buy it. You're stuck holding
00:27:33.670 --> 00:27:35.970
the home, but also it's a place for you to live.
00:27:36.069 --> 00:27:38.269
I think that's another nuance that people forget.
00:27:38.329 --> 00:27:41.259
You're going to live somewhere. I mean, whatever,
00:27:41.839 --> 00:27:43.480
under a rock and a tree, whatever, you're going
00:27:43.480 --> 00:27:46.000
to own that tree. And that tree may not always
00:27:46.000 --> 00:27:48.019
be appealing to the next person, right? Like
00:27:48.019 --> 00:27:49.960
you said, it's hyperlocal. The value of a home,
00:27:49.980 --> 00:27:52.759
unlike a stock, you know, is completely decided
00:27:52.759 --> 00:27:55.220
by how much someone else is willing to pay for
00:27:55.220 --> 00:27:57.299
it and not how much you think it's worth. So
00:27:57.299 --> 00:27:59.799
I think a lot of times, to your point, people
00:27:59.799 --> 00:28:02.059
have only seen house prices go one way and they're
00:28:02.059 --> 00:28:03.400
like, well, that's it. I'm going to do the math.
00:28:03.480 --> 00:28:04.839
It's going to go that way. That's how much it's
00:28:04.839 --> 00:28:06.359
worth. But there's nobody in the market that
00:28:06.359 --> 00:28:09.039
wants to buy for that, which is tough. So let's
00:28:09.039 --> 00:28:11.160
think about, well, this is kind of terrifying
00:28:11.160 --> 00:28:14.559
and depressing. If you go back to another terrifying
00:28:14.559 --> 00:28:17.119
and depressing time to be a homeowner, 2020 to
00:28:17.119 --> 00:28:20.839
2024, where interest rates were only going in
00:28:20.839 --> 00:28:23.900
one direction. And oftentimes when you're told,
00:28:24.000 --> 00:28:26.359
hey, this is the fixed rate rate and this is
00:28:26.359 --> 00:28:28.240
the variable rate. And as an average person,
00:28:28.279 --> 00:28:29.480
you're like, I don't understand. I'm going to
00:28:29.480 --> 00:28:32.460
pick whatever is cheaper. That is where everybody's
00:28:32.460 --> 00:28:34.579
mind goes because you don't know and you don't
00:28:34.579 --> 00:28:36.559
have, you know, as you're not an economist, you're
00:28:36.559 --> 00:28:38.259
not the industry, you don't have the details
00:28:38.259 --> 00:28:40.920
to look 10 years in the future. How should somebody
00:28:40.920 --> 00:28:42.779
think about that today? Knowing what's happened,
00:28:42.920 --> 00:28:44.859
knowing that houses don't always go in one direction,
00:28:44.940 --> 00:28:47.319
you talk about cash flow. People probably don't
00:28:47.319 --> 00:28:49.319
even realize that picking fixed versus variable
00:28:49.319 --> 00:28:53.000
has a huge impact on your cash flow. Yeah, it's.
00:28:53.420 --> 00:28:56.000
It was scary because generally about 20 to 25
00:28:56.000 --> 00:28:57.740
% of people choose a variable rate mortgage.
00:28:58.000 --> 00:28:59.740
And a lot of those are people who are buying
00:28:59.740 --> 00:29:02.640
their second home, investors, people who understand
00:29:02.640 --> 00:29:05.559
the market a little bit better. I think the stat
00:29:05.559 --> 00:29:08.180
was 63 % of people were doing it at the bottom
00:29:08.180 --> 00:29:11.119
of the rate market. And those are people taking
00:29:11.119 --> 00:29:13.359
risks. And a time that you should never be selfish
00:29:13.359 --> 00:29:15.420
is when it comes to choosing your mortgage rate.
00:29:15.700 --> 00:29:17.660
Yes, you try to shop for the lowest rate, but
00:29:17.660 --> 00:29:19.640
saying, you know what, this variable rate is
00:29:19.640 --> 00:29:23.339
30 bps lower. or 0 .3 % lower than the fixed
00:29:23.339 --> 00:29:25.559
rate, I'm going to let this ride because the
00:29:25.559 --> 00:29:27.099
Bank of Canada said rates are going to be low
00:29:27.099 --> 00:29:29.640
for a while. At the end of the day, it comes
00:29:29.640 --> 00:29:31.400
down to your risk tolerance. I've never done
00:29:31.400 --> 00:29:33.200
anything but a fixed rate. And people always
00:29:33.200 --> 00:29:35.180
say, Jesse, you're a mortgage guy. Why are you
00:29:35.180 --> 00:29:37.099
not doing variable rate? For the last 30 years,
00:29:37.140 --> 00:29:39.359
variable rates have been lower. But my message
00:29:39.359 --> 00:29:41.759
is always, are you comfortable with the fixed
00:29:41.759 --> 00:29:44.500
rate? Can you make your monthly payments? Do
00:29:44.500 --> 00:29:46.660
you feel like you've done a good job with it?
00:29:46.920 --> 00:29:49.220
It's been great. If you want to take a variable
00:29:49.220 --> 00:29:51.279
rate, you're inevitably taking the risk that
00:29:51.279 --> 00:29:53.000
comes with it. Now, here's the nice things about
00:29:53.000 --> 00:29:55.160
a variable rate mortgage. You could switch it
00:29:55.160 --> 00:29:57.619
into a fixed rate at any time during that term.
00:29:57.720 --> 00:29:59.859
A lot of people don't realize that. So there
00:29:59.859 --> 00:30:01.299
were people who were stuck with variable rate
00:30:01.299 --> 00:30:03.480
mortgages and those rates kept going up and going
00:30:03.480 --> 00:30:05.079
up and going up. They could have switched into
00:30:05.079 --> 00:30:07.160
a fixed rate after the first Bank of Canada rate
00:30:07.160 --> 00:30:10.259
announcement. But a lot of people, again, they
00:30:10.259 --> 00:30:11.880
get selfish sometimes when it comes to rate.
00:30:12.019 --> 00:30:13.559
And Bekem mentioned this earlier that people
00:30:13.559 --> 00:30:15.299
focus only on rate when it comes to mortgage.
00:30:15.420 --> 00:30:17.460
They don't think of everything else. Well, they
00:30:17.460 --> 00:30:18.680
should have thought about potentially switching
00:30:18.680 --> 00:30:21.740
to a fix at that point. But the other side of
00:30:21.740 --> 00:30:25.460
it is that variable rate mortgages, you could
00:30:25.460 --> 00:30:28.180
also break them and the penalty is a lot lower.
00:30:28.279 --> 00:30:30.519
It's generally three months interest versus three
00:30:30.519 --> 00:30:32.680
months or IRD. And I'm sure we'll talk more about
00:30:32.680 --> 00:30:35.359
that later. But there's benefits to variables.
00:30:35.480 --> 00:30:37.359
So when you're going to make that decision, it's
00:30:37.359 --> 00:30:38.819
really important you're speaking to the person
00:30:38.819 --> 00:30:41.700
you're working with to say, help me understand
00:30:41.700 --> 00:30:43.980
where fixed rates are. what the difference is
00:30:43.980 --> 00:30:45.700
between fixed and variable. What's the difference
00:30:45.700 --> 00:30:47.299
in my total interest going to be over the next
00:30:47.299 --> 00:30:49.880
five years? How much more principal or mortgage
00:30:49.880 --> 00:30:51.880
is being paid down over that five years or three
00:30:51.880 --> 00:30:54.039
years, however long your mortgage term is? And
00:30:54.039 --> 00:30:56.039
then what's the potential risk that I'm running
00:30:56.039 --> 00:30:57.940
myself into if I'm staying in fixed? Because
00:30:57.940 --> 00:31:01.880
I'll give you an example. I'm sure you have the
00:31:01.880 --> 00:31:03.180
same thing. We have friends who always reach
00:31:03.180 --> 00:31:04.900
out because we're the mortgage people that people
00:31:04.900 --> 00:31:06.640
always want advice from. And he said, should
00:31:06.640 --> 00:31:08.680
I do fixed or variable? And I said, well, how
00:31:08.680 --> 00:31:10.279
long do you expect to be at this home? He goes,
00:31:10.339 --> 00:31:11.559
well, we're probably going to be here about one
00:31:11.559 --> 00:31:14.519
to two more years. I honestly, if I was in your
00:31:14.519 --> 00:31:17.140
situation, I would choose a two -year fixed or
00:31:17.140 --> 00:31:19.859
a variable. And the reason I would choose a variable
00:31:19.859 --> 00:31:22.559
is rates could go up in the next two years. It's
00:31:22.559 --> 00:31:24.920
possible. But the penalty to break the mortgage
00:31:24.920 --> 00:31:27.339
will be much lower. And they're not someone who
00:31:27.339 --> 00:31:28.960
was looking to buy another home. They were looking
00:31:28.960 --> 00:31:32.500
to move to another country. So it really depends
00:31:32.500 --> 00:31:34.480
on your situation. And that's why getting a holistic
00:31:34.480 --> 00:31:37.240
view on what the right decision is. And the most
00:31:37.240 --> 00:31:40.240
basic though, risk tolerance. is what's the most
00:31:40.240 --> 00:31:41.940
important thing. If you don't like risk and you're
00:31:41.940 --> 00:31:43.920
comfortable with your rate, choose fixed. If
00:31:43.920 --> 00:31:46.180
you're more into the risk and you want to let
00:31:46.180 --> 00:31:48.079
it ride a little bit more and you have an idea
00:31:48.079 --> 00:31:49.980
of the macroeconomic factors that will lead to
00:31:49.980 --> 00:31:53.700
the variable rate mortgage changes. If you want
00:31:53.700 --> 00:31:55.579
peace of mind, anyone to sleep at night, you
00:31:55.579 --> 00:31:58.019
pick one versus the other. Totally. Is that kind
00:31:58.019 --> 00:31:59.859
of fair? Though I did have someone tell me that
00:31:59.859 --> 00:32:01.920
it doesn't matter which you pick. Over time,
00:32:02.119 --> 00:32:04.440
if you're a homeowner long enough, it all averages
00:32:04.440 --> 00:32:06.819
out. I don't know how true that is. It's true.
00:32:09.039 --> 00:32:12.539
Sorry to Jesse, but if it does average out that
00:32:12.539 --> 00:32:14.940
the variable ends up paying less interest over
00:32:14.940 --> 00:32:17.779
time. Totally. You know, I often will refer to
00:32:17.779 --> 00:32:20.039
it as a comfort premium, right? So, but like
00:32:20.039 --> 00:32:22.200
that doesn't make it the right or wrong decision
00:32:22.200 --> 00:32:24.940
for any one person. The truth is, it is highly
00:32:24.940 --> 00:32:27.660
unique to that individual situation. The risk
00:32:27.660 --> 00:32:29.180
tolerance, whether or not they could sleep at
00:32:29.180 --> 00:32:30.579
night with a variable mortgage. And there are
00:32:30.579 --> 00:32:32.299
other, there are different types of variable
00:32:32.299 --> 00:32:34.559
mortgage. Like there's a variable mortgage, there's
00:32:34.559 --> 00:32:36.220
an adjustable mortgage. Oftentimes people don't
00:32:36.220 --> 00:32:37.960
realize they're two different things. In one
00:32:37.960 --> 00:32:40.799
situation, the payment actually will remain the
00:32:40.799 --> 00:32:42.279
same. They call it a static payment variable.
00:32:42.579 --> 00:32:44.440
The payment will remain the same, but as the
00:32:44.440 --> 00:32:46.339
interest rate changes, the only thing that changes
00:32:46.339 --> 00:32:48.380
is how much you're applying to principal on a
00:32:48.380 --> 00:32:50.940
monthly basis. There are true adjustable rate
00:32:50.940 --> 00:32:53.500
mortgages in which your payment will actually
00:32:53.500 --> 00:32:56.059
be reflective of the interest rate. So your payment
00:32:56.059 --> 00:32:58.480
will go up or down. And that's a conversation
00:32:58.480 --> 00:33:00.079
to have with folks as well. It's like, would
00:33:00.079 --> 00:33:02.079
you be comfortable paying a little less interest
00:33:02.079 --> 00:33:04.640
on your mortgage or a little less principal on
00:33:04.640 --> 00:33:07.819
your mortgage if rates were to go down? or rates
00:33:07.819 --> 00:33:10.259
were to go up or, you know, like as that swings,
00:33:10.400 --> 00:33:13.859
like just seeing that variation happen in your
00:33:13.859 --> 00:33:16.980
mortgage payment between interest and principal,
00:33:17.079 --> 00:33:18.920
but not the actual dollar amount coming out of
00:33:18.920 --> 00:33:20.400
your pocket, would you be comfortable with that?
00:33:21.039 --> 00:33:24.039
Then would you be comfortable in a truly adjustable
00:33:24.039 --> 00:33:26.160
situation where, you know, if rates go up by,
00:33:26.200 --> 00:33:28.859
let's call it 1 % because the Bank of Canada
00:33:28.859 --> 00:33:31.160
is adjusting their rates, you know, and that
00:33:31.160 --> 00:33:34.380
might be $300 on your monthly payment. The answer
00:33:34.380 --> 00:33:36.220
is... No to that, then you need to have that
00:33:36.220 --> 00:33:38.160
conversation as well. So there are even different
00:33:38.160 --> 00:33:41.700
types of variable payment mortgages that people
00:33:41.700 --> 00:33:44.059
need to consider. I myself am a variable guy.
00:33:44.980 --> 00:33:47.519
If I were to guess, I bet probably more, like
00:33:47.519 --> 00:33:52.940
you said, 25 % of people will accept a variable
00:33:52.940 --> 00:33:57.059
rate. Probably closer to 75 % of mortgage people
00:33:57.059 --> 00:33:59.829
will do a variable rate. Totally. I'm the only
00:33:59.829 --> 00:34:01.809
one on my team. The only one who chose fixed.
00:34:01.890 --> 00:34:04.309
And that's because I'm neurotic. That's the only
00:34:04.309 --> 00:34:06.789
reason why. My co -founders, all variable, everyone.
00:34:06.910 --> 00:34:08.849
It feels so complicated. It feels like I need
00:34:08.849 --> 00:34:11.309
to take like a BuzzFeed quiz on like which mortgage
00:34:11.309 --> 00:34:14.570
princess I am, right? Like it feels like there's
00:34:14.570 --> 00:34:17.550
so many. You're the credit union, fixed rate,
00:34:17.789 --> 00:34:22.110
five -year term. As we unpack it and the average
00:34:22.110 --> 00:34:24.090
person is going into this being like, I don't
00:34:24.090 --> 00:34:26.670
even know. Is it fair to say, look, There's two
00:34:26.670 --> 00:34:28.809
things you should probably care about. How much
00:34:28.809 --> 00:34:31.750
you have in your budget to pay on a monthly basis.
00:34:32.010 --> 00:34:34.489
Like what is your cash outflow that you can afford?
00:34:35.070 --> 00:34:36.750
Obviously, what kind of house you want is important.
00:34:37.369 --> 00:34:39.630
But that will determine how much monthly you
00:34:39.630 --> 00:34:42.110
can make versus and how much down you have really
00:34:42.110 --> 00:34:44.230
determines what you can afford. And then you
00:34:44.230 --> 00:34:45.710
can kind of play around a little bit and you
00:34:45.710 --> 00:34:48.190
can make an educated guess on, hey, maybe I do
00:34:48.190 --> 00:34:50.110
fixed. Maybe I do variable. Maybe I do static.
00:34:50.369 --> 00:34:52.530
Maybe there's all these other choices. But the
00:34:52.530 --> 00:34:55.380
main thing is. To help you understand how big
00:34:55.380 --> 00:34:57.179
of a home you can afford is, how much can you
00:34:57.179 --> 00:34:59.719
pay on a monthly basis? Is that fair? Cash is
00:34:59.719 --> 00:35:01.780
king. You don't want to be house poor. There's
00:35:01.780 --> 00:35:03.739
so many people that max out their affordability,
00:35:03.760 --> 00:35:05.519
make all the bad decisions when they buy their
00:35:05.519 --> 00:35:07.219
first home because they're excited about it.
00:35:07.719 --> 00:35:09.980
And they end up being house poor. And you don't
00:35:09.980 --> 00:35:11.699
want to find yourself into that situation. Because
00:35:11.699 --> 00:35:13.880
it's not just the mortgage, too. When you buy
00:35:13.880 --> 00:35:16.559
a house, it doesn't end there. You're going to
00:35:16.559 --> 00:35:19.780
be at Ikea for a while. That's for sure. Because
00:35:19.780 --> 00:35:23.480
there's taxes, property taxes. There's land transfer.
00:35:23.519 --> 00:35:25.320
If you're buying a house in Toronto, you pay
00:35:25.320 --> 00:35:28.019
the city land transfer. And I'll say many people
00:35:28.019 --> 00:35:29.719
don't know about land transfer taxes. Right.
00:35:29.739 --> 00:35:32.079
It's a rude surprise. It's a really scary surprise
00:35:32.079 --> 00:35:34.920
for so many people. And it could be $10 ,000,
00:35:34.920 --> 00:35:36.880
$20 ,000, $30 ,000, $40 ,000 that you're adding
00:35:36.880 --> 00:35:39.480
to your down payment, basically. It's like, what,
00:35:39.519 --> 00:35:42.039
5 % if you're buying a house in Toronto. Total
00:35:42.039 --> 00:35:45.059
land transfer tax, I think, is 5%. of your home
00:35:45.059 --> 00:35:47.719
value, not just like the loan that you took of
00:35:47.719 --> 00:35:51.059
the entire property, which is huge. Substantial.
00:35:51.119 --> 00:35:52.559
You have a lot of substantial. That's so cheap.
00:35:52.579 --> 00:35:54.960
5 % down payment. You need 5 % more just to pay
00:35:54.960 --> 00:35:56.800
the taxes. And I'll be brutal honest here. My
00:35:56.800 --> 00:35:58.940
first home purchase, I came from being, my background
00:35:58.940 --> 00:36:01.760
was marketing, right? I was in customer acquisition
00:36:01.760 --> 00:36:04.539
and data. I didn't know about land transfer taxes.
00:36:04.980 --> 00:36:07.539
My realtor never told me. My mortgage broker
00:36:07.539 --> 00:36:09.369
never told me. The lawyer didn't tell you? My
00:36:09.369 --> 00:36:11.130
real estate lawyer told me, he's like, do you
00:36:11.130 --> 00:36:12.809
have your land transfer tax ready? Right the
00:36:12.809 --> 00:36:14.630
day it was due. And I was like, wait a second.
00:36:15.130 --> 00:36:17.769
What is, what are you talking about? And it was,
00:36:17.789 --> 00:36:19.530
it was a bit of a scary experience, right? And
00:36:19.530 --> 00:36:21.389
I can't imagine that doesn't happen to quite
00:36:21.389 --> 00:36:24.190
a few people who make the right bad decision
00:36:24.190 --> 00:36:26.710
of not understanding the full big picture. And
00:36:26.710 --> 00:36:29.969
you mentioned it like my second mortgage, obviously
00:36:29.969 --> 00:36:31.750
much more knowledgeable. I had a whole Excel
00:36:31.750 --> 00:36:33.789
document with all of my costs, my life insurance
00:36:33.789 --> 00:36:35.670
costs, all these things. How much could I afford
00:36:35.670 --> 00:36:38.420
on a monthly basis? And that's an important thing
00:36:38.420 --> 00:36:39.780
for people to figure out. In the world now of
00:36:39.780 --> 00:36:42.039
Gemini, Chachapiti, Claude, whatever you're using,
00:36:42.179 --> 00:36:45.659
it's so easy to build a plan to understand what
00:36:45.659 --> 00:36:47.619
you could afford, what your expected salary increases
00:36:47.619 --> 00:36:50.980
are, all these different things to build a financial
00:36:50.980 --> 00:36:52.639
plan that makes sense for you when you are going
00:36:52.639 --> 00:36:54.460
to buy your home to make sure, yes, you could
00:36:54.460 --> 00:36:57.159
afford a $900 ,000 home purchase, but should
00:36:57.159 --> 00:36:59.909
you buy a $900 ,000 home? Those are things that
00:36:59.909 --> 00:37:01.309
people really have to consider. Do you think
00:37:01.309 --> 00:37:03.829
if I asked Chad TPT, should I buy a $900 ,000
00:37:03.829 --> 00:37:05.429
home? It's just going to say, that's a great
00:37:05.429 --> 00:37:07.949
idea. You're the best. We love you, Monisha.
00:37:08.250 --> 00:37:10.849
A hundred percent. It'll tell you everything
00:37:10.849 --> 00:37:12.429
you're saying is correct. So that's why I say
00:37:12.429 --> 00:37:14.750
use Gemini. You're the only person in the world
00:37:14.750 --> 00:37:17.530
that's thought of this. I think what's funny
00:37:17.530 --> 00:37:19.710
too is we're all realizing that our little agents
00:37:19.710 --> 00:37:22.170
now, like they actually cater to us and our individual
00:37:22.170 --> 00:37:24.289
needs, right? So if we asked it, we'd probably
00:37:24.289 --> 00:37:26.190
get three different answers. Sure, sure. But
00:37:26.190 --> 00:37:27.710
all of them would tell us how amazing we were.
00:37:28.119 --> 00:37:30.179
That's for sure. That's for now, at least. Until,
00:37:30.199 --> 00:37:31.900
you know, there's a switch that gets flipped
00:37:31.900 --> 00:37:32.960
off and it's like, you don't know what you're
00:37:32.960 --> 00:37:36.960
doing. Totally. Totally. The other thing I think
00:37:36.960 --> 00:37:38.639
we talked a little bit about is home insurance,
00:37:38.960 --> 00:37:40.760
which, again, people don't know a lot about.
00:37:40.820 --> 00:37:44.460
That's another cost. Any tips, insights, tricks?
00:37:44.599 --> 00:37:46.280
Like, how do I think about home insurance? When
00:37:46.280 --> 00:37:49.300
is the right way to go about it? Is it another
00:37:49.300 --> 00:37:51.159
thing I need to shop around for? Like, I already
00:37:51.159 --> 00:37:53.480
first shop around for the house. Then I shop
00:37:53.480 --> 00:37:55.880
around for the mortgage. Now I have to shop around
00:37:55.880 --> 00:37:59.889
for this home insurance. Is that fair? Yeah,
00:37:59.889 --> 00:38:03.050
pretty much. One of the joys of homeownership,
00:38:03.050 --> 00:38:04.750
right? It just keeps coming at you. I think that's
00:38:04.750 --> 00:38:07.389
the big difference too, between like asking yourself
00:38:07.389 --> 00:38:09.210
the question, do you want to own a home or do
00:38:09.210 --> 00:38:12.440
you want to rent? And homeownership. comes with
00:38:12.440 --> 00:38:16.460
a lot of responsibilities. It is very adulting.
00:38:16.539 --> 00:38:18.099
We often talk about all the great things that
00:38:18.099 --> 00:38:19.679
come as a result of homeownership, but there
00:38:19.679 --> 00:38:21.239
are all the other things that you need to take
00:38:21.239 --> 00:38:23.039
into consideration. There are things that you
00:38:23.039 --> 00:38:25.119
will not like as part of being a homeowner. There
00:38:25.119 --> 00:38:26.880
are things that you do like, right? Like I like
00:38:26.880 --> 00:38:28.960
that when I, you know, every year decide on a
00:38:28.960 --> 00:38:31.360
project or two, I'm doing a project or two on
00:38:31.360 --> 00:38:34.320
the home that I own. That said, every time I
00:38:34.320 --> 00:38:37.239
finish that project or two, I say, now I'm done.
00:38:37.719 --> 00:38:40.659
Never again. Never again. Next year, I will be
00:38:40.659 --> 00:38:42.539
saving 100 % of my money and putting nothing
00:38:42.539 --> 00:38:44.219
back into the house. And then, you know, we get
00:38:44.219 --> 00:38:46.400
out of the winter blitz and I'm like, okay, I'm
00:38:46.400 --> 00:38:47.739
going to start doing some things outside again,
00:38:47.860 --> 00:38:49.659
end up spending some money. But there are all
00:38:49.659 --> 00:38:51.460
these other hidden costs of a house that people
00:38:51.460 --> 00:38:53.420
don't think about. And, you know, it's one thing
00:38:53.420 --> 00:38:55.219
when it's your own home. I think often people
00:38:55.219 --> 00:38:58.340
make the worst miscalculations on rental properties,
00:38:58.460 --> 00:39:00.369
right? They think that they're... Their mortgage
00:39:00.369 --> 00:39:04.170
is X, the insurance is X, and yes, you should
00:39:04.170 --> 00:39:07.010
shop for that. And what could go wrong? And then
00:39:07.010 --> 00:39:09.469
the property taxes, and then somebody's going
00:39:09.469 --> 00:39:11.230
to live in it and pay for all the rest of the
00:39:11.230 --> 00:39:14.190
things. And that's not the reality of homeownership.
00:39:14.510 --> 00:39:17.909
Homes are expensive, even new homes, old homes
00:39:17.909 --> 00:39:21.130
especially. But as these homes age, there's constant
00:39:21.130 --> 00:39:22.789
upkeep. There's things that you have to do. There's
00:39:22.789 --> 00:39:24.710
maintenance on the property that has to make
00:39:24.710 --> 00:39:26.590
sure that the snow is cleared and the grass is
00:39:26.590 --> 00:39:29.420
cut and all those other things. If you're in
00:39:29.420 --> 00:39:31.579
a condo, you know, you've got dues. And by the
00:39:31.579 --> 00:39:32.840
way, all these things that we're talking about,
00:39:32.880 --> 00:39:34.940
they never go down. Like homeownership makes
00:39:34.940 --> 00:39:38.280
these costs continually rise. You know, insurance
00:39:38.280 --> 00:39:43.539
goes up always. Taxes go up always. And that's
00:39:43.539 --> 00:39:45.059
just the reality of it. The only thing, you know,
00:39:45.059 --> 00:39:47.739
going down as it should. It's the value of your
00:39:47.739 --> 00:39:50.940
home. I'm joking. Hopefully not the value. Hopefully
00:39:50.940 --> 00:39:53.440
only the mortgage. That's like the happy path.
00:39:53.789 --> 00:39:56.449
right is like values going up mortgage is going
00:39:56.449 --> 00:39:58.190
down all these things are holding steady that's
00:39:58.190 --> 00:40:01.409
not really like yes like over a long period of
00:40:01.409 --> 00:40:03.590
time those things might play out but the reality
00:40:03.590 --> 00:40:05.829
is you've got to be a bit ruthless and understanding
00:40:05.829 --> 00:40:07.909
how much money you have coming in how much money
00:40:07.909 --> 00:40:11.289
you have going out assume for increases and all
00:40:11.289 --> 00:40:12.829
those things and then your income has to keep
00:40:12.829 --> 00:40:14.230
up with that through the years that's that's
00:40:14.230 --> 00:40:17.039
really If there's anything that is making people
00:40:17.039 --> 00:40:19.820
fearful in today's society, they are seeing their
00:40:19.820 --> 00:40:22.699
income not rise as fast as all the living expenses
00:40:22.699 --> 00:40:25.320
around them. Yeah, yeah. I think I've heard somewhere
00:40:25.320 --> 00:40:28.039
that buying a house is being in a constant war
00:40:28.039 --> 00:40:32.400
with water. My eavesdrops just fell off two days
00:40:32.400 --> 00:40:34.760
ago. I am not happy about that because they were
00:40:34.760 --> 00:40:37.599
just fixed last year. To carry on that point,
00:40:37.719 --> 00:40:39.699
there's a Mike Tyson quote I love, which is everyone
00:40:39.699 --> 00:40:41.179
has a plan until you're punched in the face.
00:40:41.320 --> 00:40:43.460
Right. And that's the start of homeownership
00:40:43.460 --> 00:40:46.300
all the way through. And you mentioned property
00:40:46.300 --> 00:40:49.000
insurance. I got very lucky that when I bought
00:40:49.000 --> 00:40:50.980
my home, I worked at General Mills at the time.
00:40:51.320 --> 00:40:54.619
And there was this life insurance booth at the
00:40:54.619 --> 00:40:56.659
office just for like a day of all the companies
00:40:56.659 --> 00:40:59.719
that work with a big corporation. And they had
00:40:59.719 --> 00:41:02.699
a great deal going on. But so my suggestion to
00:41:02.699 --> 00:41:04.260
everyone is when you're going through all the
00:41:04.260 --> 00:41:06.599
disjointed parts of homeownership from real estate
00:41:06.599 --> 00:41:08.119
to mortgage to life insurance, property insurance,
00:41:08.260 --> 00:41:10.360
real estate law, movers, all these things, one,
00:41:10.440 --> 00:41:12.159
try to find a place that encapsulates those as
00:41:12.159 --> 00:41:14.380
much as possible or do your research. But two,
00:41:14.519 --> 00:41:16.739
if you work at a big company, see if they have
00:41:16.739 --> 00:41:18.699
a preferred rate. Because a lot of corporations,
00:41:19.039 --> 00:41:21.340
be it at a place like Walmart, let's say you're
00:41:21.340 --> 00:41:23.179
someone who works at Walmart as a cashier or
00:41:23.179 --> 00:41:24.500
you're someone who's in the corporate office,
00:41:24.699 --> 00:41:26.360
there's a lot of really great deals they have
00:41:26.360 --> 00:41:28.599
there. But also, we work with a company called
00:41:28.599 --> 00:41:31.159
Walnut. I'm sure you know David Himmel. David's
00:41:31.159 --> 00:41:34.420
always giving me shouts. They're great. They
00:41:34.420 --> 00:41:36.960
shop around for you. And that's another thing
00:41:36.960 --> 00:41:38.559
that people could do. There's also life insurance
00:41:38.559 --> 00:41:40.900
considerations when you buy a home. My first
00:41:40.900 --> 00:41:43.039
home, I didn't buy life insurance because I mentioned
00:41:43.039 --> 00:41:45.719
I was single. Second home, wife, one and a half
00:41:45.719 --> 00:41:47.559
kids at that time, I did buy life insurance.
00:41:47.900 --> 00:41:49.960
But there's two options. You can look at creditor
00:41:49.960 --> 00:41:53.460
insurance, which I don't love because your creditor
00:41:53.460 --> 00:41:55.219
insurance premium, which is the amount that you
00:41:55.219 --> 00:41:58.039
would get if anything happened, goes down with
00:41:58.039 --> 00:41:59.940
the size of your mortgage. So it's basically
00:41:59.940 --> 00:42:02.079
placed against your mortgage, whereas life insurance
00:42:02.079 --> 00:42:05.360
is a full -term life. Those are things you could
00:42:05.360 --> 00:42:06.760
determine as well when you're going through the
00:42:06.760 --> 00:42:09.380
processes. Do you want life insurance right now?
00:42:09.440 --> 00:42:12.039
Do you need it? That's a question a lot of people
00:42:12.039 --> 00:42:13.800
have to ask themselves. When people are young,
00:42:13.840 --> 00:42:15.679
they think life insurance is a scam. My brother
00:42:15.679 --> 00:42:18.519
and I quote said, why am I paying money for people
00:42:18.519 --> 00:42:21.500
to get money when I am dead? Right. Totally.
00:42:21.679 --> 00:42:24.559
But it's the classic thing is it protects, it
00:42:24.559 --> 00:42:25.840
could protect your family if anything happens.
00:42:25.960 --> 00:42:28.070
Because a lot of people don't realize. let's
00:42:28.070 --> 00:42:30.449
say you're the individual breadwinner in the
00:42:30.449 --> 00:42:32.630
family or you just make more money than your
00:42:32.630 --> 00:42:34.530
significant other and you do happen to pass away.
00:42:35.030 --> 00:42:37.469
No, absolutely. You're in a situation where that
00:42:37.469 --> 00:42:40.130
can protect your family. And it's something people
00:42:40.130 --> 00:42:41.769
do have to think about when they are buying a
00:42:41.769 --> 00:42:44.869
home. So this is wonderful. Great conversation.
00:42:45.110 --> 00:42:46.949
We're going to flip the script a little. We're
00:42:46.949 --> 00:42:48.170
going to get our whiteboards out and we're going
00:42:48.170 --> 00:42:50.239
to play a fun little game. So guys, we're going
00:42:50.239 --> 00:42:53.400
to play Never Have I Ever Mortgage Edition. I'm
00:42:53.400 --> 00:42:56.400
going to ask Jesse and Bekem some questions and
00:42:56.400 --> 00:42:58.860
they'll let us know and I will as well if we
00:42:58.860 --> 00:43:02.159
have or have not done these scenarios. So the
00:43:02.159 --> 00:43:05.519
first Never Have I Ever is never have I ever
00:43:05.519 --> 00:43:09.139
signed a mortgage without knowing any of the
00:43:09.139 --> 00:43:13.960
terms, prepayment terms, the APR. So the answers
00:43:13.960 --> 00:43:20.960
are I have and then never. And the verdict is
00:43:20.960 --> 00:43:25.619
Jesse and I have. And Big Kim is just smarter
00:43:25.619 --> 00:43:28.960
than us. My first mortgage, I was not a mortgage
00:43:28.960 --> 00:43:31.199
guy. My first mortgage, I was like, where do
00:43:31.199 --> 00:43:34.360
I sign? I just don't want to read any. And also
00:43:34.360 --> 00:43:36.099
the document is so long. I'm like, just, just.
00:43:36.599 --> 00:43:38.599
Just sign wherever. Is it good enough? My dad
00:43:38.599 --> 00:43:41.539
looked at it. Everything is monopoly money once
00:43:41.539 --> 00:43:44.420
you buy the home, right? Unfortunately, so. I
00:43:44.420 --> 00:43:46.199
remember showing up to my condo with a guy, I
00:43:46.199 --> 00:43:50.139
own 10 % of this parking spot. Hilarious. All
00:43:50.139 --> 00:43:53.239
right. Never have I ever signed a mortgage and
00:43:53.239 --> 00:43:55.320
magically hoped interest rates would go down
00:43:55.320 --> 00:44:04.380
right after I signed it. All right. This is the
00:44:04.380 --> 00:44:06.739
reverse. So Big Him, you're always hoping the
00:44:06.739 --> 00:44:08.440
interest rates go down. As a variable interest
00:44:08.440 --> 00:44:10.960
rate holder, always rooting for rates to go down.
00:44:11.019 --> 00:44:12.940
Whereas I feel like there's like a sickness to
00:44:12.940 --> 00:44:14.500
people who like lock in the fixed rate. They
00:44:14.500 --> 00:44:15.760
don't want to see everyone else get a lower rate
00:44:15.760 --> 00:44:17.780
after them. Oh, it's true. It's like getting
00:44:17.780 --> 00:44:19.300
the good deal on your car. It's like, I don't
00:44:19.300 --> 00:44:21.500
want anyone else to get that. I just stopped
00:44:21.500 --> 00:44:23.119
thinking about a mortgage after I signed it.
00:44:24.340 --> 00:44:26.579
I was like, I don't want to know. I spent a lot
00:44:26.579 --> 00:44:28.960
of time doing this. We have it. We've done the
00:44:28.960 --> 00:44:32.409
math. Don't talk to me. Okay, let me see. This
00:44:32.409 --> 00:44:35.489
is a little bit different. This is not just mortgages,
00:44:35.510 --> 00:44:37.610
but this is never have I ever, and this could
00:44:37.610 --> 00:44:39.750
be, remember, think of being young, think of
00:44:39.750 --> 00:44:42.010
being students, think of your first job, but
00:44:42.010 --> 00:44:45.449
never have I ever gotten paid in the morning
00:44:45.449 --> 00:44:47.369
and spent all that money by the end of the day.
00:44:52.889 --> 00:44:57.090
I am reverse carpe diem, man. Wow. As a founder.
00:44:57.210 --> 00:44:59.630
So you're like out to take the big risks, not
00:44:59.630 --> 00:45:01.550
the small risks. It is the weirdest thing in
00:45:01.550 --> 00:45:05.469
the world. But I live my life like I'm 65. So
00:45:05.469 --> 00:45:08.889
very nice. Very nice. So there was never like
00:45:08.889 --> 00:45:10.610
a job when you were young. So I used to work
00:45:10.610 --> 00:45:12.510
at a car wash and I would make my like my day's
00:45:12.510 --> 00:45:15.989
tips in cash as an 18 year old. And that was
00:45:15.989 --> 00:45:17.869
the most tempting dollars that I had ever got
00:45:17.869 --> 00:45:19.170
in my life because I would literally have like
00:45:19.170 --> 00:45:22.969
$400 in singles as an 18 -year -old for the day.
00:45:23.050 --> 00:45:27.690
What do you do with $400 in singles? I made a
00:45:27.690 --> 00:45:29.750
lot of bad decisions. This is a family show.
00:45:30.070 --> 00:45:33.210
I was a ref in high school. It was a great job.
00:45:33.389 --> 00:45:35.130
And I remember being like, I'm going to save
00:45:35.130 --> 00:45:37.530
this money. And I'm going to keep saving. I don't
00:45:37.530 --> 00:45:39.269
know. I grew up with a frugal father, I guess.
00:45:39.329 --> 00:45:43.150
And it was instilled deeply upon me. I probably
00:45:43.150 --> 00:45:45.030
should have done more, but I did not, unfortunately.
00:45:45.309 --> 00:45:47.710
It's famous last words. I know, seriously. You
00:45:47.710 --> 00:45:49.489
don't get buried with the money, as they say.
00:45:50.010 --> 00:45:52.989
All right, last question. Never have I ever made
00:45:52.989 --> 00:45:57.489
a purchase at 4 a .m. and regretted it. Cool.
00:46:03.750 --> 00:46:06.429
All right, unanimous, unanimous. Okay, we start
00:46:06.429 --> 00:46:08.449
with you, Jesse. What did you buy at 4 a .m.?
00:46:08.449 --> 00:46:11.159
I was in Vegas. I don't gamble. I never gamble,
00:46:11.239 --> 00:46:12.900
but I decided to because I was on a bachelor
00:46:12.900 --> 00:46:16.059
party and I put like $50 on, I forget what it
00:46:16.059 --> 00:46:18.619
was, red or something. And I won 200 bucks, went
00:46:18.619 --> 00:46:20.179
up to the room and I bought this stuff. I had
00:46:20.179 --> 00:46:22.519
my cart on, I don't know if you guys remember
00:46:22.519 --> 00:46:24.559
the site East Bay. You probably know as an American,
00:46:24.619 --> 00:46:27.599
it's like the OG online shoe store. Bought myself
00:46:27.599 --> 00:46:29.039
a couple pairs of shoes. I was pretty happy.
00:46:29.380 --> 00:46:31.820
So you don't regret it. Do you regret it? Oh,
00:46:31.820 --> 00:46:34.679
zero. So that's never. I regretted it in the
00:46:34.679 --> 00:46:38.440
morning because I didn't want to do it. But yeah.
00:46:39.420 --> 00:46:41.519
Best thing I ever bought. No, in the moment.
00:46:41.579 --> 00:46:43.539
In the moment, it was a terrific decision. I
00:46:43.539 --> 00:46:45.079
woke up in the morning being like. It's just
00:46:45.079 --> 00:46:48.199
shoes, Jesse. Don't need those shoes. All right.
00:46:48.219 --> 00:46:54.099
Big regret. 4am. For me, it's always food. Like
00:46:54.099 --> 00:46:56.559
if I'm up at four in the morning, I'm starving
00:46:56.559 --> 00:46:58.820
at that point. And then I make a terrible decision.
00:46:59.000 --> 00:47:00.980
I get the greasiest food. And then I wake up
00:47:00.980 --> 00:47:02.860
the next morning and I'm like, why, why, why?
00:47:03.860 --> 00:47:05.760
Waste of money. I feel terrible. I feel worse.
00:47:06.409 --> 00:47:09.809
than I would have if I just had fasted. So good
00:47:09.809 --> 00:47:12.429
in the moment. That's the point. Just take care
00:47:12.429 --> 00:47:13.929
of yourself then and deal with the consequences
00:47:13.929 --> 00:47:17.269
later. So my purchase at 4 a .m., I was a new
00:47:17.269 --> 00:47:19.750
mom and my baby wouldn't sleep and it was week
00:47:19.750 --> 00:47:22.510
seven. And at 4 a .m., which after having not
00:47:22.510 --> 00:47:24.530
slept for many, many days, I went online and
00:47:24.530 --> 00:47:29.789
I bought a $1 ,600 rocking bassinet, which actually
00:47:29.789 --> 00:47:32.179
does not make a difference to the baby. Turns
00:47:32.179 --> 00:47:34.059
out. And at the same time, I bought everything.
00:47:34.159 --> 00:47:35.719
I was like, whatever makes this baby sleep. What
00:47:35.719 --> 00:47:37.880
was it? I remember that one. I remember seeing
00:47:37.880 --> 00:47:40.619
the new. It's the new. Yes. I had some friends
00:47:40.619 --> 00:47:42.659
who swore by the thing. They said it was incredible.
00:47:42.940 --> 00:47:44.840
Honestly, I bought the new. I bought this other
00:47:44.840 --> 00:47:46.599
thing. Rockabye baby. I don't know what it's
00:47:46.599 --> 00:47:48.599
called. I had one of those. Yeah, I was at that
00:47:48.599 --> 00:47:50.679
for I was like, I will buy everything. Every
00:47:50.679 --> 00:47:53.380
last dollar I have just so I can sleep. So that
00:47:53.380 --> 00:47:55.139
was my purchase. That's a worthwhile purchase.
00:47:55.380 --> 00:47:57.679
Yes. Well, thank you both for joining us. We
00:47:57.679 --> 00:48:00.400
had a lot of fun. We learned a lot. Before we
00:48:00.400 --> 00:48:03.940
leave any. last takeaways for people looking
00:48:03.940 --> 00:48:05.920
to buy as they think of the future? Where do
00:48:05.920 --> 00:48:07.619
you think life is going when it comes to homes
00:48:07.619 --> 00:48:10.980
and mortgages in Canada? My last piece of advice
00:48:10.980 --> 00:48:13.960
is just have fun with it. It's an exciting time
00:48:13.960 --> 00:48:16.500
in your life. Go get a pre -approval. Go figure
00:48:16.500 --> 00:48:19.099
out what you could afford. Don't let all the
00:48:19.099 --> 00:48:21.340
negativity in the media that says you're never
00:48:21.340 --> 00:48:22.739
going to be able to afford a home say that you
00:48:22.739 --> 00:48:25.360
won't be able to actually do it. Try to see what
00:48:25.360 --> 00:48:28.659
you can afford and then look to buy. And a lot
00:48:28.659 --> 00:48:30.019
of people always ask the question, is now a good
00:48:30.019 --> 00:48:32.469
time to buy? There's never the exact pinpoint
00:48:32.469 --> 00:48:34.530
moment when it is the right time to buy, but
00:48:34.530 --> 00:48:37.110
shop around, try to find a good realtor too who
00:48:37.110 --> 00:48:39.690
meets what your needs are and start looking because
00:48:39.690 --> 00:48:41.170
there's people who are getting great deals right
00:48:41.170 --> 00:48:42.590
now in the market we're in right now because
00:48:42.590 --> 00:48:44.329
what's that Warren Buffett line? I'm going to
00:48:44.329 --> 00:48:46.150
paraphrase it, but the best time to buy is when
00:48:46.150 --> 00:48:48.530
no one else is buying. The market's slow right
00:48:48.530 --> 00:48:51.210
now. Have a look and you might find the perfect
00:48:51.210 --> 00:48:52.949
home that you're looking for. Awesome. Love it.
00:48:53.289 --> 00:48:56.659
Beckham, how about you? So I think that... When
00:48:56.659 --> 00:48:58.320
I think of buying a home, it's like going into
00:48:58.320 --> 00:49:01.059
a haunted house. It's only scary because you
00:49:01.059 --> 00:49:02.639
don't know what you're doing and you don't know
00:49:02.639 --> 00:49:04.579
what's coming out at you next. And if you go
00:49:04.579 --> 00:49:05.880
through a haunted house and they turn the lights
00:49:05.880 --> 00:49:08.360
on, it wouldn't be that scary anymore. It's just
00:49:08.360 --> 00:49:10.300
a bunch of people wearing bed sheets. It's like,
00:49:10.340 --> 00:49:12.719
yeah, quite silly. All around the masks. Right.
00:49:13.380 --> 00:49:16.239
But if you go and you go into the home buying
00:49:16.239 --> 00:49:18.019
process and you have experts on your side, you
00:49:18.019 --> 00:49:19.300
know, on the real estate front, on the legal
00:49:19.300 --> 00:49:21.380
front, on the mortgage front, on the insurance.
00:49:22.139 --> 00:49:24.199
And, you know, even better if you can find somebody
00:49:24.199 --> 00:49:25.860
who sort of like brings a lot of those services
00:49:25.860 --> 00:49:29.579
into a single cohesive unit to help support you
00:49:29.579 --> 00:49:31.360
so that you're not tackling all these items individually.
00:49:31.800 --> 00:49:34.280
I think that's the biggest thing. And I think
00:49:34.280 --> 00:49:36.420
why people get scared around buying a home is
00:49:36.420 --> 00:49:38.980
just that it's the haunted house analogy. It's
00:49:38.980 --> 00:49:41.139
the uncertainty. But if you remove the uncertainty,
00:49:41.360 --> 00:49:44.320
it's not that scary. And you can act with confidence.
00:49:45.000 --> 00:49:47.019
Okay, I love it. All right. That's it for today's
00:49:47.019 --> 00:49:49.380
episode of FinTalk. Mortgages aren't just paperwork.
00:49:49.599 --> 00:49:52.480
They're 25 -year commitments, renewal cycles,
00:49:52.780 --> 00:49:54.960
negotiation opportunities, and lots of shopping
00:49:54.960 --> 00:49:57.659
around. And for most Canadians, the biggest financial
00:49:57.659 --> 00:50:00.000
decision of their lives. If this conversation
00:50:00.000 --> 00:50:02.940
made you think, good. That's the point. Because
00:50:02.940 --> 00:50:05.400
the goal isn't to feel overwhelmed. It's to feel
00:50:05.400 --> 00:50:08.539
informed. It's to move from guessing to strategy.
00:50:08.920 --> 00:50:11.539
Thank you, Big Kim and Jesse, for breaking it
00:50:11.539 --> 00:50:13.730
down with us today. If you found this helpful,
00:50:13.869 --> 00:50:15.610
share it with someone who's buying, renewing,
00:50:15.610 --> 00:50:18.469
or quietly panicking about their mortgage. And
00:50:18.469 --> 00:50:21.590
remember, this is a judgment -free zone. The
00:50:21.590 --> 00:50:23.769
only bad money question is the one you don't
00:50:23.769 --> 01:32:43.319
ask. See you next time on FinTalk. I feel bad
01:32:43.319 --> 01:32:45.960
that Chris is just going to, these are, I mean,
01:32:45.979 --> 01:32:47.619
I was like, in case it gets caught on camera,
01:32:47.720 --> 01:32:49.960
I don't want to wear those boots. Oh, you had
01:32:49.960 --> 01:32:51.819
other shoes? That's it. That's it. How can you
01:32:51.819 --> 01:32:54.819
get those things to clean? I've now got, I don't
01:32:54.819 --> 01:32:56.260
know what's going to be on camera. Every sock
01:32:56.260 --> 01:32:57.920
I have now is YouTube because my wife works at
01:32:57.920 --> 01:33:00.279
Google and she's putting me on Google YouTube
01:33:00.279 --> 01:33:04.569
socks. I look like I'm something important. Yeah,
01:33:04.590 --> 01:33:07.789
you do. You're sponsored by YouTube? Theoretically,
01:33:07.789 --> 01:33:10.310
I am because I'm a startup founder. My wife is
01:33:10.310 --> 01:33:13.989
the moneymaker. What does she do at Google? Events.
01:33:14.310 --> 01:33:15.130
Oh, yeah, you mentioned those. She runs their
01:33:15.130 --> 01:33:18.670
events team, yeah. So great swag. Yeah, I can
01:33:18.670 --> 01:33:20.210
imagine. I never invited her to events, but she
01:33:20.210 --> 01:33:22.329
did FaceTime me with William Nylander this summer.
01:33:22.470 --> 01:33:24.489
I was like, oh, thanks. I would have liked to
01:33:24.489 --> 01:33:26.010
be there. They did a huge party at Google. I
01:33:26.010 --> 01:33:29.739
was invited. I went with Snoop Dogg in SF. Oh,
01:33:29.760 --> 01:33:31.479
wow. Yeah, Snoop Dogg is everything you imagined
01:33:31.479 --> 01:33:34.060
him to be. Yeah. And more. The cool uncle. He
01:33:34.060 --> 01:33:37.920
did our Rocket company party a couple years ago.
01:33:38.000 --> 01:33:39.659
And he is everything you imagined him to be.
01:33:39.739 --> 01:33:41.800
Rocket is pretty sweet. We got Snoop Dogg. We
01:33:41.800 --> 01:33:48.859
got Diplo, Lil Wayne. What? Eminem was this year.
01:33:48.899 --> 01:33:52.260
I'm sorry, what? We weren't there for it. So
01:33:52.260 --> 01:33:54.300
Rocket is making a lot of money. They're doing
01:33:54.300 --> 01:33:59.180
a lot. That Redfin purchase, too, is massive.
01:33:59.579 --> 01:34:00.979
The bigger one is Mr. Cooper. I'm surprised about
01:34:00.979 --> 01:34:02.619
Mr. Cooper. That was a $15 .5 billion acquisition.
01:34:03.260 --> 01:34:05.100
Mr. Cooper? I don't make sense. I was surprised.
01:34:05.100 --> 01:34:06.899
I don't even know what that is. They were the
01:34:06.899 --> 01:34:09.020
largest servicer of mortgages in the U .S. So
01:34:09.020 --> 01:34:10.439
it's not a business model that really exists
01:34:10.439 --> 01:34:12.319
in Canada. In Canada, if you get your mortgage
01:34:12.319 --> 01:34:14.000
from somebody, they hold on to the servicing.
01:34:14.000 --> 01:34:16.840
Yeah, yeah, yeah. In the U .S. It's just off
01:34:16.840 --> 01:34:19.079
-balance sheets? Yeah, they'll actually sell.
01:34:19.279 --> 01:34:22.119
Got it. Mr. Cooper reached out to us about acquisition
01:34:22.119 --> 01:34:23.859
when we were two years in the business. They
01:34:23.859 --> 01:34:25.579
thought we were a company. They collect the interest
01:34:25.579 --> 01:34:29.359
of the U .S. They're like, sorry. You should
01:34:29.359 --> 01:34:31.920
just sign. I know. I'm like, holy shit. They
01:34:31.920 --> 01:34:33.180
want to talk to us about acquisition, Mr. Cooper.
01:34:33.279 --> 01:34:34.539
We're literally two years into our business,
01:34:34.600 --> 01:34:36.119
but there's a company called HomeWise Docs in
01:34:36.119 --> 01:34:38.439
the US and they just wanted a small. I like that
01:34:38.439 --> 01:34:42.369
all I see is a giant face of a manatee. You guys
01:34:42.369 --> 01:34:45.310
don't see it. That's what I'll say. She's very
01:34:45.310 --> 01:34:48.069
good looking. Yeah. I believe a lot of sailors
01:34:48.069 --> 01:34:51.489
think she's got mermaid potential. Those are
01:34:51.489 --> 01:34:53.350
the original sirens of the sea. There you go.
01:34:53.449 --> 01:34:55.149
I mean, you've been out of sea long enough. You're
01:34:55.149 --> 01:34:59.649
like, that's a woman. A hundred percent. And
01:34:59.649 --> 01:35:01.670
how does that have to do with mortgages? Well,
01:35:01.789 --> 01:35:05.689
you'd be surprised. Tell us more, Jesse. Tell
01:35:05.689 --> 01:35:07.670
us all about the manatees in your home. Sometimes
01:35:07.670 --> 01:35:14.250
you got to settle. Low credit, bad credit. No
01:35:14.250 --> 01:35:18.609
credit. Exactly. I'm just waiting for James to
01:35:18.609 --> 01:35:20.810
tell me when to go. Okay. We're going to do,
01:35:20.850 --> 01:35:22.649
we're going to do like a little intro. Yeah.
01:35:22.710 --> 01:35:24.729
Let's get professional. We're going to do a little
01:35:24.729 --> 01:35:28.170
intro and then I'm going to just pass over to
01:35:28.170 --> 01:35:31.050
you guys to be like, do you remember signing
01:35:31.050 --> 01:35:32.770
your first mortgage? And what was that like?
01:35:32.829 --> 01:35:34.909
We're going to open there and then we just take
01:35:34.909 --> 01:35:37.470
it from there. Awesome. Okay. Alrighty. Okay.
01:35:38.960 --> 01:35:41.260
So we're going to go three, two, one, go. Are
01:35:41.260 --> 01:35:45.760
we good, James? Can you guys hear him? I can't
01:35:45.760 --> 01:35:51.800
hear you. I cannot. Maybe turn the dial up. Yeah.
01:35:52.840 --> 01:35:56.640
Check, check. One, two, one, two. I can hear
01:35:56.640 --> 01:36:02.960
you now. Okay. Perfect. Oh, fans going off. How
01:36:02.960 --> 01:36:04.939
long is this? That was blowing his sickness away
01:36:04.939 --> 01:36:10.220
from me. Like a little bit toward me. How long
01:36:10.220 --> 01:36:12.100
are we filming for? I feel like I'm going to
01:36:12.100 --> 01:36:15.420
be sweating by the end of this. Yeah. I will
01:36:15.420 --> 01:36:21.100
take breaks. This is not the military. I'll muscle
01:36:21.100 --> 01:36:24.439
through. This shirt should hide me. That's a
01:36:24.439 --> 01:36:27.300
great shirt material. I know that material. It's
01:36:27.300 --> 01:36:30.380
the no sweat material. Every man has a couple
01:36:30.380 --> 01:36:32.720
of those shirts and they always wear them. August,
01:36:32.800 --> 01:36:36.640
September. I love how men have like very specific
01:36:36.640 --> 01:36:39.220
things they care about. You gotta be careful.
01:36:39.359 --> 01:36:41.800
Because like women had stuff figured out before
01:36:41.800 --> 01:36:43.619
us and like men just started to realize like
01:36:43.619 --> 01:36:46.300
comfort. They're like, wait a minute, I can look
01:36:46.300 --> 01:36:49.279
good and feel good. Just so you know, the pants
01:36:49.279 --> 01:36:51.899
I wear every day, not these, are jeans that are
01:36:51.899 --> 01:36:54.039
actually sweatpants. They're Uniqlo. They're
01:36:54.039 --> 01:36:56.199
incredible. Oh yeah, Uniqlo's got great stuff.
01:36:56.730 --> 01:36:58.789
We've had stuff like that for years, Jesse. Oh,
01:36:58.810 --> 01:37:00.609
that's what I mean. You guys are all way ahead
01:37:00.609 --> 01:37:03.850
of us. Guys with this super hard denim. Because
01:37:03.850 --> 01:37:06.489
you're going to go into the mine and dig stuff.
01:37:06.670 --> 01:37:09.970
It's true. It is true. I know. I'm not going
01:37:09.970 --> 01:37:12.449
to dare. We can all hear you. We're ready to
01:37:12.449 --> 01:37:23.529
go. All right. That was not a good photo. It's
01:37:23.529 --> 01:37:27.039
not that kind of show, people. I'm Howard Stern.
01:37:27.479 --> 01:37:33.279
Yeah. You want to pull a gym from the office?
01:37:38.560 --> 01:37:45.319
Awesome. It's a good thing I have a zero tan
01:37:45.319 --> 01:37:49.039
ever in my life. That's fine. We're going to
01:37:49.039 --> 01:37:50.840
make you guys look beautiful. Robert Pattinson
01:37:50.840 --> 01:38:08.720
look, right? Vampire. Bekem. No. How do you want
01:38:08.720 --> 01:38:12.720
me to say it? Bekem. Bekem. Yeah. Merdita. Yes.
01:38:13.479 --> 01:38:13.920
Got it.