Getting the best home mortgage is about more than just considering interest rates and points or whoever offers you the best free giveaways. You want a package that fits your lifestyle and financial goals. In order to get that, you need to boost your mortgage IQ.
In this episode, Angela Calla, author of The Mortgage Code and in the top 1% of all mortgage brokers in Canada, deconstructs the myths around mortgages. She tells you what banks won’t say, she outlines your responsibilities as a borrower, and a whole lot more. Whether you’re buying your first home or downsizing or building a real estate portfolio, this episode will help you understand the mortgage process so you can save money and make the right decisions.
Angela Calla: When our family immigrated to Canada, they all lived together in one house and saved money so they could build their families and own their own home. How they did it and their frugalness is just a part of my blood. Growing up at the dinner table, at a very young age, the conversation was always, “Start saving money early because anything that you ever want is going to be five times more expensive and harder than it ever was for us.”
The only thing that you have to work for you is time.
My parents were super hard workers and I’m an only child. Honestly, I consider them my best friends. They knew, at a super young age, I was willing to do whatever it took and I would follow those who had already demonstrated the success that I admired and wanted to have, and they supported me in that 100%.
“We were a one income family.”
My mom stayed home and my dad worked around the clock, and we had a home. When I was in middle school, they said, “Hey, if you want the kind of clothes your friends are wearing, I’m so sorry, we love you so much but we can’t help you, you’re going to have to start working,” and I was like, “No problem. I don’t want to hang out with these people anyways because they’re teasing me that I don’t have what they have.”
So I get to make money, get away from them and get some experience. This is awesome. It’s consistent with what you guys always told me. Anything I want, I’m going to have to start at a young age because it’s going to be that much harder.
So I basically was an average student before that in elementary school, and I went to middle school and in grade nine, I started going to school from nine to three and working from five to nine.
I was able to save money. My teachers were always amazed that I was all of a sudden on the honor roll and I was getting all my homework done, and so they were really reinforcing and encouraging me of that behavior.
We had an accounting teacher in one of our classes that said, “Hey, if you bring me $100 today then I can show you how to have a million dollars by the time you’re 65.”
That for me was the moment where I was like wow, all the stars have totally aligned for me, I’m so excited, I can’t wait to start this journey early and learn about compounding interest.
These moments, these little things that you pick up along the way from teachers who care or mentors who care or people who just care to deliver the best of their knowledge is what makes the difference. It’s not always you know, the whole education as a whole that you learn. Sometimes, it’s one little component that you pick up and then you build the foundation on that.
As time went on, I didn’t know exactly what I wanted to be when I grew up, but I knew that I wanted to be something surrounding real estate. Because the immigration story for both of my parents, I was always really admirable of and also, with that, I wanted to be in real estate. But I didn’t really want to be a real estate agent.
I got recruited right out of high school for my first job and worked my way up in my first job and then was running the North Shore Business Club at the time at 19 years old. I met a mortgage broker and I learned what they did.
I had remembered, when I was a young girl, back in the 90s, my parents were one of the early adoptors to use a mortgage broker when they learned what a mortgage broker did. I just couldn’t believe it that as a mortgage broker, you could help people.
One big difference here in Canada compared to the US is you don’t pay a mortgage broker, the lender pays the mortgage broker.
Learning that you can save people money and help them with the most fundamental need, which is everyone needs somewhere to live, and then have them live a better lifestyle around that. I became really passionate about it and it just felt really intuitively and also passionately that this was what my purpose was.
“I began educating people.”
I became really passionate about educating people and how they can get ahead and how they can use just what they’re already doing to their advantage and how to understand the system and to take the why away. Because everybody’s wondering why.
Why would I use a mortgage broker? Why won’t I just get the best from my bank? Why do you need these documents? And so when you get the opportunity to educate people end, then you’re empowering them and then you’re elevating them next level.
They’re not spending that time and the hesitation, the question, they’re spending their time on action that’s actually delivering them results of saving money and living a better life.
Set Up for Success
Charlie Hoehn: Break down some of the myths around mortgages?
Angela Calla: Well, there are a variety of myths, and I think the biggest thing to understand when you’re getting a mortgage is who you select to work with as your mortgage provider is going to be the number one contributing factor to your success.
Charlie Hoehn: What do you mean by success?
Angela Calla: Well, success because the market is always changing. Just like every year, the weather pattern changes, the earth changes, air quality is changing, everything is always changing. Strategies that you may have used six months ago, six weeks ago, six days ago may not be relevant, and you can look at this in a very easy way.
“If you spend your time looking in the rearview mirror, you’re not seeing what’s in front of you.”
So much data comes out on a daily basis that utilizing that data is what’s going to help you move forward. Now, I have the fortunate ability where I’ve been doing a one hour radio show on mortgages for The Mortgage Show on CKNW for the last decade. It’s a hands on show of what’s happening in the market that week that is going to impact mortgages on a moving forward basis.
Now, there are some basic fundamentals of a mortgage that you should know, and the number one thing is that the rate is not the most significant contributing factor on what’s going to result in the best mortgage. What is going to result in the best mortgage is the terms of the mortgage and the ongoing mortgage management and modifications that you’re making along the way.
There’s basically three things: it’s planning, optimizing, and protecting that are going to contribute—because getting a mortgage is not instant pot cooking.
It’s not getting a mortgage, setting it and forgetting it. There are things that happen in the market on a daily, weekly, monthly, quarterly basis that will impact your mortgage if you’re not using that information to help you on a moving forward basis.
What’s at Stake
Charlie Hoehn: Break this down in even simpler terms of like, if you mess this up, if you fall for one of these myths, this is what happens but if you get this right, if you don’t chase rates for instance, and instead you care about the terms, this is what happens.
Angela Calla: Definitely. Well, the biggest myth is that the interest rate is the most significant contributing factor to getting the best mortgage, and it’s actually the worst thing. If you deal with a lender directly to get a mortgage and if you’re looking based on interest rate or you’re looking online and you’re looking to get a mortgage based on the lowest rate, you have to think in terms of how the lender’s going to justify that interest rate.
Often, it’s with the terms.
Here in Canada, 7 out of 10 Canadians break their mortgage within the first 36 to 48 months of their mortgage term.
With that in mind, if you’re going for a low interest rate, what you’re usually sacrificing is your ability to make a change when the market dictates that you should make a change and it’s not only the market, it’s your life.
To give you a quick example, don’t shut down, this is a very easy math example. On a $300,000 mortgage, would you rather have the ability to pay $3,000 and get out of that mortgage at any time to move up the property ladder to take out your equity to pay out debt? To pay for your kids to go to school, to any emergency that comes up?
Or what about if you’re stuck because that penalty is $15,000 and there’s not enough equity in your home, you can’t make that move and the change is in the market just aren’t conducive to you benefitting from that.
Do you want to be stuck and handcuffed to a mortgage that looked like a good rate upfront but comes with these gross terms at the end?
Let’s play an exercise together, Charlie: what sounds better, getting a 0% discount off the interest rate or a 2% discount? What sounds better?
Charlie Hoehn: Two.
Angela Calla: Exactly. But what they don’t tell you and this is the myth is that their posted rates are 2% higher than anybody else’s and that 2% interest rate differential is going to be used against you when you need to make a modification. But it’s the psychology, think about that psychology.
You can’t do better until you know better, and you don’t know any better. Most people don’t know any better.
You think, it’s a psychological play. I’ve had my account there for 10 years, it’s where my parents had their account, of course they’re going to—why would they?
That’s the very simple thing when you read this book, that you’re going to understand, is any lender, even the best lender out there. They all have their turn, some lenders are great at some things, other lenders are great at all things.
At the end of the day, they’re all great, but nobody’s responsible for the outcome but you. If you go to them directly, their job is to sell you their product. When you go to McDonalds, they don’t say, “Our burgers, they’re not good today, go over to Burger King.”
Rethinking the Mortgage Experience
Charlie Hoehn: I know that a lot of people have had mortgage brokers that they just had a really rough go, it made the experience challenging for them, right?
Angela Calla: Well, that’s the thing you know? I’ve been really fortunate, I’ve been in business for 14 years. When you have a really good doctor, awesome. You don’t want to have to go to a walk in clinic unless it’s a super emergency. You just want to get back to your doctor. Because you know your doctor’s going to take in the consideration, your health history, all your health goals.
I love my family doctor because she’s not all about, “Hey, I’m just going to prescribe you this.” She’s like, “Let’s look at holistic, let’s look at vitamins, you know? Let’s do a blood test,” and I trust her and I’m not going to go and take somebody else’s advice because I know she’s considering all of the elements that are important to my treatment plan and what my health goals are.
“It’s no different with a mortgage.”
If you get a mortgage directly with a lender or with a broker who does every broker runs their business independently. If they don’t have a proactive system and something that they’re demonstrating to consistently help you over time, to help you optimize your life through the having the best mortgage then you’re unfortunately not going to have a great experience. That’s why who you select to work with is so important. At a bank, if someone’s really good at their job, they move up.
If they’re not that good at their jobs, they stay kind of stagnant. There’s some great people that work in the banking systems, but if you’re working with somebody who is honest with you, who works at the bank, they’re based on sales.
Erica Johnson, here in 2017, won a broadcasting award for demonstrating how tough it is to work at a bank in Canada because the sales goals that you have are so tight and strict that it’s difficult for people to morally feel comfortable to be recommending and selling things to people that might not be in their best interest. As an independent mortgage professional, nobody tells me what to do and when to do it. I don’t have things that I have to sell or have to do.
“The reason why I’m in this business is to help you.”
Sometimes, helping someone might mean that maybe they’re in the best mortgage for whatever their scenario is right now, and maybe we’re not going to do business for three or even five years from now.
But I’m going to tell you what to do to continue to optimize it even if that means not doing business with me because our core values and the reason why I think I work among side the best people in the country that I’m honored to you know, work with on a daily basis and call my family is we’re all about doing whatever the best thing is for you even if that means us not doing business with you.
Finding a Good Broker
Charlie Hoehn: You’re in the top 1% of mortgage brokers in Canada for the last 15 years basically. How do I even find a broker like yourself?
Angela Calla: Well, you can always reach out to us and see if we have an associate that we believe maintains our level of standards in your area and of course, if you’re within a region where we can help you then of course our team will help you accordingly or help point you in the right direction.
If not, it’s really important to do your research and see who really leads consistently about educating people, because it’s so easy for people who are lazy and not maybe passionate.
We’re really passionate about what we do, and it would be easy all day long to just be like, yeah, take this low rate that has this really high exit fee because that’s what people want.
But when people call us and they say, what’s your best rate, it actually takes time and care and diligence to explain to them that we’re going to guarantee them the lowest cost of borrowing but we’re going to make sure that we do all the work and all the collaboration and invest all the time to ensure that they have clarity on their options and how to understand the differences between all the options out there.
“Because we get paid the same regardless of where we placed your mortgage.”
Actually, the lender who pays us the least amount is where we do the most amount of business because they have the lowest exit fee in Canada. So if I can guarantee a client that no matter what is going on in their life or in their market, they are going to have the lowest fee to get out of their mortgage.
Of course I am going to place some there because that’s what’s in their best interest.
So when you can actually explain that and show them the documents that compare that and demonstrate the examples to them and how that is going to help them based on their experience, then they just become raving fans and we’re so honored.
I would say our top three professions of people that we help are teachers, nurses, police officers.
Charlie Hoehn: Wow, I did not expect you to say teachers.
Angela Calla: Oh teachers love us because they operate the same way. They are all about enhancing education and having people think strategically and smartly and getting their things working for them. Teachers are our biggest fans.
I’ve told a few teachers that we work with that this book is coming out and they’ve actually asked for this book to be given to them. They want to put it in their school libraries, they want to talk about it in their classrooms.
It’s an honor. I’d have to say over 50% of our clients are in those three sectors.
It is amazing and police officers too because they are all patrolling in their car and they hear our radio show and we are on global morning news out here too.
I’ve been so passionate about this since I’ve been into this business that I have found the opportunities to be able to go on television and write for magazines and write for different newspapers and go on different programs because people want clarity.
I mean mortgages sound so confusing, but when you have someone who’s broken down the numbers given you the information that you need to make a decision, all of a sudden all that stress that you think you had just melts away and you feel so comfortable.
Meeting with Your Lender
Charlie Hoehn: What do the borrowers need to know before they meet with you? What are their responsibilities in order to set themselves up for success?
Angela Calla: It’s really easy basically you have to understand that it is a collaborative process and there is a thousand different things that can come up in a transaction, but think of it this way. Here by your side you have an airplane pilot who has over 10,000 hours of experience, and we are not going to overwhelm you and tell you all the thousands of things that can happen and which different directions this could go.
What we’re going to do is create the baseline.
You are going to call or email us and say, “How do I get the best mortgage?” We are going to have a quick five minute conversation about learning about what your goals are, and then we are going to send you the list of documents based on our conversation that we are going to need to evaluate your scenario and set you up for the next stage of your planning and your mortgage, and we are going to place you with all the introductions that are necessary, and we are going to guide you through.
Because we are not going to tell you about 30 or 50 different scenarios that can or can’t happen, because that is overwhelming and unnecessary and not fruitful or you gaining a clear path to your journey.
Think about this: we are not going to give you a diagnosis before we have done the proper evaluation. It’s no different with a mortgage.
So know that you have the most experienced individual if we have the privilege of working together with you, that is going to guide you through the process based on your circumstances. And you have to be collaborative and understanding.
Reading this book, you’ll understand the why behind everything and you will feel like an empowered equal partner at the table and you’ll be ready for anything that comes up. You’ll know that the people by your side know exactly what to do at what time.
Angela Calla’s Background in Mortgage
Charlie Hoehn: I feel as though this industry probably attracts a fair amount of people who think, “Oh this could be a high paying job and this is this thing.” But you really clearly speak to it from a place of sincerely wanting to help people, and it sounds like this is actually very fun for you and joyful.
Angela Calla: Oh I love it—this is my purpose. If I think of my roots in Canada and what I believe in and how my family immigrated to this country and how I live my life and what legacy you want to live behind and what kind of mother you want to be to your children and what qualities you hope to leave with them and the people that work alongside me and the life that I want to create for them…What’s important in life is not money.
We had one really cute couple, Rhonda and Ken that have been our clients for the last 14 years. It is a family affair, and they are the most incredible people ever. So of course they have the most incredible neighbors and their neighbors are now we’re looking at investing in a property in the United States actually because 30% of Canadians buy property in the US.
They were going to pull money out of their homes in a joint mortgage and their neighbors wanted to use the bank directly, and they said no.
“No way we’re investing with you. We’ve been working with Angela Calla and her team for 15 years, and we’re not doing it.”
So if we cannot agree on this partnership then there is absolutely no way we’d move forward, because they have saved us so much money throughout the life of our mortgage by their proactive mortgage management and by helping us restructure a debt and making sure that we didn’t make costly mistakes at renewal.
Every time we’ve helped them, we’ve saved this couple a couple hundred if not thousands of dollars a month, which is contributing to them having the option to look at buying investment property in the States.
So they’re like, “No way, we are not doing this together.” And so of course the neighbors then came and we helped them and they’re were looking at something in Palm Springs because they love to golf.
“Those are the types of relationships that we look to have.”
And that’s the type of loyalty that our clients give to us because we demonstrate our continual care for them.
It is really easy and comfortable to do business and we have a family environment here and it’s who we are as a team, it is who we are as people and it’s no different in our business. I feel that you are one person all the way in your life.
Charlie Hoehn: How you do one thing is how you do everything, as they say.
Angela Calla: I think so, yeah. I’ve often thought maybe syndicating my show down there, and my husband and I like Phoenix. I talk about that a little bit in the book, so we’re looking at buying a house in Phoenix right now and yeah, you never know, there might be an Angela Calla Mortgage Team up there in the future. We’re always looking up there.
Charlie Hoehn: Tell me Angela, sorry to interrupt you but you’ve been doing your radio show for how many years now?
Angela Calla: We’re going on 10 years on CKNW. An hour a week, and I bought my first home when I was living at home with my parents. I can only do that because I didn’t live at home with my parents, and they let me save money.
Charlie Hoehn: I was going to guess you’ve probably handled at least at this point about a billion dollars in loans. That’s amazing.
Angela Calla: It is incredible, at my age it really is incredible.
Charlie Hoehn: Tell me your favorite success story of a client that you’ve been able to help.
Angela Calla: Becoming a mother has opened up the side of vulnerability to me that I never knew was actually a reality. Before I had kids, I was this like, “Oh I don’t know if I am going to have kids. Career first.”
I’ve managed to continue to grow my business while having two young kids, and I will never forget the time that I started bawling my eyes out in front of these clients.
Those were the sweetest clients ever, and they lived just in the neighboring municipality in Maple Bridge. I am going to try not to cry on the air because I do get emotional when I talk about children. But these grandparents were talking care of their granddaughter because the parents were killed in a car accident.
And the granddaughter had a childhood cancer and the family wasn’t as financially prepared to all the additional care that the children needed. The grandparents had to stop working early to be able to take the granddaughter to appointments, and they also had to deal with burying their own daughter, which I could never imagine that having to do.
We had gotten them a mortgage and we had saved them about $1,700 a month as a result to consolidating all of their debts that they had.
They were just crying, because they were in between appointments and they weren’t sure how long the granddaughter was going to live because they just got a super bad diagnosis. Usually, it is a really exciting moment in my office when we save someone $1,700 a month, but for me, it was just super emotional.
I was really happy to do it but I was just a babbling cry ball and they were crying and we were all kind of like hugging and crying. It was an absolute honor to save them that kind of money because I knew the stress and the family that they’ve gotten through.
To have that ability to save them that kind of money just to give them a little breathe of fresh air from all the heaviness that they had to deal with always just really reignites my passion and just makes me feel like I have a purpose here.
“What I’m doing changes lives and helps people through really difficult times.”
This is the kind of unfortunate circumstance—and I shouldn’t say unfortunate because there are so many blessings that this family did have. At least they had loving grandparents and they had this beautiful granddaughter. But there’s too many layers of craziness in there that just makes me an emotional mess.
That’s why the Charlene Reaveley Foundation, which is one of the foundations that the money for the book is going for, actually helps family members where children’s parents have died in car accidents or whatnot because that’s exactly what happened to that family.
They created a charity out of this where they provide financial support, counseling, summer camps, anniversaries to families and they are integrated with Eagle Ridge Hospital. So if Eagle Ridge Hospital has handled an incident like that, that is one of the support networks that they automatically go to.
And so that was part of my decision making process. Every charity that is receiving proceeds from this book on their year, those are my clients and their life experiences and learning about how to help them and being able to tie those charities in and to add an additional layer that I can’t do because I don’t have those resources.
I don’t have medical resources to be able to give this people. All I can do is help them save money on their mortgage. But it is important to me.
I wish I could do more for people, so I am always looking at how can I make my contribution and my legacy matter and how I can demonstrate more care than just doing my job.
A Challenge from Angela Calla
Charlie Hoehn: I’ve got two more quick questions for you. The first one is what is the best way for our listeners to connect with you and follow you if you want them to do that?
Angela Calla: I would say go to my website, angelacalla.ca, send me an email, [email protected]. I’ve got The Mortgage Code Facebook page. I’ve got the Angela Calla Mortgage Team Facebook page and all of my other social media links are all there and I’d love to hear your feedback on the book.
Charlie Hoehn: Beautiful and the final question is, give our listeners a challenge. What is the one thing they can do from your book this week that will have a positive impact?
Angela Calla: I would say take your mortgage document out, review it, take a picture and email it to us. Let’s make sure that you’re maximizing your opportunities.
Because again, this is not instant-pot cooking. If your mortgage is not being reviewed, you are losing money, losing opportunities, not maximizing your options.
Mortgage is not something that you just get and then that’s it. It needs to be proactively managed, and that I believe has been the key to our continual success and our client’s success, which is the most important aspect of this whole thing is we work so hard.
“I don’t know a single person that’s like, “I have so much time to spare.””
We are exhausted, wages are not going up, but the pace of life and everything is always more expensive. We are trying to be good parents and we are trying to go to work and we’re trying to spend time with our spouses and we are trying to live healthy lifestyles. We are trying to eat properly, we are trying to exercise.
Everything feels so heavy, but the easiest thing that you can do is align yourself with someone who cares.
Someone who is going to be proactive and work their best to continue to demonstrate to you how to get that mortgage working for you, because we know how hard we all work for the basic fundamental thing we all need—we all need to live somewhere.
So let’s get that working for you. Let’s make sure that you’re aligned with the right people who are going to take care of you and take that weight off your back.