Mortgage financing is bizarrely complex

By Bruce Firestone | Uncategorized

Oct 13

A client of ours wrote to us complaining about the complexity of arranging a mortgage for his new home. 

It’s true–mortgage financing today is a disappointingly complicated minefield.

His situation was made more complex because he was unable to sell his home in a small eastern Ontario town so he kept it as a rental instead, and he sought separate financing for his move to Ottawa.

It all got done but took longer and he paid more fees than he wanted to… 

In response to his concerns with financing, this is what I wrote:

Jay (not his real name), I
understand and share your frustrations. I had my mortgage broker license (in addition to my realtor one) and I
actually gave it back

a few years ago. 


Because financing is too complicated a field for a simple person
like me. Really.

I have found that
complexity is the enemy of success so I try to keep my life (as Einstein once
said), “As simple as possible, but no simpler.”

Hey, do you want to know the quickest way to get poor? Get a divorce. That’ll not only complicate your life and the life of everyone you care about around you, it’ll make you poor in a New York minute. But I digress.

Your mortgage broker is
a young person but I do trust him. Is her perfect? No. Can he improve? Yes. But
frankly, so can I.

We will


do our
very best to make it possible for you to build a high quality real estate investment portfolio that
will support you, and your family not only in this generation but for two more
after that.

Beyond three
generations no one can really be sure of anything but the position of “Duke of Westminster” is now onto its 7th version (they started in 1740) so that is something to
aim for.

Is it easy to do?
No. That’s why not everyone is doing this. It takes work, effort, luck, smarts
and time.

Read this about Equity Lords if you have time:

Lastly, I do have a
different view of financing than just about anyone I know. 

I believe we (you,
me, all of us) can get decent cap rates of around 6% pa and achieve IRRs (internal rates of
return) of around 24% or higher via real estate investing in Ottawa. 

numbers like that, I greatly appreciate the fact that people are willing
to lend me money at 3%, 4% and 6%. 

When I had to restart my career 10 years ago
after the Ottawa Senators went bankrupt, I don’t want to tell you the rates I borrowed at
to rebuild my personal portfolio. The idea was to buy well-located property at a fair price, animate it, differentiate it, manage it, drive up its value and then refinance it at more reasonable rates.

I’ve worked every single day for the last decade. Every single
freaking day.

I also had a lot of help along the way from many, many people… so I didn’t do it all on my own. 

But like I said above, I am grateful that there are any investors and lenders who will back entrepreneurs like us almost at any price.

Somehow it all worked out.

But as far as financing is concerned, I too use mortgage brokers who can navigate difficult channels and waters far more skillfully than I can, and I don’t mind paying them fees to do it for me. 

If someone offers to do something for me for free, I decline. In fact, I hate free stuff–I don’t want a free t-shirt for signing up for a new credit card, I don’t want a free month of Spotify, and I don’t collect airmiles. 

In my experience, everything that is “free” has strings attached and, basically, my sense is that, “You pays (one way or t’other) for what you gets.”

Excuse my bad grammar.

Here’s a typical negotiation I’ll have with one of my suppliers. This one happened with a web developer after I’d fired my last four (!) for poor performance.

“I can build you a new wordpress site for $1,500, no problem,” said Simon (not his real name).

“Ah, that’s not going to work for–” 

“OK, how about a $1,000?” he replied, interrupting me.

“If you’d let me finish, I was about to say, that’s not going to work for me. How about $3,000 instead?”


“Three grand.”

“Umm, sure. But, like, why would you offer me more than, like, I was asking for, not that I am saying no. In fact, I’m saying yes.”

“Because I don’t want it cheap; I want it right. I want it great. And one more thing…”


“I want your attention.”

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, Ottawa Senators founder, Real Estate Investment and Business coach, ROYAL LePAGE Performance Realty broker,  1-613-762-8884


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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.