Published Aug 25, 2008Rick Moran (www.rickmoran.ca) has over 20 years experience and is part of a select group of Mortgage Professionals in Canada that hold an Accredited Mortgage Professional designation. He has worked with a number of arts and media professionals and as a regular guest on CFRB 1010 AM radio Toronto, Rick has assisted thousands of listeners with their financial questions.
Do musicians have particular issues when it comes to getting into the real estate market?
What I have found is that anybody whos young and/or struggling at all seem to be of the same mind, which is "I will never be able to buy a house or qualify for a mortgage. That is in fact 90 percent of the time just not the case. I specialize in self-employed people who have had a decent past credit history and who are self-employed and that transfers instantly to the music industry and the arts.
What should young artists think abut to get on the right path?
Its very important that they establish a credit history thats healthy and on an ongoing basis make some sort of plan to budget to buy real estate. I am a firm believer in investing and to take it a step further, invest your money in real estate.
What are the chief obstacles for musicians who dont think they can do it?
Its education, it really is. To give you an example: the mortgage brokerage industry in Canada has become very much not fee-generated. We used to charge fees in order to place mortgages on peoples behalf. Today the industry has morphed greatly, and our compensation for the most part is done with AAA business being given to some 50 lenders in Canada who pay us a commission for placing a mortgage with them. In most cases if you have good credit history and you have a good go to the bank deal, there will be no charge from the mortgage broker. My best interest rate will be much better than what their banks rate is, and over a five-year term its monster money. So the message is, we are able to do much better without it costing you any money to do it. The challenge is getting this message out to the entertainment industry: we are professionals with a very good understanding of how credit works and will not hesitate to spend our time providing advice or counselling to help people get where they should be. And its firmly my belief that everyone should own a piece of real estate.
It would make our country much healthier and make the general population much happier. There comes with ownership of real estate a level of pride that a renter will ever have. Its much more than just having it for your retirement. As long as it is possible to access your day-to-day world, find something in your price range that is accessible somehow. Buying properties jointly [with band members] is not a bad idea, and theres no reason why that couldnt be done. You have to start somewhere.