First Time Home Buyers – Here are the Top 5 Questions you should ask yourself when you are starting to look for your new home.

Purchasing a new home and applying for a Mortgage can seem quite overwhelming even for the veteran home owner. Before I start the pre-approval process with my clients we always go over 5 key items to determine not only their goals but, their monthly budgets as well.

Here are a list of the first 5 topics I discuss with all my clients. I encourage you as a home buyer, new or expert purchaser, to ask yourself these questions too.

1. What do you feel your monthly budget is for your new home? This includes your mortgage payments and your monthly property tax payments. In this current real estate market where house prices may seem out of reach, it is important to keep in mind what you feel on a monthly basis, that you can afford for your new home. Deciding this up front is a great way to stay on track.

2. How long do you plan to be living in this home? Is this a starter home or is this a home you plan to retire in. Knowing where you will be in 3 – 5 years helps you and your mortgage broker to determine the proper term of your mortgage.

3. What is the amount of money you will require to purchase this home? For the majority of home buyers, the minimum down payment is 5% of the purchase price. In some scenarios, the minimum down payment is 10%. Over and above these costs, you must also consider closing costs. Typically for first time home buyers, budgeting an additional 1.5% of the purchase price for closing costs is a good estimate. For home buyers purchasing for a second or third time, I now tell my clients to budget 2% of the purchase price for closing costs.

4. Your credit score and bureau are an important factor when being approved for your new home. How would you rate your credit? Your ability and willingness to pay your credit card and loan debts is a deciding factor when a lender is considering approving your mortgage application. A minimum Beacon Score of 680 is typically required and at least 2 tradelines reporting in good standing for 24 months. There are always exceptions and a good Mortgage Broker can guide you in the right direction if you don’t quite meet this criteria.

5. How do you get started? Always look to the guidance and expertise of the professionals in the industry. Mortgage Brokers, Realtors, Home Inspectors and Lawyers. Ask a lot of questions! There is never a question to small or not in need of answer. Stick to your budget, no one enjoys being “House Poor” where the only entertainment is who is hosting Saturday Night Live this weekend. Finally, make a list of wants and needs and focus more on the “Needs” column when you are deciding on your dream home.

Good luck to everyone who is out there searching for their new home. In this ever changing market where Government influences are constantly effecting the horizon, I encourage you to seek out a Mortgage Broker. We want to help because really…..

It’s about more than just mortgages!

Using a Mortgage Broker When You Buy Your Home

What will a mortgage broker or agent do for you?

Getting a mortgage is often the largest financial commitment Ontarians make and many homebuyers find that there are several benefits to using a mortgage broker or mortgage agent. Mortgage brokers/agents provide options and information to guide consumers through the mortgage application process. Some lenders will only work through brokers or agents. 

What is a Mortgage Broker/Agent?

Mortgage brokers and agents are licensed professionals who work for a licensed mortgage brokerage and it is with the brokerage that you enter into a legal relationship. Mortgage brokers/agents can identify a large number of lenders and options for you, although many work directly with just one or two lenders.

Licensed mortgage brokerages and their agents and brokers can act on behalf of the lender, borrower or both. A borrower shopping for the best mortgage should first confirm with their prospective broker or agent that their role will be to act on their behalf. A licensed broker or agent is required by law to provide written disclosure to you about their relationship so that you can decide.

Depending on the type of license, the licensed professional you deal with may be a mortgage broker, or mortgage agent. Here, “mortgage broker” is used broadly to refer to either of these individuals.

Mortgage brokers:

• Look at your finances to determine the right type of mortgage product for you.
• Assess and compare proposed mortgages and determine if you meet the lender’s criteria and if the mortgage is suitable for you.
• Gather whatever information and documents are needed, and make sure all the paperwork is complete and submitted for the lender to approve.
• Negotiate with the lender regarding rate and term, liaise during the closing process, provide administration.
• They can also explain the application and approval process and answer any questions you may have, and review the rate, terms and conditions of the mortgage.

Working with a Mortgage Broker/Agent

From your initial meeting with a mortgage broker to the closing of the transaction, mortgage brokers are subject to a series of regulatory requirements as well as industry accepted practice standards.

Establishing the Relationship

Mortgage brokers are expected to ensure that you, the borrower, understand the relationship you are entering into with the mortgage broker and the services to be provided to you. Mortgage brokers should provide you with information about their role as well as other key aspects of the transaction.  The Financial Services Commission of Ontario (FSCO) recommends that you get this information up front so you have a good understanding of the mortgage broker’s/agent’s role, the fees that he or she will charge, the services that will be provided and the information that the mortgage broker/agent will need from you.

When entering into a relationship with a licensed mortgage agent or broker, this is the kind of information you should be asking of them:

• The nature of the broker-client relationship
• Who the broker represents in the transaction
• What information you will need to provide
• How that information will be used
• How the broker will be compensated
• The services the broker will provide
• What is expected from you
• Any applicable broker charges and fees

It is important to note that if your mortgage is for $400,000 or less, mortgage brokerages in Ontario cannot accept or require you to make an advance payment for any expenses or services that will be offered by the mortgage brokerage or one of its employees, until you sign your mortgage agreement or enter into a new mortgage renewal agreement.

Your mortgage broker may ask you to sign a written service agreement, which is the same as a borrower disclosure. Written service agreements are not mandatory in Ontario but if your broker provides one it will make clear the roles and obligations of the mortgage broker and client. 

Qualifying You for a Mortgage

Mortgage brokers need to obtain information from you in order to advise you of your mortgage option(s) and obtain approvals from lenders.

Providing Mortgage Options

Mortgage brokers are expected to provide you with option(s) that are appropriate and suitable to your circumstances based on an assessment of the lender, the mortgage, its structure, its features and its risks in light of the information you have provided on your needs and circumstances.  

The mortgage broker will also explain his or her rationale for the option(s) that have been identified, provide you with information that will assist you in determining whether you can afford the mortgage and give you material information on the nature, costs and the particular risks of the mortgage option(s) identified for you. This information will help you decide if the mortgage is right for you.

You may be asked to sign a written acknowledgement of the risks associated with the mortgage.

For further information on the risks related to obtaining a mortgage, please read Understand the Risks of Getting a Mortgage.

Submitting the Application

Mortgage brokers will assess and submit your information to the lender you select from their options for approval. For further information on the application process, please read The Mortgage Application.

The information your mortgage broker provides to the lender must reflect the decision you have made. It must be truthful and consistent with the information you have provided and must not leave out any required information.

Your mortgage broker must submit all the information to the lender in a timely manner. Providing the lender with this information at the proper time ensures they can make the appropriate decision regarding the mortgage.

Disclosures

Mortgage brokers must provide you with certain information to help you make an informed decision about your mortgage. Your mortgage broker will be required to provide you with disclosures that include information on the role of the mortgage broker, the risks of the mortgage, and any potential conflicts of interests.

• An estimate of the total cost of borrowing for the term of the mortgage must be provided to you. The total cost of the mortgage depends on the terms and conditions for paying it back, such as the interest rate, fees and the amount of time it takes to pay off the entire mortgage (i.e., the “amortization period”). The total cost can be more than the amount you are borrowing.

• In Ontario, mortgage brokerages, brokers and agents are required to disclose to you the material risks of your mortgage in writing and in a manner that is logical and likely to bring the matter to your attention.

• All disclosure provided to you must be timely. Providing you with the right information at the right time will help you make an informed decision. In Ontario, there is a minimum two day cooling off period, unless waived. Take the time to review the details of the mortgage.

• The information your mortgage broker provides to help you make a decision must not contain misrepresentations, untrue or misleading statements. The information provided should be accurate and clear.  If you do not understand any part of your mortgage transaction, you should ask your mortgage broker for clarification.

For further information on what licensed mortgage professionals are required to disclose, or what they cannot require you to do, please read Checklist – Working With a Mortgage Broker/Agent.

Documentation

Mortgage brokerages must securely maintain complete and accurate records related to every mortgage transaction (for at least six years after the expiry of the term/renewed term) in accordance with the Mortgage Brokerage, Lenders and Administrators Act, 2006 , and return any original documents you provided upon request.

Conflict of Interest

Mortgage brokerages, brokers and agents must ensure that actual or potential conflicts of interest in connection with the mortgage are disclosed in writing.

A conflict of interest occurs when the mortgage broker has an actual or perceived personal interest in the transaction.  That personal interest could influence the broker to provide advice to you that is in their interests, not yours.  

Many things can lead to a conflict of interest, including receiving fees or incentives from other parties in the transaction, being related to another party in the transaction, and acting as a lender or realtor in the transaction.

Mortgage brokers must disclose conflicts of interest and should not place their own interests above the interests of their clients. If the mortgage broker is only representing you in the transaction, he or she has to place your interests first. If you feel that any advice, options or recommendations provided by your broker are not based on your interests, for example that the broker has received an incentive, call the Financial Services Commission of Ontario (FSCO) at (416) 250-7250 or toll free at 1-800-668-0128 and ask for the Contact Centre.

How to find a licensed broker or agent

The Financial Services Commission of Ontario (FSCO) licenses mortgage brokers, agents, brokerages and administrators in Ontario. Licensed mortgage professionals have met specific education, experience and suitability requirements.

FSCO maintains a list of all licensed mortgage professionals who have been approved for Licensing under the Mortgage Brokerages, Lenders and Administrators Act (MBLAA). Further verification can be obtained by faxing 416-226-7838, Attention: Licensing & Market Conduct Division. Or, you may write to: Licensing & Market Conduct Division, Financial Services Commission of Ontario, 5160 Yonge Street, Box 85, Toronto, ON, M2N 6L9.

Before agreeing to work with a mortgage broker, you should ask these questions:

• Are you a licensed mortgage broker? If yes, capture the license number.
• Do you represent the borrower, the lender or both?
• Do I need to sign a contract?
• What services do you provide and how will you help me?
• Do you charge a fee? How will you be compensated?
• How many lenders do you work with? Was most of your business done through one lender last year?

If your mortgage broker has a service agreement (not mandatory in Ontario) be sure to read it and discuss the terms and conditions with him or her. It will help you understand the services the mortgage broker will provide and well as any fees, payments or possible reimbursements.

BIG CHANGES MEAN BIG OPPORTUNITIES It’s really how you embrace the change

As many of you may know, on Monday October 3, 2016 the wise and all-knowing Canadian Government dictated that they will be again be changing the horizon of the Canadian Housing Market.  These changes start to take place on Monday, October 17, 2016 and lending institutions have already begun enforcing the new guidelines. 

I attended a great meeting yesterday, with my colleagues where we had the opportunity to listen to some great industry professionals.  Chief Economist of Dominion Lending Centres, Dr. Sherry Cooper, representatives from Genworth Canada, Scotiabank, First National and many other professionals in our industry with a voice.  They made a lot of excellent points and they provided amazing insight that you are not going to get from the media.

First of all I truly believe this is a great opportunity for Home Buyers.  Especially in the next 3 – 6 months.  From my opportunities to listen to Benjamin Tal, Chief Economist for CIBC and Dr. Sherry Cooper, it appears these changes have come around to ‘slow down’ the housing market.  They want home prices to stabilize, they want to increase rates, they want to curb foreign investment, and they want to keep the Canadian dollar low. 

How will it really affect you as a home owner or home buyer?

Well, first of all, we all know that there are lots of buyers out there that just can’t afford to get into this market or are waiting until the market slows down.  If the market slows down, then best of all, there will be no more multiple offer situations!! Back to the good old days where after your realtor shows you half a dozen homes, you go in with a fair offer and insist on 5 days of financing. 

Secondly the market is going to slow down which they speculate will result in a 10-15% decrease in home prices.  This is similar to the Vancouver Housing Market.  That’s great news!!! All of those First Time Home Buyers will be able to get a nice home in the Peel Region under $500,000.00.  Better yet, lower home prices, will negate the impact of the new ‘stress test’ rules.  You won’t need an income of $90,000.00 to purchase that $450,000.00 home because now that home will be less than $400,000.00. 

Finally I urge you to consider those renovation projects.  For those individuals who have been sitting on the fence about selling; speculating that if they just wait another few months, their home will increase in value even more.   That is not going to be the case.  You need to get your home on the market now.  If you have debt to refinance now is the time.  If the government get’s what they are looking for, home prices will drop and rates will increase.  Now, more than ever, is the best time to get the most out of your investment at the lowest rates.  

I wanted to also take a moment to reiterate what the real changes are that may impact you in the immediate future:

1. October 17, 2016 – The three Default Insurers CMHC, Genworth and Canada Guaranty, will mandate that anyone with a down payment of less than 20% must qualify for their new mortgage under the Bank of Canada Qualifying Rate.  This is only a slight change as this has always been the case for clients wanting a term less than 5 years or a variable rate mortgage.  This may lower your buying power, but as I mentioned earlier, lower home prices are on the horizon.
2. There have been no additional changes by the Default Insurers to the rules pertaining to Beacon Score requirements, amortization and maximum insurable mortgage amounts.  These rules have been in place for over 2 years and in my opinion, did nothing to slow down the market at that time.
3. In an effort to minimize the ‘sweet’ deal that foreign investors have been realizing in the past years, an additional tax, likely in the form of a land transfer tax, will be enforced for all foreign investors.  To ensure that the purchase is compliant with the Canadian laws, all Canadian homeowners will be required to report the sale of their home on their income taxes.  The purpose of this is again to allow the government to tax foreign investors accordingly.  In the opinion of the mass yesterday, one family member, working or going to school in Canada, filing Canadian Income Taxes and living in that home, would eliminate exactly what the government is trying to enforce.
4. The Canadian Mortgage Industry as per the numbers from CMHC, Genworth and Canada Guaranty has a .28% default ratio.  I personally don’t know what the challenge is for the government.  The average First Time Home Buyer in my area, pays $16,200.00 for this insurance and Canada Globally has the lowest percentage of homes being taken back.  However, if they need to share the burden, it is speculated that lending institutions who insure their mortgages will be asked to take on 10 – 15% of the .28% expense. 

The other major change comes in on November 30, 2016 and affects the mono-line lenders which for a short period of time may limit the options that home owners have with refinancing their home and purchasing rental properties.  It won’t take long for organizations like First National, MCAP and Street Capital to bounce back and come up with a great business model that will mitigate these changes.

On a final note, it is an extremely valid to point out that 35% of Canadians choose to use Mortgage Brokers/Agents for their Mortgage options.  However, even with that large share of the market, not one industry professional was asked to comment or contribute to the decision that the Finance Minister announced at the beginning of this week.  Everyone, not just the consumer, was surprised by these announcements. 

We are not sitting back though and just letting the cards fall where they may.  Key Mortgage Professionals in our industry are lobbying to soften the blow.  Not to stop it, because we know the Government is not going to admit that they are wrong and definitely these changes are going to happen.  No, what these organizations such as Canadian Mortgage Broker Association, Dominion Lending Centres and Canadian Mortgage Professionals just to name a few, are working towards, are solutions to manage the impact.  Variables such as, a lower Qualifying Rate, extended amortizations, lower insurance premiums are being presented to the government.  Impact statements and analysis are making their way to Parliament Hill.  We have voices in this economy and they are definitely going to be heard. 

Change is inevitable and how we embrace change always makes the difference in our career, in our life and in our happiness. 

Tracey Brock

Mortgage Broker M09001257

Your home is your biggest asset and really, there is no place like home – especially yours. 

Today 51% of Canadians are carrying debt into their retirement.  91% of our Canadian Boomers have said that they want to stay in their home or neighbourhood and live independently as long as possible.

Oh, retirement.  It is almost a magical word and to some of us it seems unattainable. 

Worry no more!  There are smart, simple options for older Canadian Homeowners to enjoy the full value of their home into their retirement.   It is called a REVERSE MORTGAGE and it may be the perfect solution for you specific needs.

This program allows homeowners over the age of 55, income solutions that allow them to,

1. Manage when cash flow is less than they had planned.
2. Cover a major unexpected expense.
3. Help out their children without tapping into their savings or taking on additional monthly payments.
4. Even take out the money to purchase an investment property that earns them a monthly income. 

The possibilities are endless.

HIGHLIGHTS OF THE MORTGAGE

1. 1.       Regular mortgage payments are not required.
2. 2.       You will never be forced to move out or sell your home.
3. 3.       You have the ability to unlock up to 55% of your home value into cash
4. 4.       Confidently expect to still have equity in your home if you decide to sell.
5. 5.       All proceeds from your home are TAX FREE!

If you are a homeowner over the age of 55 who wants to find out how this TAX FREE solution can get you the extra money you need in your retirement contact me at TBrock@DominionLending.ca or call me direct at 416.788.6207.  

Changes to down payment requirements coming February 15, 2016

On February 15, 2016, the changes Finance Minister Bill Morneau has made to the minimum down payment for home purchases in Canada will officially come into effect. 

 The focus has been brought to homes in the price range of $500,000 and $999,999.00. 

 This is great news for most first time home buyers and means that for a home priced below $500,000.00 the minimum down payment requirement will remain at 5%!

 Homes priced at more than $1 million, purchased to rent or purchased as investment property will still require a minimum down payment of 20 per cent. No changes here either.

Where the changes occur is once you exceed that $500,000.00 threshold.  On the first $500,000.00 the minimum down payment remains at 5%.  Then the amount will increase from five per cent to 10 per cent for the portion of the house price above $500,000. Here is an example for you:

Mortgage Professionals Canada noted that the 10% requirement does represent a graduated approach while the Ministry of Finance commented that they believe this will only impact 1% of home purchasers. Keeping in mind this is 1% across Canada.  In the GTA, I believe this number would be significantly increased. 

The Fight Against Mortgage Fraud

The largest investment you and most Canadians will make in your life time will be the purchase of your own home.  Regardless if it is your first home or 4^th, you go to great lengths to ensure that you feel safe in your home.  You insure your home from damage and property theft.  You spend money upgrading and decorating our home.  You watch your family grow.  You…. we love our homes.  The challenge lately is our homes are becoming vulnerable to a new crime labeled Real Estate Fraud.  An easy process that in most cases is a silent crime or falls on silent ears.  

The two common types of Real Estate Fraud are Fraud for Shelter and Fraud for Profit. 

With Fraud for Shelter, the consumer typically does not qualify for the home they are trying to purchase.  They falsify documents.  They encourage other people to purchase for them.  They do not disclose the necessary information required for the lenders and insurers to make qualified decisions on affordability. 

These individuals are not ‘criminals’ in the traditional form.  They watch the news.  They see the glorification of crime in movies and media and their perception is, “Everyone Does it!”.   

It always amazes me how someone can rationalize what they do, how they act and what they say until they are able to justify it in their own minds.  Then they believe it and we all know, “if you believe, they will believe”. 

It is a declining value system that directly questions the ethics and personal characteristics of our society.  What’s worse, these generally good people are typically the individuals who fall prey to the real fraudsters out there looking for easy targets.

Fraud for Profit, which almost always happens without the knowledge of the homeowner, happens when fraudsters pose as legitimate owners of the home.  They place a mortgage on the home and then, walk away with the money.  It is only the knock on the door from the Sheriff’s office, when the real homeowner realizes they have been victim to a crime.  This type of fraud happens through the submission of forged documents to the lender or through identity theft. 

With Real Estate Fraud it is not only the victim that suffers the loss.  The entire community feels the impact of the deception.  Homes that are forced into foreclosure are bringing down the value in our neighbourhoods.  Lenders and Lending institutions raise costs and rates to recoup their losses.  Finally, the government bodies step in with stricter guidelines and rules making it more and more difficult for the honest, hard-working purchaser to qualify for a mortgage.  Everyone suffers and feels the impact.

As a professional Mortgage Broker, I strongly believe one of my obligations to my clients, is to protect the integrity of this industry that I love and live from.  Mortgage Fraud is becoming high on the radars of the Canadian regulatory bodies, and the environment is definitely changing.  Precedents set in Canadian Law are holding the lender responsible for mortgage fraud.  What does this mean to the consumer?  It means, the level of diligence from these lenders is rapidly increasing.  Documentation verifying employment, down payment and identity are being scrutinized meticulously.  More and more, mortgage brokers are finding that common sense lending is out the door. 

We all have legal and ethical responsibilities to tell the truth in everything we do in life.  We must obey the law and avoid willful blindness.  Safeguard the integrity of documents whether they be our own or those of our peers.  Finally, over and above the legal obligations, we need to strive to be better at our moral duties and report inappropriate behaviour.

With Real Estate Fraud everyone can be involved, from the client right up to the bank employee.  Lawyers, appraisers, mortgage brokers, realtors and employers everyone can have their hand in the crime.   

I went to an industry seminar last week and had the privilege to listen to a great speaker, Chris Mathers a former RCMP undercover officer.  I took many things away from his presentation but one of the items that stuck with me was the following statistics he gave out:

10% of the population is really, really good

10% of the populations is really, really bad

80% of the population just depends on how we can be influenced and corrupted.

 Don’t be a Victim – be an Informed Consumer. 

Spill the Beans –  Tell your mortgage broker all your details pertaining to your finances and employment.  Never allow someone to encourage you to include false information or leave blanks in your mortgage application.  

Know your Responsibilities – If you sign the mortgage documents, you are responsible for the mortgage debt for the life of that mortgage.  Even if the home sells, any shortfalls become your legal responsibility.

ILA – Independent Legal Advise – don’t buy a home without it! 

Timing is of the Essence – This will be one of largest purchases you are likely to make in your lifetime, what’s the hurry.   A strong, planned out approach, with realistic goals will ensure that you are never ‘house poor’, leaving the extra money for a vacation, new furniture, Date Night,  etc. 

Try, Try, Again – When you find your true dream home, you will see, everything falls into place.

Goals, are you being realistic? – Keep in mind, that the first home does not have to be your forever home.  Home is where the heart is not where the biggest house resides.

Use a Professional – Licensed and Accredited Mortgage Brokers and Realtors are educated professionals.  Know who you are working with and be sure to recommend the goods ones to your friends and family.

EASY MONEY – It simply doesn’t exist.  If someone offer’s you money to use your name and credit profile, this should be a red flag.  “The greater the obstacle, the more glory in overcoming it” Moliere.

Be Proactive – Annual checks on your Credit Bureau with Equifax and Transunion, shredding all legal documents, reviewing your bank statements, never giving out personal information on line will all aide in you not becoming the victim of a crime.  

Useful Links

www.equifax.ca

www.transunion.ca

Reporting Fraud

If you suspect that you or someone you know has been the victim of mortgage fraud, please contact your local police department or The Canadian Anti-Fraud Centre.

On-line: www.antifraudcentre-centreantifraude.ca
Toll Free: 1-888-495-8501
Toll Free Fax: 1-888-654-9426

10 Easy Tips to Follow Between Your Mortgage Approval and the Closing Date of Your New Home

You’re ready!  You have found your new dream home.  You have been approved for the mortgage and signed all of the paperwork.  All that is left to do, is to count down the days until you move in!  The excitement is overwhelming and all you want to do is start packing. 

Now while you are doing that, I would like to give you list of tips that will ensure that when that closing date comes, everything is in order with the mortgage approval. 

Sometimes, even the smallest adjustment in your life can have an impact on the approval.  In recent months there has been a tightening of credit underwriting standards by both lenders and mortgage default insurers, such as CMHC.  Now – more than ever – it’s important to be careful of what you do between the time your mortgage is approved and when your closing date arrives.

Here are a list of 10 tips to keep in mind while you are waiting for your closing date:

1. Don’t buy a new car or trade-up to a more expensive lease.  Those increased payments may affect your affordability for your new home.

2. Don’t quit your job or change jobs. Even if it’s a better-paying job, and/or in the same industry. You still are likely to be on a probationary period. Lenders mandate that you must be past your 90 day probationary period to accept the income from your new job.

3. Don’t decide to become self-employed or accept a contract position.   Even if it’s within the same industry.  This new endeavour falls under a different category with the lenders and will almost immediately 9 times out of 10 make your existing mortgage approval null and void.

    

4. Don’t transfer large sums of money between bank accounts.  Lenders get especially skittish about this one because it looks like you’re borrowing money or worse. Be ready to document cash transactions or money movements for a minimum of 90 days.

5. Don’t forget to pay your bills!  Even ones that you’re disputing. This can be a real deal-breaker. If the lender pulls your credit bureau prior to closing, which they are doing more often than not these days,  and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they will fund. You don’t want to have to scramble to pay off a debt at the last minute!

6. Don’t open new credit cards.  It’s tempting to want to get the new furniture, appliances etc that you amy need for your home.  Just wait, until after you move in before seeking any new forms of credit.

7. Don’t use your existing credit cards.  As with #6, this falls back to affordability with increased debt payment requirements.  It may result in you having to pay out the credit card in full prior to the closing.

8. Don’t accept a cash gift without properly documenting it.  Even if this is from proceeds of a wedding. Large deposits raise the same red flags as large transfers and should be avoided when possible.

9. Don’t buy furniture on the “Do not pay for XX years plan”.   Even though you don’t have to pay now, it will still be reported on your credit bureau, and it may become an issue.

10. Always call your Mortgage Broker if unexpected changes do occur.   Life happens and the best way to manage the change is to work with it as soon as it happens. 

There is never a question that is too small or not in need of an answer.  I welcome all questions and work with my clients to facilitate the best solutions to all challenges that may arise. 

Tracey Brock Mortgage Broker, Dominion Lending Centres.

Monday, April-28-14

Changes are on the Horizon again with CMHC

As many of you may know on May 1, 2014 all Default Insurance Premiums will be increasing.  This was initiated by CMHC but both Genworth and Canada Guaranty will stay in-line with the CMHC guidelines.

 As of May 30, 2014 there will be additional changes that come into play.

1.  CMHC will be dropping their Business for Self, less than 2 years, stated income program.

2.  CMHC will be discontinuing their Second Home Product

3.  CMHC will limit the availability of homeowner mortgage loan insurance to only one property per borrower/co-borrower at any given time

 At the moment, Genworth and Canada Guaranty have not opted to follow the lead of CMHC. 

 How this affects you the Consumer:

1.  Business-For-Self – If you have been self-employed for less than 2 years, the mortgage amount that you qualify for will be based on a 2 year average of your line 150 income on your Notice of Assessments.  On a positive note, using this qualified income you are able to utilize a down payment amount of 5% but, it will limit the amount of mortgage you will be able to qualify for.  Other options include a 10% down payment with an alternative lender that uses a self-insured program.  On a case per case basis, even with the higher rate for the one year, I have been finding that it is actually can be cheaper route to go.

2.  Second Homes – Borrowers will be required to put down a minimum of 20% towards the purchase of a cottage, home for their children or elderly parents, or other type of second home.  Again, at the moment, this only applies to CMHC and the other insurers have not currently changed their position on this.  As well, depending on the area, a second mortgage of up to 15% could facilitate this type of transaction.

3.  Single Property Insurance – This could affect anyone who would like to rent out their current home to purchase a new home and someone who may be co-signing or acting as a guarantor.  Again, at the moment,this is only a CMHC initiative.  There are other solutions for individuals finding this a challange and going forward we would be happy to demonstrate on a case per case basis. 

 For more information visit the CMHC Link direclty

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_024.cfm

and definitely feel free to contact my team at:

416 788 6207 or TBrock@DominionLending.ca

In today’s economic climate of tighter credit requirements and increased unemployment rates taking their toll on some Canadians, there’s no doubt that many people may not fit into the traditional banks’ financing boxes as easily as they may have just a year ago. 

Your best solution is to consult your mortgage professional to determine whether your situation can be quickly repaired or if you face a longer road to credit recovery. Either way, there are solutions to every problem.

As your Mortgage Broker I am an expert in the credit repair niche and can help credit challenged clients improve their situations via a number of routes. And if the situation is beyond my expertise, I will help you get in touch with other professionals, including credit counsellors and bankruptcy trustees.

 If you have some equity built up in your home and still have a manageable credit score, for instance, you can often refinance your mortgage and use that money to pay off high-interest credit card debt. By clearing up this debt, you are freeing up more cash flow each month.

 In the current lending environment, with interest rates at an all-time low, now is an ideal time for you to refinance your mortgage and possibly save thousands of dollars per year, enabling you to pay more money per month towards the principal on your mortgage as opposed to the interest – which, in turn, can help build equity quicker.

Following are five steps you can use to help attain a speedy credit score boost:

 1) Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards so you’re only using 30% of your limits. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on.

 2) Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there is a balance at the end of the month, this affects your score – credit formulas don’t take into account the fact that you may have paid the balance off the next month.

 3) Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders may view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you.

 Some financial institutions don’t even report your maximum limits. As such, the credit bureau is left to only use the balance that’s on hand. The problem is, if you consistently charge the same amount each month – say $1,000 to $1,500 – it may appear to the credit-scoring agencies that you’re regularly maxing out your cards.

Don’t get stung by the Banks!  Call me today and I will help you get started.

The best bet is to pay your balances down or off before your statement periods close.

4) Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. You should use these cards periodically and then pay them off.

5) Don’t let mistakes build up. You should always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation.

If, however, you have repeatedly missed payments on your credit cards, you may not be in a situation where refinancing or quickly boosting your credit score will be possible. Depending on the severity of your situation – and the reasons behind the delinquencies, including job loss, divorce, illness, and so on – your Dominion Lending Centres mortgage professional can help you address the concerns through a variety of means and even refer you to other professionals to help get your credit situation in check.  

There are generally two ways to get a mortgage in Canada: From a bank, or from a licensed mortgage professional.

While a bank only offers the products from their particular institution, licensed mortgage professionals send millions of dollars in mortgage business each year to Canada’s largest banks, credit unions, and trust companies … offering their clients more choice, and access to hundreds of mortgage products!

As a result, clients benefit from the trust, confidence, and security of knowing they are getting the best mortgage for their needs.

Mortgage professionals work for you, and not the banks; therefore, they work in your best interest. From the first consultation to the signing of your mortgage, their services are free. A fee is charged only for the most challenging credit solutions, and it’s especially under those circumstances that a mortgage professional can do for you what your bank cannot.

Whether you’re purchasing a home for the first time, taking out equity from your home for investment or pleasure, or your current mortgage is simply up for renewal, it’s important that you are making an educated buying decision with professional unbiased advice.

Don’t get Stung by the Banks!