13 Jun

Reason #1 To Consult a Mortgage Broker

General

Posted by: Sarah Boudreau

Reason #1. Unbiased Advice

Mortgage Brokers are industry professionals that provide free, independent financial advice. It doesn’t cost you a cent to call us for professional advice or a second opinion. In most cases, purchasing a home is the largest investment you will make, and it is critical that you understand the details of the financial options available to you before you sign away. Mortgage Brokers are licensed to specifically deal in mortgages, and we are regulated by provincial and national government bodies. Your mortgage is our specialty. We don’t need to sell you a chequing account, or a car loan, and we won’t be transferred to a new department in 6 months. We do mortgage planning, and we do it at no cost at all to you, in most cases, as we are paid by the lender that we match you with.

Shawn Stillman said it well in a Home In Focus magazine interview:

“In no other industry can investors get financial advice for which they don’t have to pay. In the mortgage industry, the lender pays for it. It doesn’t cost the investors anything to get a second opinion. Brokers get paid by the lender, so it doesn’t cost the client anything to use a broker’s services. From start to finish, investors get impartial advice with multiple options and it’s free, so why would you not go ahead and do that? 

If you look at most of the mistakes that investors make, they occur because the investor didn’t have enough information. Especially when you’re investing, it’s critical to know everything before making the final call; that means looking at the little details that help point investors in the right direction.”  Home In Focus: Canadian Mortgage Environment, March 30th 2017.

As always, let me know if you have any questions or concerns.

Sarah

7 Jun

Your Mortgage: 10 Reasons to use a Mortgage Broker

General

Posted by: Sarah Boudreau

 

  1. Unbiased Advice. Mortgage Brokers are industry professionals that provide free, independent financial advice. It doesn’t cost you a dime to call us for professional advice or a second opinion.

  2. Trust. We work for you. We are paid on commission, only when you are satisfied with our product offering and the deal is done.

  3. Availability. We don’t keep “banker’s hours”. We are always only a phone call or an email away.

  4. Expertise. Getting your financing approved to its fullest potential.

  5. Negotiation. A good mortgage broker is also a savvy negotiator. We represent you to negotiate best terms, conditions, and rates.

  6. Options, Options, Options. Who doesn’t like options? A good broker has a variety of lenders and products to suit your needs.

  7.  A-B-C Mortgage Solutions. Not everyone has a perfect application for an “A” mortgage product. Many people, for a variety of reasons, will need the option of alternative or private lending.

  8.  Reading the Fine Print. We make sure you understand it.

  9.  Ongoing Service Commitment. You are our client for the life of the mortgage!

  10.  $$$$ Money$$$$! Yes we have extremely competitive rates! We can save you money!

Each week, for the next 10 weeks, I am going to be elaborating on each point! Please stay tuned, and as always, do not hesitate to call or email if you have any questions!

Sarah

 

 

31 May

Purchase Plus Improvements

General

Posted by: Sarah Boudreau

Turn the HOUSE you LIKE into the HOME you will LOVE.

Government restrictions on refinance guidelines have reduced the equity homeowners can access for renovations. High ratio buyers especially, in a flat market, may wait years before the house has appreciated enough that an 80% LTV refinance provides any money. If home buyers want to do upgrades, the time of purchase may be the only opportunity, for years they can add the cost of the renovations to the mortgage.

Use the Purchase plus Improvements to:

• Add a new or updated kitchen
• Develop the basement for more living space or visiting friends & relatives
• Update or replace the carpeting or maybe adding hardwood
• Add a garage or workroom
• Add a media room or “man cave”
• A new additional bathroom with maybe a jetted tub
• A new roof
• A more efficient central air or furnace system
• Add new siding, eaves or fascia
• Replace or updating doors and windows
• Add major landscaping

If the property isn’t exactly what you want: renovate, add, or upgrade it!

There are specific requirements for the purchase plus improvements program, please call to learn the details. Exceptions to the generally understood parameters are available.  Renovating up front may be your buyers best option.

24 May

What Mortgage Insurance Means for You

General

Posted by: Sarah Boudreau

What Mortgage Insurance Means for You

Mortgage insurance is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. Mortgage insurance can be either public or private depending on the insurer. There are three mortgage insurers-Canada Mortgage and Housing (CMHC-public), Genworth (GE-private) and Canada Guaranty (CG-private). A purchase with less than 20% down payment will always require mortgage insurance, and at times a lender will require a purchase of 20% or more down payment to be insured.

CMHC:

100% backed by the government

  • Maximum $600 Billion in exposure across Canada

Genworth:

  • 90% backed by the government
  • Maximum $300 Billion in exposure across Canada

Canada Guaranty:

  • Canadian owned by the Ontario Teachers’ Pension Plan along with National Mortgage Guaranty Holdings. Previously owned by AIG
  • 90% backed by the government
  • Maximum $300 Billion Exposure

 

Insurer Guidelines and Restrictions:

CMHC:

  • CMHC will only allow one insured mortgage per person; this means a client who may have had a mortgage for 15 years that was originally insured through CMHC may not be able to co-sign for their children through CMHC if that mortgage has not since been refinanced to remove the original CMHC insurance.
  • CMHC does not insure mortgages for Rental Pool Buildings or where there is a high percentage of nonowner-occupied units
  • CMHC will not insure age-restricted buildings
  • CMHC will consider buildings with post-tension cables or condo conversions
  • Will not insure purchases $1,000,000 or higher
  • 25-year amortization only

Genworth & Canada Guaranty:

  • Both insurers will consider two insured mortgages, but the file must be very strong, and the properties must have good equity positions
  • Both will consider insuring age-restricted buildings
  • Neither insurer will consider insuring properties that have post tension cables
  • They will not insure in complexes involving rental pools or where there is a high percentage of nonowner-occupied units
  • Will not insure purchases $1,000,000 or higher
  • 25-year amortization only

 

As always, if you have any questions, let me know.

17 May

Another Variable Mortgage Rate Discounted by the Bank

General

Posted by: Sarah Boudreau

 

 Written by: Debra Carlson

A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest rates change. As a result, your payments will vary as well (as long as your payments are blended with principal and interest).

Fixed interest rate loans are loans in which the interest rate charged on loan will remain fixed for that loan’s entire term, no matter what market interest rates do. As a result, your payments remain the same over the entire term.

When a loan is fixed for its entire term, it remains at the then-prevailing market interest rate, plus or minus a spread that is unique to the borrower. Generally speaking, if interest rates are relatively low, but are about to increase, it could potentially be better to lock in your loan at that fixed rate. Depending on the terms of your agreement, your interest rate on the new loan will stay the same, even if interest rates climb to higher levels. On the other hand, if interest rates are on the decline, then it could be better to have a variable rate loan. As interest rates fall, so will the interest rate on your loan.

We are seeing variable rates being lowered due to slowing mortgage growth. 

Fixed Interest Rate or Variable Rate Loan?

This discussion is about comfort level, and flexibility to adjust to the changes in the economic market. The borrower must consider the amortization period of a loan as well. The longer the amortization period of a loan, the greater the impact a change in interest rates will have on your payments.

Adjustable-rate mortgages (ARM) are beneficial for a borrower in a decreasing interest rate environment, but when interest rates rise, then mortgage payments will rise sharply.

A good way to mitigate this is to take a Variable rate mortgage but set your payments higher than the minimum payment required. For example, Prime; Right now, prime is at 3.45%, but you can get a 5-year ARM at prime -1.09% (2.39%). If you were to take the ARM but set your payments at prime, you would be making 1.09% more in payments to your mortgage principle on day one. If prime were to rise or fall your payments would stay at 3.45%; you would just be making more or less extra payments against your mortgage principle. The only way your payments would change is if you chose to change them, or the Prime rate goes above 3.45+1.09% (prime rate would have to go to 4.54% for your payments to go up.)

 

10 May

An Inrcease the Benchmark Qualifying Rate- What does this mean for you?

General

Posted by: Sarah Boudreau

The Bank of Canada has increased the qualifying benchmark rate for mortgages to 5.34% effective immediately.  This is not the actual rate borrowers are offered but the rate used to qualify high ratio mortgages and other mortgages when the contract rate plus two per cent is not used.

In most cases, this means, at maximum debt service ratios a 2% smaller mortgage compared to the current 5.14% benchmark. It is important to understand the total mortgage amount offered a borrower can vary from lender to lender. Some lenders use different maximum debt service ratios. Some lenders will apply the old benchmark with existing pre-approvals. Some lenders are using the new benchmark even for existing pre-approvals.

We always work with you and your buyers to obtain the mortgage that suits their needs.

Contact me for details or strategies to get the biggest mortgage available.