Friday, February 8, 2019

Reading This Could Save You Money (How to Renew Your Mortgage in 5 Easy Steps)



If you have a mortgage, chances are unless you win a lottery (cha-ching $$$) you’ll be doing a mortgage renewal when your current term has finished.
While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.
So what is a mortgage renewal?
Mortgages are amortized* over a set term* which can vary from 1-10 years.
About 6 months before the end of your term, your current lender will suddenly become your “Best Friend” showering you with attention and trying to entice you with early renewal offers… Please, please, please Mortgage borrower, sign here on the dotted line to renew… it’s sooo easy!!
You have 3 options
  1. Sign and send back as is (don’t do it, really I mean it… don’t do it!!)
  2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
  3. Talk to your friendly neighbourhood Dominion Lending Centres Mortgage Professional and together we can discuss the best options available for your situation.
Lenders know that 80% of people will sign their renewal forms, because it’s easy. Banks & Lenders are a business and as such they want to make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get. Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home?
Yes, signing the renewal document is easy, however, it’s in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket… so its time to get to work!
5 steps to save you money on your mortgage renewal
  1. Receive the renewal offer from your current mortgage lender and examine immediately, which gives you enough time to make an informed decision.
  2. Do your research via the internet and phone calls to find out about current rates.
  3. Phone your current lender and negotiate!
  4. If your lender will not offer you a better rate then it’s time to move your mortgage. YES, you will have to complete a mortgage application and gather documentation, just like you did for your original mortgage.
  5. Take a look at your budget and see if you can increase the amount of your mortgage payments above the mandatory payments and save money by paying off your mortgage quicker.
    Your mortgage is one of your biggest expenses. For this reason, it is imperative to find the best interest rates and mortgage terms you possibly can.
As you can tell there is lots to discuss about mortgage renewals.
To save money, call a DLC mortgage broker to help you shop your mortgage around at renewal time.

Wednesday, February 6, 2019

Why can’t you port your mortgage?



Policies are always changing, and when you port a mortgage, a FULL application must be approved and completely underwritten with full, credit, income, property and policy review.
It’s a mistake to believe that just because you already had a mortgage, you will easily get a new one. Policies and rates are changing rapidly and you need a strategy to stay informed. SO BEFORE you consider a move, understand the worst case scenario of what you qualify for without porting your mortgage so you avoid disappointment of falling into the 70% of people that don’t end up porting. Mortgages can be made simple, when you are empowered with relevant information relating to the current market and your life stage. Depending on those factors, you might be happy to get rid of your old mortgage and get in with the new! We have a mortgage for that, and can help. On average less than 3% of mortgages are portable.
Let me list a few of the reasons why
1. Dates– most lenders have a different policy on the dates that will allow to port the mortgage; it can be weeks or months. Your closing date will determine that.
2. Amortization– porting a mortgage means you port the same amortization, so if you are moving up the property ladder, that may mean your payments are significantly increased making it less affordable or meaning you can’t qualify with your income.
3. Amounts– some have a 10% variance limit up or down, where the penalty will trigger or it’s no longer a fit within the policy.
4. Change in credit– depending on the credit score and outside debts you have will determine if you still fit the credit profile your previous mortgage had.
5. Income– if there has been a change in your income type or amount this will also impact the options.
6. Property type– some lenders only lend on single-family homes, or a particular zoning, or don’t do private sales- even if they did when you originally got your mortgage with them.
7. Rate– maybe the change in rates either way of the product type you took doesn’t allow for a port due to one or a few of the combined factors. For example, going from insured to uninsured comes with different policies.
8. Product– maybe the product you had no longer exists for your particular profile.
9. Inspections – maybe the lender approved it initially but after your inspection just as you wanted a reduction in price, they decide they are no longer going to lend on it or decide it doesn’t fit the profile or they wont do it under that program ( instead you need a purchase plus improvements or a hold back they may or may not participate in and maybe want a different fix that you or a strata council agree on.)
10. Bridge – if you want to buy before you sell, all the above factors come into play. Maybe the original lender doesn’t allow the length of time you need, there cost to bridge is much higher, or maybe they don’t approve that portion of the loan, which puts you back at square one.
Purchasing a home is complex, with many moving parts and needs to be understood as such. When you have an experienced Dominion Lending Centres mortgage broker by your side while lots of things can come up, we can guide you through what is best for your family, which is why we encourage you to be educated, and empowered so you are ready for your next part of your ownership journey.

Contact Amy Wilson
780-919-0475
amy@yourmortgagegirl.ca



Tuesday, January 29, 2019

First Time Home Buyers

First Time Home Buyers


Your First Home. What a THRILLING thing that is to think about!! One of the best parts about my job is help individuals purchase their first home. We know that the process can seem daunting at first, but I have an in-depth understanding and knowledge of what steps are required to make the process go smoothly. Follow these and you will be turning the key into your new home before you know it.
1. Find a Fantastic Mortgage Broker - Amy Wilson
Finding a mortgage broker who can help with your pre-approval process can allow you to determine the price point of a home you can really afford. Finding a mortgage broker right off the bat can also give you an advantage over working with your bank:
  • Mortgage Brokers work for you, not the bank or lender
  • They have access to multiple lenders and are not limited to one single product
  • They are an expert in the field. They focus on mortgages and mortgages alone!
2. Get Comfortable With The Numbers
There are two numbers that all first-time homebuyers should keep in mind: 39 and 44. These two numbers can help you budget and determine what you can truly afford when looking to purchase a home. Why 39 and 44? Here’s why:
  • A maximum of 39% of your total income can go towards your housing costs. This will cover your mortgage payment, property tax payment and heating costs.
  • A maximum of 44% of your total income can go towards your housing costs and total debt payments. This will include ALL housing costs and all debt repayments (credit cards, car loans, student loans, etc.)

3. Know What Your Down Payment Needs to Be
You know the numbers, now let’s look at what you need to know about the down payment itself. First, if you have less than 20% down payment, your mortgage will be insured and have insurance premiums added to your mortgage. If you are considering putting the minimum down, that would be 5% if the property is worth $500,000 or less. A down payment of 10% is required for any amount over $500,000. Here’s a quick example of what this looks like:
Purchase Price of $600,000
5% of $500,000                                               $25,000
10% of $100,000                                             $10,000
Total Down Payment:                                   $35,000
4. Take Advantage of The RRSP Home Buyers Plan
The Canadian government’s Home Buyers’ Plan (HBP) allows for first time home buyers to borrow up to $25,000 from you RRSP for a d own payment, tax-free! You are able to combine this with your partner if you are both first time home buyers you can both access the $25,000 from your RRSP for a combined total of $50,000. Certain qualifications do apply for you to use this plan.
5. Don’t Forget About the Closing Costs!
This is one so many people overlook! Closing costs are something that can add up quickly when you are purchasing a home. Here is an approximate breakdown of the funds you will need:
  • Legal Costs: $1000
  • Title Insurance: $200
  • Appraisal: $350
An additional few facts on property tax for you to consider:

This is an approximation of what your closing costs may be, but it is always good to budget for them beforehand.
6. Have your Documents Ready to Roll
Mortgages = paperwork! There are a number of documents that you will need to have to give to your mortgage broker. This will vary depending on your employment situation and where your down payment is coming from, but here is a general list you can follow:
  • Most Recent paystub
  • Letter of Employment
  • NOA’s (2 years)
  • T4’s (2 years)
  • Down payment verification—up to 3 months of bank statements
  • Contract of Purchase and Sale (Your realtor will provide this)
  • Property Disclosure Statement (Realtor will provide)
  • if you are self-employed you may also have to show:
    o T1 Generals
    o Articles of Incorporation
    o Financial Statements
7. Start Working on Your Credit Score
Yes, your credit score does directly impact your ability to get a mortgage. Lender’s want to see that you can responsibly manage credit and debt repayment before loaning you a large sum of money to purchase a home. Your credit score will be a determining factor in the terms and rate associated with your mortgage.
Just what impacts your credit score? Good question! Here are a few things:
  • Late payments will lower your score
  • Collections, judgements, consumer proposals, bankruptcy; this will lower your score
  • Exceeded limits on credit cards
  • Ideally, you will be able to show a minimum of 2 active and current trade lines
  • The longer your trade line is, the better increase in your score!
  • Lenders also like to see a minimum of $2,000 limit on your credit cards.
Understanding and using this knowledge can help make your first home buying experience a great one! Once you have gone through the pre-approval process with a mortgage broker the fun part begins! Upon you receiving your preapproval, you can begin the house hunting. From there, you can put an offer on your dream home (yay!) Once your offer is accepted, we go through the mortgage process with you and then it’s moving day for you!
This is an exciting time for first time homebuyers—I enjoy getting to help my clients go from start to finish and help them get the keys to their first ever home. If you have questions or are looking to find out just how much you will qualify for you can contact Amy Wilson direct at 780-919-0475 or amy@yourmortgagegirl.ca.

Thank-you Geoff Lee from DLC for this article.



Wednesday, January 23, 2019

Question:Do I need to get Pre Approved for a mortgage?


Mortgage Questions answered:  

A few times a week, I like to post a question I have got from my current clients and post it here with an answer:

Question: Do I need to get Pre-Approved for a mortgage?

Short Answer:  YES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!  I can't stress it enough, YES, YES, YES!

I work with new clients every week and a large percentage are shopping for homes or have written an offer to purchase on a home and don't know what they are pre approved for.

YIKES.... put on the brakes - the first steps to purchasing a home should always be a proper pre approval from Amy Wilson, yourmortgagegirl!

There are many different types of mortgages available that come with different rates and rate holds.  Each mortgage product varies from the amount of money needed down to the qualifying debt to income ratios.

Income comes in all varieties, casual, part time, full time hourly, full time salary, commission, commission plus hourly, retirement, self employment, contract, disability etc.  Lenders qualify your income differently depending on how you earn your income.  In a pre approval you will provide paperwork to your broker to determine how much income can be used to qualify for your home purchase.

Down Payment has specific paperwork requirements tied to it, that can hold up an approval or funding, better to find out before you go home shopping!

Many of my clients are getting declined to purchase a home they have all ready emotionally attached to because they didn't get the pre approval first - Pre approvals will eliminate disappointment!

Some lenders will give you a predication of how much you qualify for based on a paystub and answering a few questions, I strongly recommend you don't use this method.

Take the time to do a mortgage application
 with Amy Wilson, yourmortgagegirl and provide paperwork so you can be confident when you go to buy a home.

Time frame - you should get pre approved as soon as you are even thinking of buying a home - why?

1. Confidence when you start shopping, you won't face disappointment of the unknown credit check.
2. You have a set Pre Approval amount, so it helps you stay on track for a price range to shop in
3. Correct Potential Credit Problems: If you credit issues that need to be fixed, we can address them prior to a looming deadline.
4.You will have a strong understanding of all the costs to purchasing your home or moving your mortgage to a new lender
5.If there were multiple offers, you will be ahead of the other offers as your pre approval is in place, no pressure deadlines.
6. Once you make an offer on a home, you can get an approval quicker with no hassles or surprises, reducing stress!





Contact Amy Wilson for your pre approval today
p: 780-919-0475
f: 780-640-1243
e: amy@yourmortgagegirl.ca
w:website





Tuesday, January 22, 2019

Self Employed - Must read before you apply for a mortgage

7 things every self-employed individual should know — Before you apply for a mortgage


Self-employed individuals are quickly becoming one of the most common clients that we handle. Daily we have successful business owners come into our offices who enjoy the perks of being an entrepreneur. One of these includes fantastic write-offs that allow them to bring their income down to a low tax bracket.
However, this benefit can also mean that the same business owner may have a hard time qualifying for a mortgage all because their income is significantly reduced on paper… how frustrating ‘eh? But these savvy business owners know that there is advanced planning that is involved in being able to qualify for conventional financing. Back in 2015, Statistics Canada reported that there were about 2.7 million people self-employed in Canada… which is an astounding 14% of the total population of Canada! What does that stat mean? Two things:
1. That being self-employed is a more than viable way of earning income in today’s world.
2. That 14% may not fit into the conventional lending “box”
The Conventional Lending Box
To fit into this box, self-employed individuals must meet certain qualifications. For example, they must be able to provide:
>Two most recent years of personal tax returns
>Two most current years Notice of Assessments
>Two most current years financial statements
>Statement of Bank Account Activity
>Investment Income Statement
>Photo ID
Now, the one area that raises a red flag in the above is the tax returns. As we previously mentioned, their income claimed on the return itself might be significantly different than their actual income. Tax deductions related to business often reflect meals, rental spaces, credit card interest etc. The result is that the income the self-employed business owner shows on their tax return is a significantly lower figure than what their actual take home pay is. However, the conventional lending box requires income to justify the mortgage. So how do we pull this off?
The Unconventional Lending Box
Now please keep in mind that “unconventional” in this box just means that as a self-employed individua,l you are going to work with a Mortgage Broker to find an alternative to allow you to show that you can justify the mortgage. There are several well-known and consistently used pieces of advice that we would like to pass along to you:
1. If you are organized and planning (think 2 years out) you can plan to write off fewer expenses in the two years leading up to the property purchase. Yes, you will pay more personal taxes. However, your income will be higher, and it will be easier to qualify you for the mortgage amount you are seeking.
2. Set up your finances through a certified accountant. Many lenders want to see self-employed income submitted through a professional rather than doing it yourself. The truth is that the time you spend doing your own taxes will not be nearly as efficient both financially and time-wise as a professional. Make sure that you discuss with them what your goals are so that they can set up your taxes properly for you!
3. Choose your timing carefully. If you are leaving for an extended holiday within the two years before purchasing, your two-year average income may fluctuate. Plan your vacations and extended trips away with income in mind.
4. Consider using Stated Income. You have the option to state your income. This is based on you being in the same profession for 2+ years before being self-employed. The lender looks at the industry and researches the mean income of someone in that profession and with your experience. You will be required to provide additional documents such as bank statements, showing consistent deposits and other documentation may be asked of you to show your income.
5. Avoid Bankruptcy at all cost…. or if you do declare bankruptcy have all your discharge papers on hand to present to the lender and ensure you have two years of re-established your credit.
6. Mortgage Brokers can state income with lenders at the best discounted rates. But if you do not qualify with A lenders using stated income, then a broker will work with you to utilize a B Lender who are more lenient but may come with higher interest rates and applicable lending and broker fees.
7. Last but not least, if A or B lenders don’t fit, private financing can be looked at as an alternative option in order to get you into the market and offer a short-term solution to improve credit or top up your reporting income. Then you and your broker can refinance into an A or B lender at that time. Just keep in mind that private lending will have a higher rate associated with it , with lender and broker fees added on as well, if you choose to go with this option.
So, to all of our self-employed, hard-working, determined individuals, take heart! You can qualify for the mortgage you want, it just takes a little more planning to get everything in order. Keep in mind to that every lender has different guidelines as to how they view self-employment. 

Thanks Geoff Lee from DLC Vancouver for this blog post!


Amy Wilson -- 780-919-0475, amy@yourmortgagegirl.ca

Wednesday, January 16, 2019

New year, new ways to manage that holiday debt!

New year, new ways to manage that holiday debt!


I hope your holidays were spent warm, safe and in the company of family and loved ones. I also hope that you’re not drowning from all the holiday purchases such as the dinners, the appetizers, the gifts, the gift cards, the drinks, the party favors – shall I continue?
It is expected that most people will spend over their budget during the holiday season. In fact, Canadian consumers spent 3.7% higher than they did last year. According to PwC, Canadians spent, on average, $1,563 each on consumer products this holiday season.
Are you among that group who spent 3.7% higher than last year? Not too worry, I get your generosity and as always, I am here to help you during this NORMAL time period of financial anxiety and discomfort.
Once again, we’re all in this together. You are not alone in your debt situation no matter how high or how low.
My first suggestion is to put those credit cards on ice and leave them for a while. Cut out the temptations completely and focus only on the necessary transactions including home utilities, car insurance, mortgage, etc.
This extra money can be put aside and stored in your savings for multiple reasons. It is important that you DO NOT SPEND this lump sum of cash on clothes, electronics, or big-ticket items. Just because this money is readily available to you – doesn’t mean it should be spent on materialistic items.
Don’t know what to do with that extra cash and want to make good use of it? Direct this money towards credit card debt (this one is important!!) or perhaps a “nest egg” before a move across the country, retirement, whatever suits you best.
I highly suggest not letting that holiday debt get the best of you by addressing it first and foremost. Do not let this debt slide under the radar and come back mid-year with more debt racked on top of it. Trust us! Addressing your Christmas dues now will make the rest of your financial year reasonably better without having those regrettable thoughts about giving your gifts to your families.
Since it is the beginning of January and new year resolutions are [hopefully] still fresh in people’s minds, make it your 2019 goal to create a monthly spending plan. Setting up a budget will put an end to bad spending habits and increased debt if you take your budget seriously as well as make realistic changes that are suitable to your current lifestyle.
Having a financial plan will force you to look at the numbers and assess your spending. You may be very surprised by the amount of money you are currently using towards just a simple cup of coffee on the way to work.
If you have questions as to how to get started, here is a link to the 10 Basic Steps provided by Smart About Money that takes you through your motivations about your money, how you would like to utilize your money and how to put your budget into action.
Lastly, and this tip is easy, if you already have one or two credit cards that are racking up debt – do NOT apply for a new credit card. We assure you handling one monster at a time is better than taking on multiple beasts.
If you have any questions or concerns as to how you should be spending your money on your mortgage, contact Amy Wilson, 780-919-0475 or amy@yourmortgagegirl.ca.

Thank-you  Chris Cabel with accredit mortgage Professional