Tuesday, August 29, 2017

Spousal Buyout Mortgage

Spousal Buyout Mortgage?

Spousal Buyout Mortgage?
If you happen to be going through, or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property in order to buyout your ex-spouse.
For most couples, their property is their largest asset and where the majority of their equity has been saved. In the case of a separation, it is possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.
Here are some common questions about the spousal buyout program:
  • Is a finalized separation agreement required?
Yes. In order to qualify, you will be required to provide the lender with a copy of the signed separation agreement. The details of asset allocation must be clearly outlined.
  • Can the net proceeds be used for home renovations or to pay out loans? 
No. The net proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly agreed upon in the finalized separation agreement.
  • What is the maximum amount that can be withdrawn?
The maximum equity that can be withdrawn is the amount agreed upon in the separation agreement to buy out the other owner’s share of property and/or to retire joint debts (if any), not to exceed 95% loan to value (LTV).
  • What is the maximum permitted LTV?
Max. LTV is the lesser of 95% or Remaining Mortgage + Equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV). The property must be the primary owner occupied residence.
  • Do all parties have to be on title?
Yes. All parties to the transaction have to be current registered owners on title. Solicitor is required to do a search of title to confirm.
  • Do the parties have to be a married or common law couple?
No. The current owners can be friends or siblings. This is considered on exception with insurer approval. In this case, as there won’t be a separation agreement, there is a standard clause that can be included in the purchase contract that outlines the buyout.
  • Is a full appraisal required?
Yes. When considering this type of a mortgage, it is similar to a private sale and a physical appraisal of the property is necessary.
If you have any questions about how a spousal buyout mortgage works, contact Amy Wilson for all your mortgage needs.   Be assured that our communication will be held in the strictest of confidence.

Thank-you  Michael from DLC for this article

Monday, August 21, 2017

Transferring your mortgage to another lender

Transferring to Another Lender

Just because you’ve received a renewal offer from your current lender, doesn’t mean you can’t get a better deal elsewhere.
As your mortgage specialist I can evaluate your mortgage needs and determine whether your current mortgage is still the best fit. We’ll also shop your renewal to many of Canada’s leading lenders to help find the deal you want.

Monday, July 31, 2017



Residential Mortgage Commentary - week of July 31, 2017

Jul 31, 2017
Be the expert
First National Financial LP

The Bank of Canada appears to have adopted the stance that any excuse to raise interest rates is a good excuse.  If that is true then the latest economic data puts us on track for another hike later this year.
The latest GDP numbers came in above forecast, bolstering the bank’s rosy contention that the economy is back on track.  Economic growth beat forecasts by 40 basis-points in May.  Real GDP growth clocked-in at 0.6%, compared to the 0.2% expectation.  All things considered Canada is on track for 3% growth this year.
Apart from household debt-loads and stalled wage growth, most of Canada’s economic concerns remain international.  Given the protectionist rhetoric and half-bake policy notions being tweeted out of the White House, and given that the full folly of Brexit has yet to reveal itself, the BoC can hardly be blamed for trying to give itself room for some future stimulus should the economic picture turn ugly.
The next rate setting is in September, but it is unlikely the central bank will move before October when it will update its economic forecast and its monetary policy report.

Thank-you First National Bank
Amy Wilson

Thursday, June 29, 2017

Stuck in your 10 year mortgage?

Stuck In a High Rate 10 Year Fixed Mortgage?

Stuck In a High Rate 10 Year Fixed Mortgage?With low rate offerings over the past several years and a struggling economy, some homeowners chose to lock into a longer term mortgage even if the interest rate was a bit higher. If you are one of those people who feel stuck in a high rate 10 year fixed mortgage you may be wondering if you have options. The answer is YES.

Let’s consider the case of Dan and Anita who own a home and refinanced their mortgage 8 years ago into a 10 year term. They wanted to consolidate their high interest credit cards and their mortgage into one lower monthly payment and be secure with that monthly payment for as long as possible.
The news was painting a picture of doom and they wanted to take advantage of the “record low” rate of 5.25% for 10 years. Over the past few years they have watched the shorter term rates for 5 year term mortgages continue to drop to under 3% and they feel they may have made a poor decision. But since they feel they are stuck in a high rate 10 year fixed mortgage with the potential of a high penalty to get out of the mortgage they have chosen to stick it out. The monthly payments are $1,644 which they can afford but the potential of payments at under 3% for the remaining 5 years would be $1,304 (based on the remaining amortization) which is hard to pass on.

A friend told them to talk to her mortgage broker to see what real options they had. After talking to the broker they learned the penalty for terminating a 10 year mortgage after 5 years is only 3 months interest or $1,200 in their case (and legal fee of about $600). Dan and Anita were stunned they had missed this in the fine print of their mortgage agreement. And to top if off this policy is determined by law and not by the lender. This was great news for the happy couple. The broker also ran numbers to show them how they could further take advantage of the lower interest rate and increase their monthly payments to pay off their mortgage faster.
By increasing the payment by 20% – which was still lower than what they were paying before and paying bi-weekly instead of monthly, they lowered their interest costs by $20,000 over the next 5 years and reduced their amortization from 25 years to 12 years!
The morale of this story is, if you are stuck in a high rate 10 year fixed mortgage and you are close to the 5 year mark, you should talk with me - yourmortgagegirl! and see what options you have to save yourself some money on your mortgage. What would you do with a savings of over $20,000?

Thank-you Pauline Tonkin for you article.

Monday, April 24, 2017



Do you have great credit, full time employment, but no down payment for a home saved?

 I can help arrange a loan or a line of credit, or we can use an existing one you have in place as your down payment.

 With all mortgages, you need to have at least a 5% down payment saved up. Don’t have it? Don’t worry.

This is a great way to take advantage of today's low interest rates without having to wait while you save up the down payment. The minimal amount of interest you would pay on the loan, compared to the potential higher difference in future interest rates and housing prices, puts you further ahead when you buy now.

Contact Amy Wilson, yourmortgagegirl today to find out how we can help you get into your dream home.

Monday, April 3, 2017

Monoline Lenders v.s. Banks and Credit Unions

Banks & Credit Unions vs Monoline Lenders

Banks & Credit Unions vs Monoline Lenders We are all familiar with the banks and local credit unions, but what are monoline lenders and why are they in the market?
Mono, meaning alone, single or one, these lenders simply provide a single yet refined service: to fulfill mortgage financing as requested. Banks and credit unions, on the other hand, offer an array of other products and services as well as mortgages.
The monoline lenders do not cross-sell you on chequing/savings account, RRSPs, RESPs, GICs or anything else. They don’t even have these products and services available.
Monolines are very reputable, and many have been around for decades. In fact, Canada’s second-largest mortgage lender through the broker channel is a monoline lender. Many of the monoline lenders source their funds from the big banks in Canada, as these banks are looking to diversify their portfolios and they ultimately seek to make money for their shareholders through alternative channels.
Monolines are sometimes referred to as security-backed investment lenders. All monolines secure their mortgages with back-end mortgage insurance provided by one of the three insurers in Canada.
Monoline lenders can only be accessed by mortgage brokers at the time of origination, refinance or renewal. Upon servicing the mortgage, you cannot by find them next to the gas station or at the local strip mall near your favorite coffee shop. Again, the mortgage can only be secured through a licensed mortgage broker, but once the loan completes you simply picking up your smartphone to call or send them an email with any servicing questions. There are no locations to walk into. This saves on overhead which in turn saves you money.
The major difference between a bank and monoline is the exit penalty structure for fixed mortgages. With a monoline lender the exit penalty is far lower. That is because the banks and monoline lenders calculate the Interest Rate Differential (IRD) penalty differently. The banks utilize a calculation called the posted-rate IRD and the monolines use an IRD calculation called unpublished rate.
In Canada, 60% (or 6 out of every 10) households break their existing 5-year fixed term at the 38 months. This leaves an average 22 months’ penalty against the outstanding balance. With the average mortgage in BC being $300,000, the penalty would amount to approximately $14,000 from a bank. The very same mortgage with a monoline lender would be $2,600. So, in this case the monoline exit penalty is $11,400 less.
Once clients hear about this difference, many are happy to get a mortgage from a company they have never heard of. But some clients want to stick with their existing bank or credit union to exercise their established relationship or to start fostering a new one. Some borrowers just elect to go with a different lender for diversification purposes. (This brings up a whole other topic of collateral charge mortgages, one that I will venture into with another blog post.)
There is a time and a place for banks, credit unions and monoline lenders. I am a prime example. I have recently switched from a large national monoline to a bank, simply for access to a different mortgage product for long-term planning purposes.
An independent mortgage broker can educate you about the many options offered by banks and credit unions vs monolines.

Thank-you Michael Hallett from DLC for you article.

Thursday, March 23, 2017

Step By Step Mortgage Guide

One of the first steps in buying a new home is to take a realistic look at what you can afford and how you are going to pay for it. 

If you are like most people, you will probably have to finance your home purchase with a mortgage. 

Please click here to find the Step-By-Step Mortgage Guide with explanation of terms and options to understand when considering what mortgage is right for you.