Thursday, September 28, 2017

Mortgage Pre Approval's made easy!




 Amy's Pre-Approval Process:


As your mortgage broker, I only represent you, my client and I am aligned with a number of lenders to secure you the best mortgage and rate.  While I am taking care of your mortgage plan, you can focus on one detail, finding your dream home!

Why is it important to go through Amy's pre approval process?

 A: to avoid disappointment when you find the house you love.  Lenders and mortgage insurers have different ways of verifying incoming and determining your debt to income qualification ratios! If you are not properly pre-qualified, you may have your heart set on a home purchase that does not work.  I take the time to bring you through the process below to ensure you have a solid pre approval in place.

 I have outlined my simple mortgage process below:
Step One:

The link below is for my website, just click on the apply now button and follow the prompts – this application will come direct to me as soon as you have completed it.

Online application - minutes to fill in

Step Two:

Upon receipt of the above online application - I will send you a consent form via docu-sign – it takes less than a minute to sign and no app download is needed.

Upon receipt of the signed consent and the application, I will contact you to fill in anything that may be missed and issue you a list of required paperwork for the lender.  Below you will see a generic list to get started with and we can update it once we have the application and consent completed.

  1. letter of employment – company letterhead, job title, start date, base income paid, name and contact number to verify the letter
  2. Most recent paystub
  3. If you earn bonus, overtime or commissions please also provide last two years Notice of assessments and T-1 generals
  4. two pieces of ID - one must be a picture ID
  5. 90 day banking history with name and account number on it to verify your down payment
  6. Void cheque
If you own another home:
  1. copy of the mortgage statement
  2. copy of the property tax assessment
  3. copy of rental agreement if you have one
  4. copy of the condo fees if there are any
Feel free to contact me anytime with any questions you may have,
Contact me today to get the pre approval process started!

Tuesday, September 26, 2017

Credit Scores

Credit Scores: Here’s what you need to know

The interest rate you pay on loans for every major purchase you make throughout your lifetime depends on various factors, and is dependent on your creditworthiness – everything from the mortgage on your home to your car loan or line of credit.
And, given today’s ever-changing mortgage requirements and rising interest rate environment, your credit score has become even more important.
Your first step towards credit awareness and well being is to know where you stand. Request a free copy of your credit report online from the two Canadian credit-reporting agencies – Equifax Canada and TransUnion Canada – at least once a year.
This will also help verify that your personal information is up to date and ensure you haven’t been the victim of identity fraud.
Newly established credit
If you’re new to credit, you may wonder why your credit score pales in comparison to your friend’s.
Payment history is a key factor for both Equifax and TransUnion. As well, if you don’t talk to your friends about money, you may not realize that their financial situations are different from yours. Your friend with the better credit score may carry less debt than you, for instance.
Using credit properly helps keep your credit score healthy, as well as comes in handy when you don’t have the cash immediately on hand to pay for an expense. Planning for expenses helps alleviate reliance on credit – and the payment of interest.
If you use credit cards and lines of credit to your full advantage, you’ll never have to pay interest on these revolving credit products. In fact, you can use the borrowed money for free if the full amounts are paid on time.
Forgot to pay a credit card bill?
Your credit generally only takes a hit after you miss two consecutive payments.
You’ll likely see a drop of 60-100 points on your credit score instantly, and your credit card provider may end up increasing your interest rate.
Every point counts, however, so you obviously don’t want your credit score to take a hit, particularly if you plan on applying for a major loan – such as a mortgage or car loan.
Know your creditworthiness
Following are some key components that help determine your credit score.
  • Credit card debt. Aside from paying bills on time, the number one way to increase your credit score is to pay down your credit cards so they’re below 70% of your limits. Credit card usage has a more significant impact on credit scores than car loans, lines of credit and so on.
  • Credit history. More established credit is better quality If you’re no longer using your older credit cards, the issuers may stop updating your accounts. If this happens, the cards can lose their weight in the credit formula and, therefore, may not be as valuable. Use these cards periodically and pay them off.
  • Credit reporting errors. Always dispute any mistakes or situations that may harm your credit 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(s) aware of the situation.
Do you have questions about your credit score or creditworthiness? Contact Amy Wilson - 780-919-0475, or amy@yourmortgagegirl.ca

Thank-you Tracy Falko - DLC Forest City for this article

Monday, September 25, 2017

What is Bridge Financing?


25 Sep 2017

Bridge Financing – How Does It Work?

Rarely in life do things go as planned, especially in real estate.
In a perfect world, when buying a new home, most people want to take possession of their new house before having to move out of the old one. This makes moving a lot easier and allows you time for painting or renovations prior to moving into your new home.
Where it gets complicated; most people need the money from the sale of their existing house to come up with the down payment for the new house!!
This is where bridge financing comes in.
Bridge financing allows you to bridge the financial gap between the firm sale of your current home, and the firm commitment to purchase your new home.
Bridge financing allows you to access some of the equity in your existing property, which you can use towards the down payment on the new property you are buying.
Where many people get confused is that in order to secure bridge financing, you must have a firm sale on your existing house. That means all subjects have been removed!!
If you haven’t sold your home, you won’t get the bridge financing, because there is no concrete way for a lender to calculate how much equity you have available and if you can afford your new home.
For most people, unless you can qualify and pay for two mortgages, you should always sell your existing home before purchasing a new one. Why?
• With today’s property values constantly changing, you won’t know how much money you have until you sell your home. Your home is only worth what someone is willing to pay for it NOW! Past sales and future guesses don’t count!
• You need the proceeds from your existing home to help pay for your new home’s down payment, renovations, moving costs and (if required) how much mortgage you qualify for.
If you have sold your existing home but your closing date is after the closing date of the new property you just purchased, then bridge financing is your best option:
• Your new lender must allow for bridge financing (not all banks allow bridge financing as an option). Your mortgage broker can work with you to find a lender who offers bridge financing.
• Bridge financing costs more than your traditional mortgage (i.e. Prime + 2-4% plus an administration fee).
• Typically bridge loans are restricted to 90 days.
What happens if I don’t sell my home?
Banks will not provide you with a bridge loan if you don’t have a firm sale agreement for your home since the loan can’t be open-ended. If you don’t have a firm selling date you may need to consider a private lender for the bridge loan.
Private Financing
If you have purchased your home and it is closing and your existing home has not sold, then you may have to take out a private loan:
• This option is expensive and is based on you having enough equity in your current property to qualify.
• Typically, private financing comes with a high interest rate 7-15% plus an upfront lender fee + broker fee. These amounts will vary based on your specific situation, such as time required for loan, loan amount, loan to value, credit bureau, property location, etc.
• Private financing is expensive, but it could be cheaper than lowering the purchase price of your existing home by tens of thousands of dollars to sell your existing home quickly.
Your bank doesn’t do this type of financing. You must use a specialized mortgage broker who has access to individuals that lend money out privately.
Bridge financing & private financing are solutions when your buy and sell days don’t work.
Don’t waste your time trying to sort all this out on your own.  Contact Amy Wilson for all your mortgage needs.

Thank-you to Kelly Hudson from DLC Canadian Mortgage Experst for this article.

Friday, September 22, 2017

More Mortgage Rule changes to come! Are you prepared?

Mortgage changes are coming—are you prepared?

We know – more changes?! How can that be! With this ever-changing landscape, mortgages continue to get more complicated. This next round of changes is predicted to take affect this coming October 2017 (date not yet available). These new rules contain three possible changes, the most prominent being the implementation of a stress test for all uninsured mortgages (those with a down payment of more than 20%). Under current banking rules, only insured mortgages, variable rates and fixed mortgages less than five years must be qualified at a higher rate. That rate, of course, is the Bank of Canada’s posted rate (currently 4.84%, higher than typical contract rates). Going forward, it will be replaced by a 200-basis-point buffer above the borrower’s contract rate. source
The other proposed changes include:
• Requiring that loan-to-value measurements remain dynamic and adjust for local conditions when used to qualify borrowers; and
• Prohibiting bundled mortgages that are meant to circumvent regulatory requirements. The practice of bundling a second mortgage with a regulated lender’s first mortgage is often used to get around the 80%+ loan-to-value limit on uninsured mortgages.
These two proposed changes are minor, and would only affect less than 1% of all mortgages in Canada. The main one, the stress testing, will have a far greater impact.
Why is this happening?
You may recall that the stress test requirements were announced by OSFI in October of 2016. This rule followed a long string of new rules that occurred in 2016. At the time, they primarily affected First Time Home Buyers and those who had less than 20% down to put towards a home. Now, those who are coming up to their renewal date or wishing to refinance may find that this will have an impact on them. They may not qualify to borrow as much as they once would have due to the stress testing implication. For example:
A dual-income family with a combined annual income of $85,000.00. The current value of their home is $610,000.00.
Take off the existing mortgage amount owing and you are left with $145,000.00 that is available in the equity of the home provided you qualify to borrow it.
Current Lending Requirements
Qualifying at a rate of 2.94% with a 25-year amortization and with a combined annual income of 85K you would be able to borrow $490,000.00. Reduce your existing mortgage amount of 343K and this means that you could qualify to access the full 145K available in the equity in your home.
Proposed Lending Requirements
Qualify at a rate of 4.94% with a 25-year amortization and with a combined annual income of 85K you would be able to borrow $400,000.00. Reduce your existing mortgage amount of 343K and this means that of the 145K available in the equity in your home you would only qualify to access 57K of it. This is a reduced borrowing amount of 88K.
They have a mortgage balance of $343,000.00. Lenders will refinance to a maximum of 80% LTV (loan to value). The maximum amount available here is $488,000.00
As you can see, the amount this couple would qualify for is significantly impacted by these new changes. Their borrowing power was reduced by $88,000-a large sum of money!
With the dates of these changes coming into effect not yet known, we are advising that clients who are considering a renewal this fall do so sooner rather than later. Qualifying under the current requirements can potentially increase the amount you qualify for—and who wouldn’t want that?
For more information on how these changes affect you specifically, or to refinance your mortgage, get in touch with Amy Wilson, Amy's website

Thanks Geoff Lee from DLC for this excellent article.