Thursday, December 28, 2017

2016 Property Assessments vs. Market Value

2016 Property Assessments vs. Market Value

Property Assessments vs. Market ValueSHORT VERSION:

Do not rely on your provincial assessment for a fair market value of your property.

The value printed on that document was arrived at during a time in the previous year, the market may have changed a bit since then, and not in the direction you might think.

Do not rely entirely on the buyer’s opinion or the seller’s opinion in an unlisted private transaction for a fair market value.

Do not rely entirely on your neighbors, friends, or family members opinions for a fair market value of a property.

Do consider ordering a marketing appraisal, but do not rely on it 100%… maybe 98% though.

Do consider an evaluation by an experienced, active, local Realtor or two. This in combination with a marketing appraisal is the best indicator of current fair market value.

Gather professional opinions from Realtor(s) and an Appraiser – these are the people with their feet on the ground and their heads in the game.

Thank you.


Tuesday, December 19, 2017

5 Common mistakes to Avoid when Shopping for a Mortgage

5 Common Mistakes To Avoid When Shopping For a Mortgage

5 Common Mistakes To Avoid When Shopping For a MortgageAvoid these 5 common mistakes, and you will have no problem getting your mortgage faster, more efficiently, and with a clear understanding of the process:

1. Thinking banks are the first and best place to go for a mortgage
Mortgage brokers can often beat the bank rates by using different lending institutions. The bank is limited to one lender, but if you use a mortgage broker, they have the option to shop for you with multiple lenders to find you the best product.

2. Not knowing your credit score
Your credit score is a HUGE factor in your mortgage application. The first thing lenders look at is your history and your score—then from there they build your file.
You should know where you stand because so much of your lending availability is tied to your credit score. In mere minutes, a mortgage broker can help you obtain a copy of your credit report, and go through it to ensure the information is correct.

3. Shopping with too many lenders
When you shop from institution to institution you will have your credit score pulled multiple times. Lenders typically frown upon this and it may interfere with your mortgage application. If you go to a mortgage broker though, your score is pulled ONE time only.

4. Not keeping your taxes up-to-date
Plain and simple: If you are self employed or the mortgage application is requiring a 2 year income average to qualify (utilizing overtime wages and/or bonuses) and you haven’t filed your taxes and kept them up to date, you cannot get a mortgage. Lenders will ask for your notice of assessment if your tax filings are not up to date, and you will not get your mortgage until they are filed properly and a Notice of Adjustment from the latest year it is received.

5. Not understanding that the real estate market you qualify in TODAY will adjust in the future.
Rates may be at an all time low right now, but new rules, government regulation, and changes when you are up for renewal can change the circumstances. You must be able to carry your mortgage payment at a higher rate or with new laws imposed.
Remember, securing a mortgage isn’t always about getting the best deal. It’s about getting a home you want and establishing yourself as a homeowner. That means not overextending yourself and taking your qualifying amount to the maximum. Leave some breathing room because no one knows what the future may hold!

Monday, December 18, 2017

Discharged from a Consumer Proposal?

Getting a Mortgage After Consumer Proposal or Bankruptcy

Getting a Mortgage After Consumer Proposal or Bankruptcy

Life can definitely throw some challenging financial situations your way. As mortgage professionals, we can provide solutions and strategies during or after these challenging times in order to get you back on track. We have access to banks, trust companies and mortgage companies that specialize in this transitional period to help you move forward with the best mortgage plan for you. We protect your credit by negotiating with multiple lenders to find a solution for you.

If you have never owned a home and have had a consumer proposal, the good news is that you are already accustomed to the discipline of saving money every month. Should you choose to continue to grow your savings, those funds can then be put toward a down payment and re-establishing credit.

If you own a home already, there are lenders that will help you refinance and pay out your proposal earlier in order to accelerate your transition period.

After bankruptcy, different lenders will issue mortgages based on the amount of time since you were discharged, the amount of down payment on a purchase and/or the current equity in your home if your already own. Lenders then price their rates based on these aspects of your application.

At Dominion Lending Centres, we look forward to learning about your journey while protecting your credit and guiding you through the best strategy on a moving forward basis.

Thursday, December 14, 2017

Why so many mortgage documents?

Why So Many Mortgage Documents?

Why So Many Mortgage Documents?

Documents, documents and more documents. Yes that’s right you will need to provide your myself, yourmortgagegirl, with as many documents that we request upfront as possible.

Why?
Because the more supporting documentation you have available will help us as brokers to find you your best mortgage options. If you don’t have everything on hand e-mail a PDF of what you have and start digging up the rest as soon as possible.

Why so many documents you ask? While the lending market isn’t what it used to be, it is now much more strict and complex then a few years ago. Lenders are asking for WAY more documentation before they will lend you money.
Yes, there have been instances of mortgage fraud, that likely led to more scrutinized lending and Government regulations lenders have to abide by and they are always changing. Mortgage lenders need to protect their investors and help ensure our Canadian housing market remains strong.

It may seem like a pain but ask yourself this if you had a large amount of money would you lend it out to somebody without proof they have income stability and/or the means to pay it back? Pretty sure your answer is no (at least mine is).

Below is a list of typical documents lender and mortgage insurers request. If you would like a tailored list please contact me at 780-919-0475 or email: amy@yourmortgagegirl.ca

Income – lenders are looking for proof of income stability.
Self-employed Income
* 2 years of Income Tax Returns, Business Financials, 2 yrs CRA Notice of Assessments. Often it’s best to have your accountant e-mail them to us so no pages are missing.

Rental income
* Lease agreements
* T1-General tax returns with the Statement of Real Estate Activities. If you don’t claim your rental income let us know as this may affect how your mortgage is approved.
* Proof of the rental income being deposit on a regular basis into your bank account.

Guaranteed Employment Income
* A couple of recent pay stubs
* A job letter confirming your position, guaranteed pay and hours, if you are seasonal, contract or any specific information that relates to your income stability. Lenders will call your employer to verify the letter and ask for more information as possible. (Sample Job Letter)
* 2 Years of CRA Notice of Assessments
* 2 Years T1-Generals

Commission, Overtime, Seasonal, Contact or Bonus Income.
* A couple of recent pay stubs
* Job letter
* 2 years of T1-General Income tax returns
* 2 years of CRA Notice of Assessments

Liabilities – We will see most of your consumer credit accounts on your credit report however we may require some additional paperwork
* Current mortgage statements
* Property tax statements and proof of payment
* Child Support Payments proof via court orders and bank statements
* Alimony via Separation Agreements
* Proof your income tax has been paid. This is the most important item to pay because the Government has more power than the lenders. If you are wanting to refinance your mortgage to pay CRA contact us to discuss your options.
* Proof debts have been paid. If a zero balance is require you must show the account at a zero balance or the current balance and the proof of payment

Down Payment & Closing Costs
* The last 90 days of savings history. Any larger deposits have to be sourced.
* Gift Letter (some lenders have prescribed forms)
* Statement showing gift deposited into your account
* Property sale contracts and mortgage statements

About Documentation from Financial Institute
* Must have account ownership proof. For example e-statements are the best as they typically have your name, account number and the providers details already on the statement
* Screenshots work if the providers logo/name are clearly shown on them as well as the account holders name. If the account number only shows then you will have to provide an additional document from the provider with both your account number and name.
* If you are having your account history printed at a Teller please have the Teller stamp the paperwork
Documentation varies by applicant and lender. Be prepared by contacting your mortgage professional today for your tailored documents list.

Wednesday, December 6, 2017

What's changing on January 1, 2018?

New mortgage rules unveiled by OSFI on Tuesday will require even those who don't need mortgage insurance to have their finances stress tested at higher rates.
Effective January 1st, 2018, new qualification rules will apply to Uninsured loans 
( 20% down or greater)

To my valued clients, I want to help you navigate through these new mortgage rule changes. I want to  help borrowers make informed decisions when buying a home in the new year.

WHAT'S CHANGING ON JANUARY 1, 2018?

The qualifying rate for all uninsured purchases and refinances will be the greater of:
Contract Rate PLUS 2%
OR
The Bank of Canada Benchmark Rate
There will be no change to the qualifying rate for Insured applications. ( less than 20% down) Insured applications will continue to be qualified using the greater of the contract rate or the Bank of Canada Benchmark Rate.

WHAT’S THE IMPACT ON THE BORROWER?
The new B-20 changes will have a direct impact on your purchasing power in the new year. The table below shows what a borrower with an annual income of $67K can afford today versus what they can afford in 2018 under the new rules. 

*Example assumptions include: 5 Year Fixed Rate: 3.09% / 25 Year Amortization / $700 in other monthly debts.
 
WHAT’S THE IMPACT ON THE PIPELINE?
All uninsured applications received prior to January 1st, 2018 where a commitment has been issued, will be subject to the old qualifying rules.GET YOUR MORTGAGE APPLICATIONS IN NOW!!!!!
 

Monday, December 4, 2017

3 Mortgage Terms every home owner should know

Prepayment, Portability and Assumability

Prepayments

One of the most common questions we get is about mortgage prepayments. The conditions vary from lender to lender but the nice thing about prepayments is that you can pay a little more every year if you want to pay off your mortgage faster. A great way to do this is through prepayments.
They’re always something to ask your broker about because each lender is very different. You can always do an increase on your payments and that means that you pay a little bit more each week or each month when you make your mortgage payment. You can also make a lump sum payment. Perhaps you get a bonus every year or you get a lot of Christmas money. You can just throw that on your mortgage. It goes right on the principle so you’re not paying interest on those extra funds. Paying a big chunk at once also means that a higher percentage of future payments will also go towards the principle.

Portability
Portability means that if you sell your house and you want to take your current mortgage and move it to your new house you can. The one thing about portability that we always have to keep in mind is that we can’t decrease the mortgage amount but we can do a little bit of an increase often through a second mortgage or an increase we call a blend and extend. It just gives you the flexibility of moving the mortgage from one property to the next property. It also gives you the flexibility of being in control of where you mortgage is going and not having to break your mortgage every time you decide to move.
Moving a mortgage to a new property avoids things like discharge fees, the legal cost of registering a new mortgage and the possibly of a higher interest rate. It’s great to be able to keep that rate for the full term rather than having to break and pay those penalties half way through.

Assumability
Assuming a mortgage comes into play more often where there are family ties. Say your parents have a mortgage and you move into that house. Rather than you going out and getting a new mortgage and your parents having to pay those discharge fees, you have the ability to assume their existing mortgage at that current rate. All you have to do is apply and make sure you can actually afford the mortgage at what they’re paying. You have to be able to be approved on the remaining balance on the mortgage just like you would on any other mortgage. Just because your parents have an eight hundred thousand dollar mortgage doesn’t mean you’ll be able to take that over.


If you have any questions, contact Amy Wilson today.