Just writing to say “Hi” and to remind you of the importance of creating an inventory list of your belongings in case you ever need to make an insurance claim.

The reason I mention it, is that I recently heard about a family whose home was broken into. Unfortunately they never got full replacement value for their losses because they couldn’t supply the insurance company with reasonable proof of what they owned. In order to avoid such claim problems, insurance companies suggest that you make a complete inventory list of your belongings and also video or photograph them for visual proof.

No one ever likes to think about having their home broken into, but in the event that it happens, it pays to be prepared.

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.

YOUR MORTGAGE PLAN

What does your mortgage plan mean? I have customers come to me on a referral basis daily and the only thing in common with all my clients is that their mortgage needs and what they need to do to qualify is unlike anyone else!!!! This is where I come in – as your mortgage girl, I look at each individuals unique situation and figure out a mortgage plan for them based on their credit, job history, down payment and what their lifestyle needs are. What I want to stress to anyone who is reading this article and all the people who are referred to me – this is a safe zone for you, no judgment – I am here to help no matter what.

Today I am going to focus on something that many people are not aware is available to them, absolutely free of charge and it can change your buying future for the better.

START RIGHT PROGRAM!

My start right program is working for many clients and has proven to be very successful for my clients and my referral partners.

I have a follow up system in place, based on what is required to get a client, you, in a mortgage. For some reason you don’t qualify to buy right now and usually get discouraged and give up when you are told you are declined by the lenders.

I look at your decline from a lender as an opportunity – the first step is taken – you know you want to own a home – so what needs to happen to get you there. I set up a plan, free of charge for you so you can reach your home ownership goals.

The program is set from 4 months to 2 years to get you qualified! Instead of staying in the same dreaded cycle of not qualifying because you don’t fully understand why you didn’t in the first place or didn’t know how to fix it.

All the correspondence I send to you to get back on track is also co-branded with your original referring partners(realtor, home sales consultant, friend) information on it and when you are ready to buy, you are referred back to them to buy your home!

Contact Amy Wilson today! I promise it is easier than you think and well worth it!

You dont’ even need to leave the comfort of your own home as all my services are done over phone, email and or fax!

Click here to do an ONLINE APPLICATION NOW!

You’ve been offered an amazing rate and you just can’t believe how much you will save. You’re super excited and getting ready to go sign off on the papers when you randomly run into a mortgage broker and mention the deal you scored. The broker says to you that’s an awesome rate, any idea what the penalty calculation is if you need to refinance in the future?. Wait what…isn’t it the same as the last mortgage I had?

Maybe but maybe not. There are a lot of new mortgage products available on the market that offer lower rates while giving up other benefits. These mortgage options may have higher penalties, lower prepayment privileges or even worse they could have a bone fide sale clause.

I don’t blame a consumer for always thinking rate first. The industry as a whole is guilty of shoving rates in our face anytime they possibly can. It’s the easiest part of a mortgage to compare and easiest to advertise. But definitely not the most important part.

Being aware of all the terms and conditions is the key to finding your best mortgage option. You should be aware that there are mortgages that may come with one or more of the following terms:

* Sales only clause, meaning you may not be able to refinance your mortgage until your term is up

* A higher set pay out penalty. Meaning you may have to pay more than the standard 3 months interest or Interest Rate Differential penalty.

* Smaller prepayment options

* and more!

Always ask these 5 Questions when offered a mortgage:

1. How is the pay out penalty calculated if I break the mortgage?

2. Can I refinance with another lender before my term is up?

3. Is the mortgage registered as a Standard or Collateral charge on my land title?

4. What are my prepayment privileges?

5. Is the mortgage portable and assumable?

Bottom line is that knowing all the fine print is essential in making an educated mortgage decision. We never know what is going to happen in life and saving a little bit on your mortgage rate may cost you more in the long run.

Thank-you Kathleen Dediluke for the above article.

Aside from the emotions involved with a separation, there are several things to consider and act upon relative to your current mortgage. Now that your separation agreement has been finalized, some action likely needs to be taken. The main questions that need to be addressed are

1) if you will be buying a new property

2) staying in the existing one In the event of a new Purchase, here are a few areas to consider:

Will you be keeping or selling the existing house?

What can you afford relative to your current financial situation?

Will one of you be coming off title (should either of you keep the existing residence)? How will you secure a down payment for the new property?

In the event of a Refinance, here are a few areas to consider:

Can the equity in the property be used to consolidate joint liabilities?

Is there enough to provide a payout, if there is one in question to the other party?

By working with a mortgage agent such as myself, I can help you navigate whatever scenario best applies to your situation all while coaching you about how to maintain a positive credit rating. A traditional Refinance would limit the access to the equity in your property to 80% of your current homes value (minus the existing mortgage). I have the ability to work with you and may be able to access your equity up to 95% of the value of your home (minus the existing mortgage), all while maintaining great rates. I can only sympathize that this is a difficult period in your life. I have help several individuals in your exact situation get back on track.

Please give me a call today so that we can discuss your current situation and explore all options to help you move on with your life.

Spousal Buyout Program GOING THROUGH A SEPARATION BUT WANT TO KEEP YOUR HOME? Separating from a spouse is emotionally draining and this is often compounded when the largest asset in many relationships, the matrimonial home, is a factor. Sometimes, both parties want to sell and buy new homes but other times, one person may want to keep the home and pay their Ex out for his/her share of the equity. By law in Canada, you can refinance your home up to 80% of it’s value. As the amount that can be taken out may not be enough to “buy-out” the other spouse, pay off joint debts, AND keep the minimum 20% equity required in their home, this can cause an issue. But not to fret – Another option is available! Through the SPOUSAL BUYOUT PROGRAM, if you are going through a Separation or Divorce and have a Separation Agreement, you can increase your loan amount up to 95% of your home’s value! (NOTE: A version of this option known as a “Dissolution of Relationship” is also available for siblings, friends, or other forms of “joint ownership” – Contact me to learn more!) STEPS: SEPARATION AGREEMENT: It is imperative to speak with a Mortgage Broker early on in this process as your assets and debts may need to be noted in your Separation Agreement in a very specific way (example – car loans or Line of Credits may need to be noted as “joint” marital debt). This, in turn, can prevent having to make amendments to your Separation Agreement, which can reduce the chances of incurring any additional legal fees. Let us ensure that the two of you can each make the best possible start on a new path. PRE-QUALIFICATION: The person staying in the home will need to QUALIFY for the full “purchase” on their own based on income, credit, etc. To ensure that you can debt service the full mortgage remaining, debts, and possible child/spousal support, request a mortgage consult and don’t forget to bring your Separation Agreement! APPRAISAL: In a sense, one spouse will be “selling” the home to the other. This allows you to go back to the rules where you only need 5% down to “buy”. However, as we all have opinions on what our house is “worth” and this will be a “non-arms length” transaction, Lenders will request a full appraisal to confirm the new “purchase price”. DOCUMENTS: Be aware that this will now be like a new purchase so we will need all the standard documents to confirm income, employment, and funds. Some of the documents we will ask for are your last 2 years of tax documents, latest pay statements, Letter of Employment, and ID. Also, an Offer to Purchase “selling” the home from both parties to the one spouse must be drafted, signed, and provided. Templates for an Offer to Purchase can be found here or here. CLOSING COSTS: Just as in a refinance, the “down payment” for this option comes from existing equity but you should also be prepared for a whole new set of legal fees, an appraisal, and any applicable prepayment penalties charged by the original mortgage Lender. Also, if your mortgage had originally been insured (ie. CMHC), then we may be able to get away with just a top up of your mortgage default insurance premium! This could result in thousands of dollars of savings. However, if the property had not previously been insured, mortgaging up to 95% will trigger a full insurance premium. EXTRAS: This option is only available for the MATRIMONIAL HOME and not investment properties; Both parties must be on Title PRIOR to the Spousal Buyout application; and We will need to follow exactly what shows on the Separation Agreement. Especially if we are wanting to “top up” a previous mortgage default insurance premium, the Agreement must spell out exactly how much in funds will be taken out for the fair division of marital assets. If after paying out your Ex there is still equity remaining that can be taken out (ie. if you were at 90% instead of 95% after paying out joint debts and matrimonial division), but this amount was not mentioned in the Separation Agreement, this extra amount cannot be taken out for personal use. If you are going through a separation or know someone who is, please call me at 780-919-0475. I can provide them what mortgage options they have available and prepare for any new financing you may require. I am also able to connect you to Real Estate Professionals that will provide the pre-listing service you require and advice you need to sell your home quickly.

As a first time home buyer, the process of purchasing a home can seem very daunting. From a financing standpoint, here are 10 common questions I hear from first time home buyers.

1. What’s your best rate? This is by far the most common question. Rate is a small part of your mortgage contract but its often the most talked about. People become “rate sensitive” when they hear their neighbour or co-worker got 2.49% and they want the same rate. Some lenders will dangle these low rates to entice you but don’t be fooled. The lowest rates almost always come with conditions such as high pre-payment penalties or quick 30 day closings. Is saving $15/month on your mortgage payment worth paying a penalty up to 9 times higher when you sell or need to refinance in 3 years? No broker or website can secure a rate without a full application and credit bureau.

2. What’s the maximum mortgage amount for which I can qualify? My suggestion is set a budget your comfortable with and let your Dominion Lending Centres mortgage professional tell you how much mortgage your budget allows. The two ratios used to determine how much mortgage you qualify for are the Gross Debt Service Ratio (GDS) & the Total Debt Service Ratio (TDS). Your GDS is composed of your new housing cost such as your mortgage payment (principal & interest), property taxes, heating costs and any strata fees. Your TDS includes your GDS as well as any other monthly liabilities such as car loans, credit card debts, lines of credit etc. Depending on your credit score, the maximum GDS/TDS ratio is 39/44. This means your GDS shouldn’t be more than 39% of your gross income. Your TDS shouldn’t be more than 44% of your gross income. If your gross income is $100,000/yr you could allocate $39,000/yr to GDS & $44,000/yr to TDS.

3. How much money do I need for a down payment? For owner-occupied homes, the minimum down payment required is 5% of the purchase price for homes under $500,000. For homes over $500,000 10% down payment is required on the amount over $500,000 up to $1M. Anything over $1M requires 20% down as a minimum. If you want to avoid CMHC mortgage insurance then 20% down payment or greater is needed. Any rental properties require a minimum of 20% down.

4. What happens if I don’t have the full down payment amount? As a first time home buyer you are eligible to use your RRSP as a form of down payment to a maximum of $25,000. Your RRSPs can be used without being taxed if you pay back within 15 years. Another popular option is a gifted down payment. A gift can come from an immediate family member to form part or all of your down payment. Some lenders will also allow a flex down program. This means you borrow the money from a line of credit and this loan is factored into your debt service ratios.

5. What will a lender look at when approving me for a mortgage? Generally speaking, the lender will want to look at your source of income, employment history, debt levels and repayment history and the actual property itself. Lenders want stability. By vetting and checking the above, the lenders feel confident you are able to make your mortgage payments and in the unlikely event you default, they know the property is marketable.

6. What’s better, fixed or variable rate? Not everyone qualifies for a variable rate because the qualification rate is currently 4.74% vs the 5 year fixed of 2.54%. That’s a big difference! Assuming you qualify for a variable, it boils down to risk tolerance and your plan for the property. Fixed rates give you stability over the term of your mortgage where a variable rate is tied to the prime rate, currently 2.70%. This means your mortgage payment could decrease or increase depending on what the Bank of Canada decides. Variable rates can save you thousands if you sell or refinance during your term. The standard penalty on a variable rate is 3 months interest. The penalty on a fixed rate is calculated using the interest rate differential and depending on your lender can sometimes be in the tens of thousands of dollars. Your Dominion Lending Centres mortgage professional can discuss all the differences and benefits for you.

7. What credit score do I need to qualify? Anything over 680 is considered AAA with most lenders. A score above 680 gives you access to all the discounted rates. If your score is below 680 there are options but often at higher interest rates.

8. What happens if my credit score isn’t great? Take action immediately to increase your credit score. If possible pay off all your debts on credit cards and lines of credit as this will increase your score substantially. Its a good idea to always pay your balance in full each month as this creates a pattern of positive repayment. Don’t take on anymore new debt such as car loans or new credit cards. Make sure everything is up to date meaning no overdue collections or old Telus or Rogers bills outstanding.

9. How much are closing costs? Closing costs vary but lenders typically want to see that you have 1.5% of the purchase price on hand for closing costs. If you bought a condo for $500,000 you’d need $7,500 for closing costs. This is only a guideline and costs vary. Closing costs will cover things like, inspections, lawyer fees, property transfer tax, appraisals, and title insurance.

10. How much will my mortgage payments be? Obviously this depends on your mortgage size, rate, amortization, repayment schedule, any CMHC insurance and if your lender is collecting your property taxes for you or not. My suggestion is stick to your budget! If you have any other questions, please feel free to contact Dominion Lending Centres – we are always happy to answer all your questions.

With a direct impact on your ability to purchase or refinance a home, mortgage insurance is one of the most cost-effective solutions for Canadian homebuyers. It allows borrowers to take advantage of more flexible financing options, including lower down payments. Each year, more Canadians are benefiting from the choices mortgage insurance offers, including:

1.The ability to purchase a home without having to save for a 20 per cent down payment.

2.A comprehensive product suite designed to meet your unique financial and homeownership needs.

3.Greater flexibility through affordable premiums and lower down payment options.

4.The ability to port or transfer your mortgage insurance from one home to another, anywhere in Canada.

5.The opportunity to refinance and take advantage of available equity to effectively use funds to pay down debt or make sensible financial investments