2 Feb

Mortgage Brokers Vs Banks

Mortgage Tips

Posted by: Brent Adair

Buying your first home and getting your first mortgage can be an overwhelming experience. So when it comes to getting your first mortgage where do you start?

 

Right now there are plenty of options available when it comes to mortgages, as 40% of consumers are turning to mortgage brokers for their mortgage needs instead of banks.

 

Mortgage Brokers are provincially licensed and regulated by the CMBA. Mortgage brokers like myself are able to help you with all aspects of a mortgage, from figuring out how much you can afford, to determining the best mortgage product for you and even helping you find ways to save money and pay off your mortgage faster.

 

Many lenders’ rates and mortgages can only be accessed through a mortgage broker. By not having a selection of lenders to choose from and going with a bank to get a mortgage, this can mean harsher penalties for breaking your mortgage early, as well as a higher interest rate; which can end up costing thousands of dollars over the entire life of a mortgage.

 

A mortgage broker is not only able to tailor a mortgage product to your specific needs. Mortgage brokers have access to more lenders, they’re better able to connect you to a lender and a mortgage based on your specific needs and your financial situation to get you the lowest rates possible.

 

Mortgage brokers offer convenience, which lets you meet around your schedule and not during regular bank hours. Mortgage brokers also operate on commission and are paid by the lenders who ultimately grant you your mortgage, so there is no cost to the consumer.   

 

So feel free to contact me at 519-854-8668 or email me at brentadair@dominionlending.ca

if you have any questions.

 

1 Feb

Tips for a Successful Move

General

Posted by: Brent Adair

Moving to a new area or even a new city can be stressful at times, but here are some successful tips to help with making the move easier on you.

 

Hire a licensed and insured moving company

This will make sure you are hiring a reputable, just in a rare case that something goes wrong or breaks on the way to your new home.

 

Plan and advertise your garage sale strategically

Having a garage sale is the perfect way to get rid of the junk you do not want, as well as a quick way to make a few bucks. If you do plan on taking this route, make sure that your neighbors are aware by putting posters and flyers up, as well as putting it up online.

 

Keep important documents handy

When packing your things, make sure to keep your important documents (birth certificates, passports, tax documents, etc) in a separate, clearly labeled box.

 

Notify your utility company about the move

The sooner you notify the utility company about the move, the easier the process of transferring your electricity bills to your new home will be. It is also a good idea to schedule a time for the cable guy to show up and set up your internet and cable and set them up in your new home.

 

Pack non-essentials first and essentials Last

As you start your packing process, it is important to start packing up items that are non-essential to you. You should then pack a separate suitcase or box with the belongings you will need immediately upon moving into your new house.

 

Hire a Sitter if you are moving with a baby or pet

Help with saving your sanity by hiring a sitter to watch your baby or pet(s). There will be plenty of open doors, heavy boxes and dangerous equipment around and it would be best to keep your baby and pet away from the commotion.

 

Good Luck and happy moving!

1 Feb

What is a B-Lender?

Mortgage Tips

Posted by: Brent Adair

There are three types of major mortgage lenders in Canada, which include traditional, subprime and private lenders.

 

The traditional mortgage focuses on clients who possess good credit and jobs, they are focused on buying real estate under the traditional guidelines. However not everybody is able to get approved by banks, so if you are looking for help for financing your mortgage, I am here to help!

 

B-lenders are large Canadian institutions offering a variety of mortgage products. Clients that fall into the B category would be missing one of the major components that the banks and other major financial lenders require,  something like income or good credit. B Lending is a popular and proven source of lending in Canada. It should be noted that interest rates on B lenders are higher than traditional, but not by that much as they are normally only between 1 and 2 percent. Normally this type of lending is a short term, and is helpful for the client, as it helps get their credit back in line and are able to qualify with a traditional mortgage lender.

 

One of the main things you should be asking yourself is if this loan makes sense for your current situation. This is where I’ll be able to help with your current situation and I’ll be able to thoroughly study all of your options and assist in helping you make the right choice for your unique needs and situation. Unfortunately, homebuyers with bad credit will typically pay a higher interest rate than somebody with excellent credit because they’re seen as a greater risk. However, I’ll aim to find the best options for your loan.

 

More and more clients are getting turned away from big banks when it comes to mortgage financing. If you have been turned away from the big banks because you don’t fit into one of their cookie cutter molds, I can help! Feel free to contact me for some advice about your mortgage.

1 Feb

Christmas and Credit

General

Posted by: Brent Adair

Credit companies are in the business of making money, some of it in the form of high interest charges on bills not paid back within 30 days. So why not look at a few tips to help you reduce the future cost of using your credit card? Here are a few helpful tips:

 

If you can’t pay the bill, always pay the minimum

This sounds obvious, however you would be surprised by the amount of times a person misses the minimum payment and how this can negatively hurt your credit score. The little things really do matter when it comes to protecting and improving credit scores.

 

Just a reminder that if you do pay the minimum after the due date, you are late. Not only will you be paying the additional high interest rate, but your credit card company will also report your late payment to credit agencies like Equifax and Trans Union. These services rate your credit worthiness and share this information with any lender you may deal with.

 

When you pay on time, you are rated at “R1”, which is perfect! Pay 30 days late? You will get an “R2” rating. Pay later than that, and it keeps getting worse. The more frequently you pay your bills late, the worse the impact on your credit score, and that impacts the terms upon which you can borrow. A credit score of 800 is excellent, 675 is average, and below 600 is problematic when you need to borrow money.

 

Always carry less than 70% of your credit card limit

Here’s a little secret, even if you pay your credit card on time and are a “R1” rated, when you carry more than 70% of your available credit limit as your balance, credit bureaus use an algorithm that will end up actually rating you as a higher credit risk. This of course will negatively impact your credit score.

 

Do everything you can to not carry an outstanding balance on you credit card. If you can’t pay your full balance, keep your balance under 70% of your credit limit. If you can’t do that, be sure to pay your minimum on time (or early). When you do these things, you will improve your credit score. That will give you better borrowing options and save you a ton on fees.

1 Feb

What Happens When Interest Rates Increase During the Home Buying Process

Mortgage Tips

Posted by: Brent Adair

As exciting as it can be while looking for a home, the next big thing to look out for is ensuring that you are getting the best mortgage rate possible without worrying about the rate increasing. However what can happen if the mortgage rate increases while looking for a home?

 

If the rates decrease, consider yourself lucky! However if the rates increase and your mortgage agent has previously advised you that you just barely qualify, it might be difficult to get the home you originally wanted.

 

Let’s have a quick look at two different cases below.

 

Case # 1: Purchasing a mortgage without pre-approval

Let’s say, you buy a home for $625,000 and your down payment is (20%) $125,000 your 5 year fixed-rate is 2.84% amortized at 25 years which works out to around $2,325/month. Now if you were to hold off on purchasing the home and rates do rise to let’s say to 3.34%, your monthly payment will then be $ 2,454.

Although it is very difficult to conclude that rates will change, some predict that interest rates will rise in the future. You really don’t have anything to lose by locking in your rate because it’s only a pre-approval and you will not be stuck with it.

Case # 2: Pre-approval on a variable mortgage rate

After being pre-approved on a variable rate mortgage remember the rate is not guaranteed, if there’s an increase in the prime rate. The only guarantee is the discount to the prime rate,if your lender reduces the discount to all their clients.

Let’s have a look at this example in more detail. How much more you will have to pay if prime rate goes up in the middle of you buying a home. Let’s say today’s prime rate is 3.2%. If the discount is prime rate – 0.45%, your rate will be 2.75% (3.2% – 0.45%) We have used the same purchase and DP as in case #1 giving you a monthly mortgage payment of $2,303.

If you are thinking about buying a home and the rates do rise, ensure that you get pre approved. This will protect you from the increase if the fixed rate is what you are looking for. For a variable rate, it may not protect you from the rates, it will allow you keep the discount to prime if your lender reduces the discount.

 

 

1 Feb

Home Hunting Tips

General

Posted by: Brent Adair

Finding the right home for you and your loved ones comes down to three different factors:

 

Affordability

Does the home fit in your budget? One thing you can do is find out how much you can qualify for through a mortgage pre-apporval. When you are looking at homes, have you factored in other expenses like utilities, mortgage insurance and taxes?

 

Lifestyle

Is the home located in an area within the proximity of the amenities you and your family require? Will owning this home impede you from doing the things you love doing? Are you close enough to work, family and friends?

 

Future Needs

Are kids a possibility in the future? Is the home large enough for a family? Is the basement developed? Are there schools nearby? Or, if you are close to retirement, is the home too large? Are there too many stairs and floors in the home to negotiate?

 

The three considerations that are listed above will help you narrow down your home buying search. When you are looking, make sure that your home purchase doesn’t leave you house poor and that you have a financial plan for emergencies.

 

Real estate agents and mortgage brokers are available to make the home hunting easier. A mortgage broker will pinpoint your budget and secure the best mortgage rate available for you for up to 90 days, while you shop around the housing market. A professional real estate agent will consider your home needs and show you only homes that fit both the budget and requirements you have given them.

Remember to stay on track. Rule out the homes that exceed your budget or will possibly present problems down the line. If it is possible that you will need another bedroom in a few years, look for a home that accommodates that.

If you are shopping for a condominium or townhouse, ensure that you know what the association fees are and what they include. Condominium fees can sometimes equate a monthly rent, and not provide more than common area maintenance. Assure you are comfortable with the fees and that the services they provide are beneficial.

Try to minimize your viewings to only three per day, and take pictures and notes on the features you like, or the items you think could pose concerns in the future. Just ensure that the home is within your financial means and will accommodate your lifestyle and future needs before you make a legally binding offer.

1 Feb

Subsidy Programs for Renovating

Mortgage Tips

Posted by: Brent Adair

Have you recently been looking around your house and started to think maybe you should make a few changes to the place? There are plenty of grants available for Ontario residents that will help you save money, if you are looking to make your home more energy efficient and reduce your carbon footprint

 

Senior’s Homeowner Grants

 

Ontario Senior Homeowners Property Tax Grant

This grant gives seniors a rebate of up to $500, however if your income is more than $50,000 you are unable to get this grant.

Provincial Land Tax Deferral Program for Low Income Seniors and Low Income Persons with Disabilities

If your property was used as your principal residence for at least one year. You could qualify to have your entire provincial land tax deferred.

Disabled Homeowner Grants

Home and Vehicle Modification

If you are making modifications to your home or vehicle to accommodate a disability, you can receive up to $15,000.

 

Easter Seals Financial Assistance

Children up to the age of 19 with mobility issues

Easter seals will provide up to $3,000 to help with home renovations or equipment, that is not covered by the Ministry of Health Assistive Devices Program

 

Low Income Homeowner Grants

Ontario Energy and Property Tax Credit

Seniors and Students can qualify for this. Seniors can receive up to $1,165 and students can receive a credit of $25 if any of their costs were related to energy.

 

Ontario Electricity Support Program

This is an application program for a reduction in the energy bills.

Each rebate is based upon the household. As an example a household making less than $39,000 a year could get a $34 credit on their energy bill.

 

First Time Homeowner Grants

 

First Time Home buyer Tax Credit

This tax credit can give you up to $5,000 of tax relief from the federal government

This tax credit applies to first time homebuyers and anyone with a disability from buying a home, that has special conditions.

 

RRSP Home Buyers’ Plan

This programs allows you up to $25,000 from your RRSP to buy or build a new home

This can also be used to buy or build a home for yourself or someone you know with a disability

 

Low-Income Energy Assistance Program

You can apply for this rebate when you pay the land transfer tax if you are a first time home buyer

Starting January 1, 2017 the most you can receive is $4,000

This is only available to anyone that has never owned a home before

 

GST/HST Rebate

New housing rebates may also be available for some of the GST/HST paid if you did any of the following:

  • purchased new housing or constructed or substantially renovated housing, which could include housing on leased land (if the lease is for at least 20 years or gives you the option to buy the land), for use as your (or your relation’s) primary place of residence
  • purchased shares in a co-operative housing (co-op) complex for the purpose of using a unit in the co-op for use as your (or your relation’s) primary place of residence
  • constructed or substantially renovated your own home, or hired someone else to construct or substantially renovate your home for use as your (or your relation’s) primary place of residence and the fair market value of the house when the construction is substantially completed is less than $450,000

 

1 Feb

How to Purchase Your First Home

Mortgage Tips

Posted by: Brent Adair

Save Up For Your Down Payment

One of the best practices would be to save up at least 5% for your first home mortgage down payment. A helpful tip is that the higher the down payment is, the more likely a lender would be to help finance your purchase. 

 

Creating a Budget

Creating a budget of your monthly expenses and helps to outline how much money you have leftover each month, this will help you understand how much you can afford for mortgage payments.

 

Calculate Your Maximum Mortgage Amount

Use this mortgage calculator to determine how much you can afford on the financing for your first home.  

 

Get Preapproved before you start house hunting

You can contact a lender and have a hold on a low interest rate for 90 to 120 days. This preapproval is a written commitment from the lender that states the maximum amount they are willing to lend you at a particular interest rate. There are no obligations to follow through with this, however if interest rates are lower within 30 days of your purchased home closing date, you will receive the lower interest rate.

 

Find the house you were looking for and make an offer

Once your pre approval is in place, you can begin to shop around for that home you have always been looking for. It is always important to make an offer conditional on financing, as some situations might change.

 

Get approved for a mortgage commitment offer

Once your offer is accepted, contact your mortgage specialist and make sure you are officially approved by the lender. This step will make sure that you get a written commitment that guarantees the lender will finance your home purchase.  

 

While these are some of the basic steps in the home purchasing process, you might have some questions about things that aren’t covered above or you might have further questions. Feel free to contact me if you do have any questions about purchasing your first home!

1 Feb

How to Finance a Fixer Upper

Mortgage Tips

Posted by: Brent Adair

Thinking of buying a fixer upper? Below you will find some helpful tips and tricks on getting that home you always wanted and that fits all your needs, it just needs some TLC!

 

Many people inside and outside of the GTA find themselves in the same boat: you’ve found the property that you want, but you’d like to make some upgrades and repairs to it. Think of this process as a mortgage for fixer uppers and it is quite straightforward.

Purchase Plus Improvement Mortgage

The purchase plus improvement mortgage is the perfect way to buy a home and end up with a place that suits your needs and lifestyle. This type of mortgage covers the purchase price of your home, plus any renovations that would increase the value, with as little down payment as 5 per cent of the final, improved property value. Below are the main steps you will need to take.

 

Try to include a longer financing clause in your offer, if it is possible

This might not always be possible, but you should try for a longer financing clause, once you have found a home that is ideal for you. This should help get quotes from contractors and lender approval on the improvements.

 

Get written estimates

At the same time you submit your application for approval with the lender, you will also need to include a written quote(s) from one or more licensed contractors. The quotes should include the scope of the work that will be done and the costs associated with this work.

 

Get your appraisal
You will need to get an appraisal done if the work you plan on doing is over $10,000. The appraiser will provide two separate valuations of the house: the first is the value of the property “as is” and the second is the estimated value of the property after the improvements are completed. The appraiser will also want to see quotes you have obtained from contractors in regards to improvements or repairs.  

 

Renovation costs are included in the mortgage

Your lender will add the estimated costs of the renovation into your mortgage. At closing, you’ll need to provide the full down payment amount, based on the expected improved value. The committed amount of the mortgage will be advanced to your real estate lawyer, who will be instructed to hold back the renovation funds until the work has been completed and inspected.

 

Complete your upgrades!

Once you’ve taken possession of your property, the work begins! Your contractor(s) will begin work on the renovations. Note that you will need to have access to enough funds to pay the contractors as agreed.

1 Feb

Benefits of Home Insurance

General

Posted by: Brent Adair

Have you just purchased a home and are thinking about home insurance? Home insurance can be a lifesaver, especially when mother nature strikes. There are many types of home insurance currently available in the marketplace.

 

Unlike auto insurance, home insurance is not mandatory by law. However most banks or mortgage holders will insist you get home insurance before they’ll lend you money to purchase the home.

 

Coverage

Coverage of home insurance can vary from one insurer to the next. So it is important to select a policy that suits your specific needs. Home insurance covers the dwelling, contents, and personal liability (the policy holder), your spouse or partner and your children. It also covers Dependants under the age of 18 and dependants who are students enrolled and actually attending a school, college or university and living in the household or temporarily living away from the insured principal residence. Home insurance can also cover additional living expenses in the event you are temporarily unable to live in your home due to an insured loss in certain circumstances.

 

Make sure to contact your insurance professional if you plan on doing any of the following:

  • Before you make any changes to your property you should contact your insurance professional
  • Renovate your home
  • Installing a pool or spa
  • Setting up a home based business (Something like a daycare)
  • Leasing all or a portion of your property
  • Purchasing jewelry or art
  • Keeping your insurance company informed with an accurate and up to date description of your home and contents can help speed up the claims settlement after a loss.

 

If you can’t afford to replace absolutely everything you own in your home after an unforeseen event, consider the following tips:

  • Insurance for rebuilding costs
  • Make sure to confirm accurate replacement value
  • Review the inventory in your home every year when you renew your policy
  • For high valued art or jewelry it is best to have a separate endorsement for these items

 

Home insurance protects you from having to pay all at once to replace what was lost, this of course can be hard especially during an emotional time.