Welcome to the March issue of my monthly newsletter!

 

Going through a divorce doesn’t mean you have to split from your home

When we tie the knot with our soulmate, we assume it’s going to be forever. It’s pretty much written in the vows. Unfortunately, not all marriages have fairytale endings. In fact, a very significant amount of marriages in Canada end in divorce. The most recent data suggests 38 percent of all marriages in Canada don’t last until death. The average marriage lasts 14 years, with 42 percent of divorces occurring in marriages between the 10th and 24th year.

Spousal Buyout

A typical divorce scenario sees that when the couple breaks up, they sell the matrimonial home and split the assets. In almost all cases, even when one party wants to keep the home, the lawyers, the banks and professionals usually suggest selling the home. It makes sense since most couples get a mortgage they can afford together, not on their own.  However, there is a unique alternative very few professionals even know exists.

All three of Canada’s mortgage insurance providers, Canada Mortgage and Housing Corporation, Genworth Financial and Canada Guaranty, offer what’s called a spousal buyout program.  Through this program, one party can refinance the matrimonial home up to 95 percent of its appraised value, and pay out any debts related to the marriage.

Traditionally, you can only refinance on an existing mortgage up to 80 percent of the appraised value.

The program is considered a purchase, so all the requirements and qualifications needed in a traditional mortgage still apply. In this case, you will also need a purchase agreement and a separation agreement with all the debts and payments spelled out.

The spousal buyout program is a one-time opportunity. It can be used to pay off other debts outside the separation agreement, but it depends on which one of the three insurers you use.

Even with a helpful loan-to-value ratio, some people still can’t afford to take on the home on their own. The program also allows people to bring on a cosigner, often a new partner or family member.

Speak to a Professional

At the end of the day, divorce is unfortunate. The programs allow you to keep your home, and your kids can stay where they’ve grown up. And that makes the situation at least somewhat more bearable.

If you do find yourself in a divorce and you’re not sure what to do about your home, contact a mortgage broker before making any decisions. They can help you.

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Insurance products when you own a home

When it comes to your home, be prepared to be bombarded by a number of insurance products to keep you protected. While it can seem overwhelming, it’s a good idea to get familiar with the basics of some of the insurance you will either need to have, or choose as an option.

Title Insurance

Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership. It is not a requirement in many parts of Canada, but don’t dismiss it outright.

Title Insurance can protect you from existing liens on the property’s title, but it’s most common use is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him/herself without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. Title Insurance is a one-time fee or premium with the cost based on the value of your property. You can purchase title insurance through your lawyer or a title insurance company like First Canadian Title Company.

Mortgage Protection Insurance

Just before you sign off on your mortgage, your broker is required to tell you about mortgage protection insurance. While this insurance is also optional, don’t dismiss it outright. Almost every broker has a story of someone who passed on the extra coverage and tragedy hit. The majority of people skip over getting mortgage insurance for two reasons: they don’t want to spend the money, or they already have some type of life insurance policy through work.

But if you have spouse and kids, you need to think about whether they can carry on with the mortgage payment. If they can’t they’ll be forced to sell. For a few dollars a month extra, it may not be a bad idea.  While you think you may be covered through your work, you need to take a closer look at the policy.

Mortgage insurance is a debt replacement while life insurance is an income replacement. You need to understand the difference. You also need to see just how much you’re going to get through your life insurance policy. 

Property/fire insurance

Before you close on your home, your lender is going to require you have home insurance. While there are different types of coverage, home insurance generally covers you from damage to the home that is accidental or unexpected like a fire. It can also cover the contents of the home depending on your insurance package. If you’re buying a condo or strata, you’re also going to need similar condo insurance that covers you for your unit.

Consider this

Just because you have home insurance doesn’t mean you’re covered in the event of a flood or earthquake. Depending on where you live, you may need to purchase additional coverage to be protected from a natural disaster. It’s best to talk to your insurance provider to make sure you’ve got the coverage you need.

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Homeowner Tips

Burglary Prevention:

Whether you’re home or away on vacation, a few simple precautions can make your home less attractive to burglars. These include: Ensuring your outdoor lighting illuminates all entrances to your home; Cutting back shrubbery discourages burglars from hiding near window and doors; Keeping windows and doors locked at all times; Making certain your garage door is closed and locked; Installing a peephole in your front door; Securing windows and sliding glass doors with auxiliary locks (special door pins, available at home improvement stores, can prevent your sliding doors from being lifted from their tracks during a burglary attempt); Installing deadbolt locks on all exterior doors; and never hiding or storing keys or tools outside.

 

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DID YOU KNOW…

The Home Buyers’ Plan (HBP) is a program for first-time homebuyers that allows you to withdraw funds from your RRSPs to buy or build a home. You can withdraw up to $25,000 tax-free ($50,000 for a couple). Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You’ll have to repay an amount to your RRSPs each year until your HBP balance is zero. If you don’t repay the amount due for a year, it will have to be included in your income for that year.

Welcome to the February issue of my monthly newsletter!

The ABCs of
Alternative Lending

Most homebuyers want the best mortgage rate possible. That usually means turning to either the big banks, credit unions, or monoline lenders. In the mortgage business, these lenders a typically called “A” lenders. If you’ve got good credit, a good job and decent down payment, you’re probably looking at one of these A lenders.  However, there are some people who don’t fit into conventional lending.  That’s where you might hear the term Alt-A, or alternative lender.  With the addition of tougher mortgage rules and stress tests, more people are turning to an alternative lender out of necessity.

What’s an alternative lender? What is alternative lending?

What’s an alternative lender? An alternative lender is a mortgage company offering mortgage financing with different guidelines on credit and debt servicing.  These lenders are backed by investors. They will focus more on the property and exit strategy.  If someone has enough equity, there’s always a lender who can assist with financing.

Alternative lenders are typically there for people coming out of a bankruptcy, with bruised credit.  Those who are self-employed and need to prove some sort of cash flow also use these type of lenders.

Borrowers will generally need to have a minimum of 20 to 25 percent down.  In addition, there will be applicable lender and broker fees. Rates will be higher than conventional lenders, but the rates may not be as high as you think. Some Alt-A lenders are offering one-year rates between 4.35 and 5.8 percent. And using an Alt-A lender can be a great stepping stone to getting back into a conventional mortgage with the best-discounted rate and no fees.

If you find yourself on the outside of conventional lending, a well-qualified mortgage professional can help you navigate the alternative lending space to help you get the best product that fits your needs.

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Qualified to make
sure you qualify

If you need open-heart surgery, you want to be sure the doctor in the operating room knows what they’re doing. You want to know they’ve got the professional education, skills and experience to carry out the life-saving procedure.

You would expect nothing less from the person handling the biggest financial decision of your life – your mortgage broker.

Though a mortgage broker doesn’t need quite the same qualifications as a heart surgeon, there are still rigorous standards each mortgage professional must meet to do their job.

While regulations can vary in each province, mortgage professionals need to be registered with a government body.  They must be licensed to carry out broker activities.

First, each broker must complete a provincially approved course for mortgage brokering. These courses are offered through various colleges and institutions and can take days or months to complete. In Ontario, for instance, after completing the course, aspiring brokers need to be hired by a Financial Services Commission of Ontario licensed brokerage.  The brokerage applies to the commission for that particular broker’s licence.

Consumers can take comfort in knowing that their mortgage broker has gone through a rigorous screening process before they have any contact with them. The standards in place are also good at weeding out people in the industry.

There are a number of online resources available to the public through the various licensing agencies. Don’t be afraid to ask your mortgage broker about their background.  They’ll be more than proud to share with you their qualifications.

 

Homeowner
Tips

Homeowner Insurance:

Much like car insurance, the higher the deductible you choose, the lower the annual premiums will be on your home insurance. But the problem with selecting a high deductible is that smaller claims/problems such as broken windows or damaged sheetrock from a leaky pipe, which will typically cost only a few hundred dollars to fix, will most likely be absorbed by you as the homeowner.

 

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DID YOU KNOW…

Now is the perfect time of year for a free mortgage check-up.  Spring is on its way and interest rates are still hovering near historic lows.  It makes sense for us to revisit your mortgage and ensure it still meets your needs.

Perhaps you’ve been thinking about refinancing to consolidate debt, purchasing a rental or vacation property, or you simply want to take a vacation. Whatever your needs, we can evaluate your situation and help you determine what’s right for you.

Welcome to the January issue of my monthly newsletter!

Staying Cool
in the 2019 Market

With each New Year, comes the promise of renewal. But for some, the changing calendar can bring anxiety. Especially when it comes to finances. And if you’re getting all worried about mortgage rates after seeing frequent increases the last 18 months, you really shouldn’t fret, and here’s why.

We’ve been spoiled as borrowers for years. Interest rates have been at generational lows for some time. It’s given many of us the opportunity to get into the housing market and find our dream homes. But what goes down must always come up? Maybe that’s not completely correct, but it was only a matter of time before rates climbed back to a more traditional area. As we left 2018, the Bank of Canada rate was 1 3/4 percent. The reality is, if the economists have it right, rates are going to continue to rise for the next 12 to 24 months. The best fixed-rate mortgage could be at six percent when all is said and done.

So rather than be scared, be educated.

Fixed rates are typically tied to the world economy where the variable rate is linked to the Canadian economy. When the economy is stable, variable rates will remain low to stimulate buying.

Adding to the rise in rates are the government stress test rules. In the fall of 2017, OSFI, (the Office of Superintendent of Financial Institutions) the agency that regulates the financial industry, announced tighter rules on mortgages. The biggest change related to uninsured mortgages, or homebuyers with 20 percent or more for a down payment. These people are now required to go through a “stress test” or qualify using a minimum qualifying rate.

The changes came a year after a similar stress test was introduced for insured mortgages.

It will be up to the federal government if the rise in rates will make them reconsider the stress tests in place. But unless something changes, rates are going to rise. It’s important to keep in mind, a quarter-point increase in the BOC rate equates to $13 on every $100,000 of mortgage. It’s not insignificant, especially if you’re carrying a million dollar mortgage, but it’s also very survivable.

Rates are the only thing we have no control over.

In fact, the rates are the only thing we have no control over. There are some things you can do to take the power back. If you’re carrying some hefty credit and consumer debt, a refinance is something to consider. Yes, refinancing your mortgage mid-cycle might mean you lose that ultra-low rate you got a couple years ago, but getting rid of your high-interest debt could save you thousands a year.

It may also be the time to have a conversation with your mortgage broker about a transfer. If you got a mortgage prior to 2016, making a switch and resetting your amortization at the rates now may be better than waiting a couple years when your mortgage is up for renewal.

Don’t get hung up on what the rates are doing and where they’re at. There are lots of things to consider, but fear isn’t one of them.

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Making 2019
Your Turnaround Year

It’s become a bit of a cliché to talk about resolutions at the start of the New Year. You’re going to be inundated with pitches to exercise more, “eat right” or pick up a new hobby. These resolutions start out with the best of intentions but ultimately most of us can’t manage to keep them. Within a few days or weeks, we’re back to our old habits. Perhaps only a psychiatrist knows why we can’t keep our resolutions. While giving up the sweets might seem like an impossible task, getting into some good financial habits at the start of the year is easier than you think. And there is no better time to look at what you might be doing right and perhaps wrong when it comes to your finances and make a change to see a more prosperous 2019.

These are by no means brand new ideas but rather tried and tested concepts worth considering.

• Set and write down your financial goals for the year. Having these goals written down will help you stay on task. Review them as often as you need to.
• Review your household budget. Sometimes we get caught off guard by just how much money we’re spending every month. Take a good look at those expenses, and if there are a few items you can cut, go for it. Everyone has something they spend their money on they think they can’t live without. But being fiscally responsible takes some discipline.
• Pay down your credit cards. Credit can be a great thing. It helps get you out of a bind when you need it, or help with an important purchase you can pay for later. But having too much credit-card debt can hurt in the long run. Try to pay off as much of your credit-card debt as you can. Every little bit helps.
• Plan for an annual review day. That means sitting down with your accountant, financial planner, even your mortgage broker to see where you are with your finances. Can you pay a little more for your mortgage? Is there a new government policy or an investment that you haven’t heard about from which you could benefit? Financial professionals are up to speed on all the latest options and can advise you accordingly.
• Be realistic. We’re constantly squeezed between the things we want to buy and the bills we have to pay. You’re not likely going to go from zero to hero financially in a month, but taking a few easy steps, making good choices and chipping away at your debt will start to pay off.

These are just some basic tips to follow. With so many experts and places to look for financial advice, there’s really no excuse not to use the turn of the calendar to get started.

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Homeowner
Tips

Let the heat reach you:

Dust or vacuum radiators, baseboard heaters and furnace duct openings often and keep them free from obstructions such as furniture, carpets and drapes.

Replace/Clean Furnace Filters:

Check and clean or replace furnace air filters each month during the heating season. Ventilation system filters, such as those for heat recovery ventilators, should be checked every two months.

 

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DID YOU KNOW…

The majority of wealthier Canadians mortgage their homes by choice. 67% of high net worth Canadians (those with $500,000 or more in investable assets) with a mortgage have the cash to pay off their home – in full – but don’t, according to a survey for Investors Group. Their reasons for holding on to their mortgage vary, including tax planning and income-generating rental properties. In Canada, mortgage interest on rental properties is tax deductible.

 At Dominion Lending Centres #Ontariolend we strive to provide you with the best information so you can take confident steps in home ownership. Do the Mortgage Check-up! In this blog, we will discuss the reasons why you should complete a mortgage checkup and items to be aware of. With the industry changing, it is always best to make sure your most expensive asset is performing at it’s best. The topics are, Time for a mortgage check-up, Using your prepayment privileges, locking in or staying variable, breaking your mortgage easy, renewing your mortgage, the art of leveraging, and finally, what can kill the mortgage process. 

Is it time for a mortgage check-up?

It’s most likely been another busy year for you; when is it not right? While there’s so much to do, there is never a bad time to reflect on your finances, more specifically your mortgage. Maybe you’ve had your mortgage for a couple years and it’s not top of mind. But things have not only changed in the mortgage industry but also likely your own finances.

If you’re paying more than four percent on any debts, now’s the time to look and possibly refinance the debt into your mortgage.

Mortgage Brokers work on so many files where people don’t realize their consumer debt is handcuffing and limiting them on what they’re able to do.

Their clients are concerned they’ll pay a penalty to refinance or lose their rate, but they don’t look at the long-term picture and realize how much they can save.

Yes, it’s gotten harder to refinance with all the government regulations and stress tests, but it can be done and it might save you money. Just remember, if you do decide to get rid of the consumer debt, like your credit cards or lines of credit. If you are consolidating your debt then you need to take proactive steps to ensure you don’t go down the “debt” hole again.

Once you’ve consolidated, look at your trade lines and keep what you need, not what you want and change spending behaviours where you can.

If you’re feeling good about your financial situation and have a little extra cash each month, consider your payment privileges. 

If you do have prepayment privileges, accelerated payments are fantastic if you use them.

These are just a couple ways a mortgage check up can help save you some money and get you on the right path for this year and years to come.

 

Using your prepayment privileges

You could say a mortgage has a personality. While it might seem like an unusual way to describe what is basically a financial transaction, it’s actually apt. Mortgages do have personalities. That’s because there are so many details and aspects to any mortgage. And if you’re about to sign on the dotted line, it’s important to get to know the personality of the mortgage before you do.

One feature of a mortgage is accelerated payments or prepayment privileges.

Before we get into all the great things that can come from accelerated payments, you need to know that not every mortgage will have prepayment privileges. It comes back to the mortgage personality; no-frill mortgages that have super low rates may seem tempting, but you probably won’t get other benefits, like prepayment privileges. You need to make sure your mortgage broker explains all the personalities of your mortgage. Do the Mortgage Check-up!

If you do have these prepayment privileges, accelerated payments are fantastic if you use them.

A full-frill mortgage product could have a number of prepayment privileges. This could include accelerated payments of up to 20 percent of your monthly payment, double monthly payments, and annual payments of up to 20 percent of the full loan amount.

You might be surprised how much time you can knock off your mortgage by accelerated payments.

For example, on a 30-year mortgage, a one-time 10 percent increase on your monthly payment can shave four years off your mortgage. If you bumped up your payment by 10 percent each year, you would be mortgage free in 13 years. If 10 percent is too high, five percent gets you mortgage free in 18 years.

Making a double mortgage payment once a year can also cut four years off your mortgage.

Don’t forget, anything you put down also goes directly to the principal of the mortgage rather than the interest. Time perhaps for the Mortgage Check-up!

If you’re signing on to a new mortgage, you might be thinking of a short amortization period, like 10 years, because you don’t want to be making mortgage payments well into your golden years. No one really does. But that’s where accelerated payments can pick up the slack.

Instead, it’s worth considering taking that 25 or 30-year mortgage and using accelerated payments to make up the difference.

If life throws you a curveball and you’re in a short amortization period like 10 years, you may find yourself stretching to make payments. Do the Mortgage Check-up!

Rather than setting a shorter amortization and a payment you’re contracted to make, use prepayment privileges and accelerated payments to get the amortization you can control, rather than the payments controlling you.

While the benefits are literally in front of your face, statistically, not many people will choose to make accelerated payments once the mortgage gets going. If you really want to take advantage, set up accelerated payments the day you sign your mortgage.

Your mortgage broker can give you all the details you need to make the best decision for your  Mortgage Check-up!

 

Should I lock in, or stay variable? Let’s do the mortgage check-up!

If you follow the news closely, there would appear to be a lot of turmoil and uncertainty around interest rates. Lately, the Bank of Canada held the overnight rate, suggesting it was closely watching inflation and wage growth.

“The Bank will also continue to monitor the economy’s sensitivity to interest rate movements and the evolution of economic capacity. In this context, the Governing Council will remain cautious with respect to future policy adjustments, guided by incoming data,” the BOC said at the time.

The Bank of Canada raised the rates a quarter point twice last year. Many economists are betting the bank will do the same before the end of the year. Do the Mortgage Check-up!

If you’re a conservative homeowner and have locked into a fixed rate, the speculation of an increase isn’t likely keeping you up at night. You can rest easy for the next few years.

But if you’re like many Canadians who chose to go variable, these creeping increases are probably getting you a little nervous. While mortgage brokers don’t have a crystal ball to tell you where rates are going. There are all kinds of tea leaves economists are trying to read to get a handle on where the rates will go. While that’s what they get paid to do, increases have real-world consequences on your bottom line.

So now the question you may be asking is, should I lock into a fixed rate, or ride out my variable?

And like many financial questions, there’s no easy answer.

First, you’ll tend to find most first time homebuyers are a little skittish at going variable anyway. While someone in their second or third mortgage may have an appetite for a little more risk. 

If you’re kept wide awake at night in fear of a rate increase, you may want to lock in. There is something to be said for peace of mind, and locking in your rate can certainly give you that.

But it’s also important to look at the big picture. If we assume the pundits are right and the rate goes up about a couple more quarter points, you still need to look at what that variable rate saved you over the term.

The rates have been historically so low, there’s a pretty good chance if you’ve been in a variable for a few years. The math will prove you still saved money over the five years, even with an increase. Depending on your risk appetite and your financial situation, staying in the variable could still pay off in the long run even with a few more increases.

Another consideration is if you are thinking of cancelling your mortgage early, you are better off staying in a variable rate. Do your Mortgage Check-up!

Statistics show 60% of Canadians cancel their mortgage before their term is up for renewal.

A variable rate cancellation fee is usually lower than a fixed rate cancellation fee, so your best option is to remain in your variable term.

But these decisions are best not made alone. Speak to a mortgage professional if you have any questions about locking in or not and they can help you make the best decision.

 

Breaking up with your mortgage can be hard to do

It’s hard to look past what’s right in front of you. That can be said for a lot of things in life, including a mortgage.

So it should come as no surprise that roughly six-in-10 homeowners with the standard five-year fixed rate mortgage break their terms within three years. And as brokers, we’ve heard all of the reasons. Some are good and some are less fortunate. There are those who want to leverage recent large increased in property value for investment terms, or they want to get some equity out of their home to do some renovations. In other cases, it can be life events like divorce, new relationship, the kids going off to college, or just paying down some built up credit card or consumer debt. Some people are lucky enough to be in a position to pay off the mortgage early.

In fact, if you’re reading this and have had a mortgage long enough, one of the things listed above has probably come into your life. But they all come at a cost. So as you sit down to either renew or get a new mortgage, take some time to think about the future. Not five months ahead, but five, seven or even 10 years ahead. Do you Mortgage Check-up!

If you’re really not sure what the future that far away is going to look like, you need to consider some options before you sign on the dotted line. It could save you money.

If you’re a fixed-rate person, it’s important to understand how your lender is going to calculate the penalty when you break the mortgage.

Big banks calculate penalties based on the discount they gave you off of their posted rates at the time you first got your mortgage. They take their new posted rate for the amount of time you have left in your mortgage (3-years, 4-years etc.), apply the same Discount they first gave you and then calculate how much interest they would lose as the difference between the two for the rest of the term calculated on your current balance. That is your penalty and it can be quite hefty.

But other lenders like credit unions will use the interest rate differential or three-month interest penalty.

What can you do? You could sign on for a fixed-year rate for a shorter term, like three years. That just obviously shortens the length of the mortgage. Or you can also consider a variable rate since the penalties to break the term are much lower.

While it may be tempting to just stick with the big bank, you’ll want to talk to a mortgage broker first. Mortgage brokers have access to all kinds of lenders from credit unions to monolines and institutions. A mortgage broker can arrange better terms if you do need to cancel your mortgage early.

 

Renewing your mortgage at the end of term

It can come as a pretty surprising statistic. About 60 percent of mortgages don’t make it to the end of the term. That means a large majority of homeowners for various reasons are ending their mortgages early. But it also means there are still a lot of people out there who will keep their mortgage until it’s time to renew. And if you’re in the second boat, you might be asking yourself what this process is going to look like, and perhaps, what should you do?

For starters, most lenders, especially the big banks will send you a renewal letter when there are about three months left on the term. Sometimes that letter could come with six months left. Typically, the lender will offer you a rate at that time and all you’ll have to do is sign at the bottom line to roll over your mortgage.

But beware, lenders often offer a higher rate than a new client because they’re hoping the ease of renewal will keep you from seeking out a new lender and lower rate.

Before you sign, it’s always best to call a mortgage broker. A good broker will consider your situation and advise you of the best course of action.

In some cases, it may be best to just sign and roll over your mortgage. There are a few things to consider. If you decide to change lenders, you’ll basically have to go through an approval process again. That entails getting all your documents, lawyer’s fees, and a possible appraisal.

You’ll have to ask yourself, is it worth the effort to save a few basis points off your rate or a few hundred dollars over a term to make the switch?

For some, it won’t be. But, if a switch can lead to saving thousands of dollars, it would certainly be something to consider. While everyone’s situation is different, the larger the mortgage, the bigger the savings will be if you can find a lower rate. Do the Mortgage Check-up!

Often, homeowners will just use a bank their parents recommend for their first mortgage. But they might find themselves not happy with the service or terms of the mortgage and may just want to switch to a different lender as the mortgage comes up for renewal.

If that’s a situation you find yourself in, you have options, and a mortgage broker can help you make the best decision.

 

The art of leveraging

For some people, just owning one property and having a single mortgage is enough to handle. But for others, homeownership can be a gateway to owning multiple investment properties. You might be thinking: there’s no way I can turn the value of my modest home into a real estate empire. Ok, maybe not an empire, but you can take the equity of your home and, with the right investment, get a return far greater than a stock portfolio.

Most people are trained to stay out of debt and don’t want to consider using the equity in their home to buy an investment property. But they haven’t realized the art of leveraging.

If you’re using equity from your primary residence to buy an investment property, keep in mind that the interest you’re using is tax deductible. Consider you’re also buying an appreciating asset, and if you put a real estate portfolio to a stock portfolio side-by-side, they don’t compare.

Who is a good candidate? You might be surprised to learn you don’t need to make six figures to get into the game.

Essentially, you just have to be someone who wants to be a little smarter with their down payment.

Before you go down that road, there are some quick things you need to know. With investment properties, the minimum down payment will jump to 20 or 25 percent from five percent. Rental income from the property can be used to debt service the mortgage application, while some lenders will have a minimum liquid net worth requirement outside of the property.

Most lenders also limit the number of mortgages in a portfolio. Usually, after five mortgages, you’ll be considered a commercial file. However, a mortgage broker can work with other lenders to increase the number of investment properties.

Typically, when you’re considering a mortgage, you’re looking at the rate. But the rate is less important compared to your cash flow and future equity position. If it all sounds like a bit much, consulting a mortgage professional with an understanding of investment financing is the best way to start.

Most people who get into investment real estate think they’ll only end up buying one property, but that’s not usually the case. A broker will prep you for a 10-year plan of purchasing property and position you accordingly. A broker will also have a good understanding of the alt-side of lending and how you can benefit from that type of financing.

A mortgage broker with the right experience and understanding of financing rental properties can be an invaluable resource. Do the Mortgage Check-up!

Ways to kill your home financing. Do the Mortgage Check-up!

Finally, we would like to discuss the problems that can arise during the mortgage process. We do make the mortgage process easy and hold a high level of integrity with every mortgage. In order to achieve this level of award-winning success, we must always keep you informed on what you can not do during the mortgage approval process. 

Does this situation sound familiar? You’ve found your forever home, you’ve been approved and completed all your mortgage paperwork. You think you’re done and now you want to buy a whole bunch of furniture for the new abode. Or, perhaps you’ve been eyeing a new car or even a new job at the same time. It seems pretty reasonable to make a life change or purchase, after all, you’ve been approved. What could go wrong you ask? You could sink your mortgage faster than a leaky boat.

People mistakenly believe once they’ve been pre-approved or approved by a lender it’s all done. But they don’t realize that a lender may pull their credit 30 days prior to close. They also don’t realize lenders can request updated documents in that time.

And if some of the original information that got you the mortgage approval in the first places changes – and for the worse – you could lose your financing. Do the Mortgage Check-up!

Here’s a short list of changes that could kill your mortgage.

1. DON’T HAVE YOUR CREDIT PULLED BY ANOTHER BROKER OR LENDER – the lender will often pull your credit again right before financing. If the lender sees that other brokers or lenders have pulled your credit the lender views this a credit seeking and can put your funding in jeopardy.

2. DON’T APPLY FOR NEW CREDIT – the lender calculates your debt based on the amount of credit you have. If you are applying for new credit, the obvious assumption is that you are planning on using it. Don’t get any new credit until the closing date is passed.

3. DON’T CLOSE ANY OLD CREDIT ACCOUNTS – Credit is not a bad thing…. unless you are having a hard time managing it. Old credit shows a long history of being able to handle credit. Lenders like that.

4. DON’T MOVE YOUR MONEY AROUND WITHOUT A PAPER TRAIL – When you settle with the bank on the contract of the mortgage, the lender will require bank statements showing your saved money. They look at the history along with the balance. If there are any unusual deposits, you will need to explain where the money comes from. Be prepared to show a paper trail.

5. DON’T INCREASE YOUR DEBTS – The lender always looks at your debt to income ratio. If you increase your debt, you can risk going over the maximum amount of debt compared to your income.

A good mortgage broker will remind you of the pitfalls that can happen if you change your financial situation before closing, but ultimately it’s in your hands. You have to take responsibility and use common sense when they’re in the closing process.

From a first time buyer all the way to retirement, we are the most honest mortgage broker you will ever encounter. We are one of the largest and fastest growing Dominion Lending Centres franchises in Canada with over $1 Billion in mortgage volume each year. If you want the BEST, click here and call now.

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