Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Appraisals. Why do lenders request for appraisals?

If you are a current homeowner or previously been a homeowner, you may have already heard the term “appraisal” when obtaining mortgage financing. When you purchase or refinance a home, in many cases, lenders require an appraisal from an independent appraisal company. The purpose of an appraisal is for the lender to determine the value of the property.

Here’s what you need to keep in mind, when getting your home ready for an an appraisal:

1. House keeping – the appraiser will be focusing the structure of the house. However, decluttering and tidying up the interior and exterior will help make a good impression, as photographs will be included in the final appraisal report.

2. Do minor repairs prior to your appraisal. E.g: fix leaky faucets, missing door handles, trim or siding prior to the appraisal.

3. Make sure all interior and exterior areas of the property are accessible. E.g: entry to the attic/crawl space is clutter free.

If you are looking to purchase or refinance, contact the experts at MiMortgage.ca at 1.866.452.1100 to discuss your next steps.


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How to get a mortgage if you have bad credit

Sometimes, a difficult past is standing in the way of a bright future. Bad credit can do that to you. After all, credit history is an integral part of the mortgage approval process. 

If you’re running into roadblocks or don’t think you can get mortgage financing, don’t give up. It is possible to get a mortgage with bad credit! And it can be a very important step in getting you back on track financially should you need to pay off a significant amount of debt.  

One of the primary advantages of working with a mortgage broker is the access you get to a wide range of lenders, including institutional and private lenders that specialize in bad credit mortgages. While the guidelines are different for each, these lenders look at your overall situation and entire credit history, and some will consider your application even after a consumer proposal or bankruptcy. For certain areas of the country, primarily large metropolitan areas, there are lenders that will lend just based on the equity in a home. 

Keep in mind that even though you will have a higher interest rate and may pay additional fees, bad credit mortgages are typically short term i.e. 1 year term. During this time, we can work together to improve your score and then look to move you to a better rate longer-term mortgage.  

If you don’t have an immediate financing need, or your situation is such that you don’t qualify with one of these lenders, there are ways you can make up for bad credit, which include:

  1. Increasing your downpayment to 20 per cent or more. 
  2. Asking a trusted friend or family member to be a co-signer. Your co-signer will need a good credit score and have the capacity to be responsible for the mortgage if you are unable to handle the payments.  
  3. Or consider taking the time needed to repair your credit first. A much improved credit situation can save you the cost of a higher interest rate and less favourable terms. 

If your past is standing in the way of your future… get in touch with the experts at MiMortgage.ca at 866.452.1100 today and let’s chart a course to get you where you want to go.


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Easy ways to boost your credit score!

  1. A secured credit card will allow you to establish or re-establish a solid credit rating. These cards require a deposit so the cardholder can never be in default.
  2. Check your credit report and make sure it is accurate. If there are discrepancies, get in touch with the credit agency.
  3. The single biggest factor in your credit score is having a timely bill payment history.  Don’t let a bill get past due, and never let a bill go to collections. 
  4. Your score is based on your credit balance relative to your available credit. Try not to use more than 30 per cent. If your limit is $10,000, don’t let your balance go higher than $3,000.  
  5. Having a credit history is important. You need a record of owing money and paying it back. Take this into consideration if are thinking of cancelling a card.

Contact the experts at MiMortgage.ca at 866.452.1100 to find out more information.


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The lowdown on the First-Time Buyer Incentive

The first-time buyer incentive, launching on September 2nd, is a shared equity program designed to reduce mortgage payments for qualifying first-time buyers who have the minimum 5% downpayment required for an insured mortgage. The Canada Mortgage and Housing Corporation (CMHC) will provide 5% of the cost of an existing home, or 10% of a new home. This incentive isn’t payable until you sell the property and is not charged interest. 

There are a few caveats. If your household income is more than $120,000, you aren’t eligible for the program. And your total borrowed amount (including the incentive portion) can’t be more than four times your household income. With a household income of $120,000, the maximum purchase price would be approximately $505,000 with 5% down, and about $565,000 for a 15% downpayment.  

You are required to pay the incentive back after 25 years or when you sell the home, with the repayment amount based on the property’s fair market value, whether it has increased or decreased in value. If you received a 5% incentive and your $500,000 home increases in value to $600,000, then you are required to repay $30,000. If the value deceases to $450,000, you’ll repay $22,500. You can repay the incentive at any time without penalty

This new incentive program has certainly added another layer of complexity to the already complicated mortgage world. Getting expert advice throughout your mortgage years is more important than ever. 

Got a homebuying dream? Feel free to get in touch with the team at MiMortgage.ca for a review of your situation at any time! We can certainly run some numbers to determine if this is something you, or someone you know, may want to consider. 


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Happy Canada Day!

For all your mortgage financing needs, contact us at 1.866.452.1100 to speak to an expert or visit us at www.mimortgage.ca now!

 


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10 Money-Saving Tips for Summer

The lazy days of summer are here and with them come plenty of ways to spend. Here are some easy tips that can help you maximize enjoyment while minimizing how much you spend!

1. Budget it. set a budget for what you plan to do this summer and stick to it. If you have a plan and write it down you are less likely to go into unexpected debt by overusing your credit card.

2. Head to the library. Get your summer reading material at the library. Reading is a great cost-effective way to fill the hours! Libraries also often have free programs for families.

3. Shop second hand. Going to garage sales or flea markets in the summer can be a fun way to explore and spend your morning. If you need to buy something this summer start your search here.

4. Perfect the potluck. Make your your own signature dish and get guests to bring a favourite of their own, allowing them to share in the cost and effort of your backyard meal.

5. Pack a lunch. Make it part of the experience of a car trip or excursion Find a picnic spot to enjoy your home Ade goodies, and bring your snacks instead of buying expensive convenience store items. Also plan brown-bag it at work.

6. Drop it. Spend more time outdoors and drop your cable and gym membership for the summer..

7. Cut cooling costs. Set the temperature just one degree higher, and be mindful if electricity costs are higher during certain parts of the day. Open the windows at night, and close the blinds during the day. On hot days, skip the hot stove. Replace your AC filters.

8. Find free local fun. Check out your local events calendar. There are plenty of free or low-cost local offerings that you are sure to enjoy.

9. Snap up those souvenirs. The best summer souvenirs are often the photos. Skip the souvenir shops; take more pictures instead.

10. Create breathing room. If you have enough equity, take advantage of your low cost funds to refinance your mortgage if you have a large upcoming expense. Or perhaps you need to roll large amounts of credit card debt into your mortgage, a simple strategy that can save you thousands, give you one manageable payment and help you be mortgage free sooner.

For more information on your mortgage needs, contact the team at Mortgage Intelligence-Oshawa at 1.866.452.1100 or visit us at www.mimortgage.ca. Now kick back and really enjoy your summer!


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Happy Father’s Day!

 


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Why early payout penalties matter now more than ever.

We are deep in the competitive spring real estate market! And we’re seeing a very interesting rate anomaly. Fixed-rate mortgages are very competitively priced and gaining in popularity, while variable-rate mortgages are looking overpriced. We’re even seeing ten-year mortgages at good rates back in the news. If the market is telling us that fixed-rate mortgages have an advantage, then be sure to look at the fine print because the devil is in the details and early payout penalties matter. 

Why? Sometimes you just need to get out of your mortgage! It’s impossible to plan for many of the things that will happen in our lives, like job loss, illness, divorce, relocation, or another personal matter. Or when much better mortgage rates become available. Your needs and the market can shift easily during the term of your mortgage and the last thing you want is a painful penalty to get out early. That’s why it’s important to consider what your early payout penalty might be before you get your mortgage. We all want to believe that none of these scenarios will transpire, but when they do, it’s a relief to have a cost-effective option to get out.

Generally, to break your mortgage, you can expect to pay the greater of either a) three months’ interest, or b) the interest-rate differential (IRD). With the IRD, your mortgage lender will want you to pay the equivalent of what they will lose by releasing you from your mortgage and lending the money at current rates.  Not all lenders calculate IRD the same way, and the differences can amount to thousands or even tens of thousands of dollars. 

Early payout penalties are particularly important to consider if you are looking at a 10-year mortgage. If you break a 10-year mortgage before 5 years, the penalty with most lenders can be substantial. If there is a chance you could break the mortgage in the first 5 years, you may not want to consider a 10-year term. 

Don’t let anyone tell you early payout penalties are “all the same”. They’re not. When choosing between mortgages, be sure to compare how the early payout penalty will be calculated. If you ever need to get out of your mortgage early, having the right mortgage could save you stress and big money. Get in touch with the team at MiMortgage.ca at 1.866.452.1100 to speak an expert now. Advice on how to avoid painful penalties is part of the service we provide to our clients every single day! 


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Purchase Plus Improvement

Found a perfect property in the perfect neighbourhood, but the property needs a bit of TLC? With a Purchase Plus Improvement mortgage, costs for renovations or upgrades over and above the purchase price can be added on to the mortgage.

For more information on purchase plus improvements, read our previous blog “This is how to buy and renovate.”

Ask us how, by contacting us at 1.866.452.1100 now or visit www.davidhetti.com.


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Real Mortgage Story for May 2019

Whatever your financial circumstances, it’s worth having a conversation with your mortgage broker to find out your options. Contact us at 1.866.452.1100 to speak to expert today!