What you need to know about your downpayment.
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You have got your downpayment sorted out and you are ready to go ahead with buying your home. Congratulations! You will need to verify that downpayment for your mortgage approval. It is a mandatory requirement by all lenders to protect against fraud. This is also to prove that you are not borrowing your downpayment, which changes your lending ratios and potential approval. Here is how you should prepare:
- Provide bank statements covering a three month period of your bank account(s) where you have been assembling your downpayment. It is critical that your name is linked to the account(s); some online banking print outs do not show names of account holders.
- If you had any large deposits, show its source i.e. if you sold your car, show a copy of the bill of sale. If you transferred money in from another account, bring the records for that account too.
- If all or part of your downpayment will be a gift, a gift letter must be signed. A bank statement from the giver will verify the funds. Be prepared to show the funds deposited to your account no later than 15 days prior to closing. Gifted funds are only acceptable from immediate family members (parents, grandparents, siblings).
- If using RRSP money, provide a 3-month history of the account. If you are withdrawing under the Homebuyer’s Plan, the funds must have been in the account for 90 days.
- If you are getting money from outside the country, get the money into Canada at least 30 days before funding, and provide a 90 day confirmation from that location.
- Regularly deposit all cash in the bank, don’t stockpile at home.
- If your downpayment is coming from the sale of your home, provide a firm contract of purchase and sale and the current mortgage statement.
- You will also need to verify that you have an additional 1.5% of the purchase price to cover closing costs.
Speak to experts who are knowledgeable on mortgage downpayments to get the advice you deserve. Contact the team at MiMortgage.ca at 1 866 452 -1100 to speak to an agent or to get pre-approved apply now through our secure website.
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Cash issues faced by millennials have been the talking point in the past few weeks.
Many millennial graduates are getting ready to enter the workforce with hefty student debt at a time when unemployment is high and they are struggling to find a job that is well paying. As a result the chances of them being able to afford to buy a home at this point is very small too. Many are dependent on their parents for financial assistance with groceries and other monthly bills. Also, many millennials end up living with parents until they are financially independent and are able to move on their own.
An article published by the Financial Post gives us more insight to the struggles, millennials are faced with.
Our advice for young parents is, you should look at building a “future college education fund” for your children, to ease the burden of carrying hefty student loans in the future.
For millennials, strategically planning your financial future would be advisable, also look at actively reducing debt and not adding anymore consumer debt.
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As you all know that paying off your mortgage as early as possible makes good financial sense. This will be beneficial to you, as you will save a significant amount of interest charges and free up money for RRSPs or other investments, and changing lifestyle needs.
Here are 5 strategies that will help you become mortgage free sooner:
- Add a bit to your monthly payment. Most of us can find an extra $50 per month by cutting out a restaurant meal. Add that money to your mortgage and you’re saving big on interest down the road.
- Make a yearly pre-payment. Paying an extra one or two thousand on your mortgage once per year on the anniversary date of the mortgage could yield significant savings over the life of the loan. Take advantage of a tax refund or bonus from work. Lump-sum mortgage prepayments have a much greater impact on the total amount of interest you’ll pay if they are made early in the mortgage.
- Increase your mortgage payment if your income increases. Pretend your income did not increase and maintain your usual lifestyle.
- Choose accelerated bi-weekly payments. Instead of paying your mortgage on a monthly basis 12 times per year, pay your mortgage every two weeks for a total of 26 payments, effectively giving you one more mortgage payment each year.
- Stay informed. Do not let your mortgage go on auto pilot. Let us stay in touch with you throughout your mortgage years. We can help you save money at renewal, and will keep you up-to-date on rates and new mortgage options. You can save thousands just by understanding what your options are and by taking advantage of opportunities.
Let us help you build a plan to become mortgage free sooner! Contact the MiMortgage.ca Team at 1 866 452-1100 to speak to an agent or to book your free no-obligation mortgage review.
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To many of us, life happens at some point in our lives – divorce, falling ill, death in the family or loss of employment, and as a result our financial circumstances and mortgage needs may change too. Therefore getting a mortgage professional to carry out an annual financial checkup is advisable.
With all the changes in your life, you may want to make sure that:
- you are taking advantage of your prepayment privileges to maximize your mortgage principal reduction;
- large amounts of high-interest debt are transferred to a lower interest rate so you can boost your cash flow and save on interest costs (if you have enough equity in your home);
- you get a professional review of your options if your mortgage is renewing in the next 12 months;
- you are taking advantage of today’s attractive mortgage products, which include prime minus variable, fixed-rate, or hybrid mortgage (part fixed, part variable); and,
- you have access to the lowest-cost funds for renovations, education funding, a vacation or investment property, or other large looming expense.
We can tailor your mortgage to your changing needs. Contact the MiMortgage.ca team at 1 866 452-1100 to book your free no-obligation mortgage review and make sure your mortgage incorporates what may be ahead: it could pay big dividends and is the best way to get you where you’re going in your financial future!
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If you are in the market to get a mortgage with less than 10% downpayment, you might want to get that mortgage before June.
Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes with less than 10 per cent down. The new premiums are expected to increase by about 15%. Canadian homebuyers are required to have mortgage insurance if they have less than 20 per cent equity in their homes. Premiums will not increase for those with downpayments of 10 percent or more.
How does this affect you? A homebuyer is expected to pay an extra $450 per $100,000 in mortgage. We can calculate exactly how much the increase will mean to you.
The change will come into effect on June 1, 2015. Homebuyers will have access to the current lower rates if they have bought a home and are approved before the June 1 deadline, even if they have a later closing date.
If you are looking to buy and you have less than 10 per cent downpayment, get in touch with the team at MiMortgage.ca today! To get pre-approved apply now through our secure website or speak to one of our agents at 1 866 452-1100.