Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Love that low loonie: is your U.S. home a piggy bank?

There’s a silver lining to the low loonie if you happen to own a home south of the border. A few years ago, a wave of Canadians took advantage of a strong loonie and low U.S. home prices – and picked up some American real estate. Those homes are as good as a piggy bank now.

Why? If you refinance your U.S. home, you can bring those U.S. dollars back to Canada at the current exchange rate. That powerful U.S. dollar is your financial friend, and we don’t know how long it will last. You could use the money to pay off any debts in Canada – or even use the proceeds to purchase another Canadian property. The goal is to get those U.S. dollars back over the border to Canada.

By the way, selling the home triggers capital gains. Refinancing does not.  Any income you generate by exchanging your dollars doesn’t count as capital gains, so you don’t pay tax when you exchange your US dollars for Canadian dollars. You also get to keep your vacation property.

Many Canadian owners of U.S. homes rent out the property when they’re not using it – giving them rental income to maintain the home and pay down the mortgage.

Most property values have rebounded well from their lows; so many owners are also taking advantage of the growth in their U.S. home equity. A U.S. bank will typically lend 60% of the appraised value of a property.

If you own a home in the U.S., let’s chat.  Contact us at 1 866 452-1100. We have an excellent relationship with a U.S. lender that is licensed in Florida and California. You may be able to give your wealth-building a boost!


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This is how to buy and renovate

Many homebuyers looking at older properties find themselves in a common predicament: they’ve found a property that suits them, but it needs some costly and immediate upgrades.  Good news. We’re got a mortgage that will keep you financially afloat!

A “Purchase Plus Improvements” mortgage adds the cost of those immediate renovations into your mortgage, so you don’t have to rack up credit card bills or sell investments to pay for the upgrades.  This mortgage will cover the sale price of the home, plus any renovations that would increase the value of the property, up to $40,000. This way you can spread your payments over the life of the mortgage and have a cost-effective way to get into your dream home. You can then use your pre-payment privileges to pay the renovation off faster.

Here is an overview of the process:

  1. Obtain cost estimates for the upgrades.
  2. An appraisal with two separate values will be required: first the value of the property “as is” and the estimated value of the property once the improvements are completed.
  3. Your lender will add the estimated costs of the renovation into your mortgage.  The committed amount of the mortgage will be advanced to your solicitor, who will be instructed to hold back the renovation funds until the work has been completed and inspected.
  4. Complete your upgrades; funds are released upon completion.
  5. There are options we can discuss for carrying your expenditures until the funds can be released.

 So if you find a home with “great bones” that can be renovated into the home of your dreams, get in touch with the experts at MiMortgage.ca early. We’re here to make sure your homebuying journey has a happy ending.


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Verifying Your Income

Collecting documents that you need to verify your income is a critical component of mortgage financing. Rushing around at the last minute to collect income verification documents only adds unnecessary stress.

Here’s what you need to provide depending on your employment status:

If you are thinking of getting in to homeownership, it’s time to meet with the team at MiMortgage. We will carry-out an assessment and let you know how much financing you would qualify for, and the documents you need to provide. Contact us at 1 866 452-1100 to speak to an expert or Apply Online now!


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Verifying Your Downpayment

If you are at the downpayment verification stage of the homebuying process, you are either looking at putting an offer in or you have already made an offer on a property. Please remember to make the offer subject to financing, so that your mortgage broker has sufficient time to obtain the necessary approval for financing. Once an approval has been granted for your mortgage, your lender will require confirmation of downpayment.

Here’s how you can show where your downpayment is coming from:

Need help with understanding how much downpayment you should put down and the required documents to show your downpayment? Contact the team at MiMortgage.ca at 1 866 452-1100 or apply online now!


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Are you ready to buy a home?

There’s lots of perks for owning your own home – monthly payments you make will be towards paying off your mortgage instead of paying a landlord, build home equity, become a part of a community and you can decorate the way you want!

Here’s what you need to know, to get started..

To find out more about how much you can qualify for, get in touch with the team at MiMortgage.ca. Call us at 1 866 452-1100 to speak to an expert or apply online now!

 


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What is the Qualifying Rate?

In 2010 the Department of Finance introduced the Qualifying Rate to assess borrower eligibility and ensure that potential borrowers can maintain their payments should rates begin to rise. The qualifying rate is a 5-year rate published every week by the Bank of Canada, and will be higher than your actual contract rate. The Bank of Canada surveys the six major banks’ posted 5-year fixed rates every Wednesday and uses a mode average of those rates to set the official benchmark.

As a result, your lender is required to use this rate to calculate debt service ratios when reviewing mortgage applications for all insured mortgages. Prior to October, 2016, this financial “stress test” was applicable for fixed-rate mortgages with terms of 1 to 4 years and all variable-rate mortgages. Now, it also applies to fixed-rate insured mortgages of 5 years or longer, and some conventional mortgages.

Although we can find you a much better mortgage rate – you’ll still need to show you can maintain your mortgage using the higher qualifying rate. While you must “qualify” at this higher rate, your actual payments will be based on your lower mortgage contract rate.

Our goal is to provide expert advice, education and resources that homebuyers need. It’s important that you understand the terms you agree to when making what is likely your biggest purchase decision. Want to learn more about the qualifying rate and how it applies to you? Contact the team at MiMortgage.ca now. We’re here to help you!


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What’s up with zero downpayment? For some, it can make all the difference.

no-down-payment

Image by courtsey of erastarr.com

Many Canadians are not aware that zero down is alive and well and offered by a handful of excellent lenders to qualified borrowers. Of course, you have to wonder if zero-down can possibly make good financial sense. The answer is both yes and no.

A zero-down mortgage is not for everyone – but for well qualified homebuyers, a zero-down plan can get them into their homes faster, saving potentially thousands in rent, and providing a jump start on building wealth.

If you have excellent income and credit, and the ability to manage your mortgage payment and ongoing housing expenses comfortably within your budget, then you could be a candidate for a zero-down mortgage.  Consider that the money currently going to rent could be helping you build home equity right now, and that we continue to be in a period of historically low interest rates.

So how can you get around saving that critical minimum downpayment required to qualify for an insured mortgage? You can borrow the downpayment from a line of credit, personal loan or family member. With excellent credit and stable income, your interest rate will be fully discounted. The loan payment of course will be used in your qualifying calculation, and your mortgage insurance premium will be higher. You’ll also need to have funds set aside to cover your closing costs.

Want to learn if you qualify to purchase now without waiting, how to build your downpayment faster, or the steps you can take to improve your credit rating so you qualify for a great rate when the time comes? Contact the team at MiMortgage.ca. Let’s talk!