Mortgage Intelligence

Oshawa's Mortgage News Desk!


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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!

 


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Why Mortgage Before March 17?

db14142_fb_homeowners_i14759090_miIf you’re in the market for an insured mortgage, then you might want to get that mortgage before March 17.

Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes for the third time in three years. Canadian homebuyers are required to have mortgage insurance if they have less than a 20 per cent downpayment. The insurance provides protection for the lender in the case of a default.

How will it hit your wallet? The increase is not too significant for those making the minimum downpayment required. A homebuyer with a $250,000 mortgage and a 5 per cent downpayment will only pay about $5 per month more in insurance premiums.  We can calculate exactly how much the increase will mean to you if you get your mortgage approval on or after March 17.

The increases are actually more substantial for larger downpayments of 15 per cent or more. Those with 20 per cent or more downpayment aren’t required to have mortgage insurance, although it’s used by lenders that securitize their mortgages. As a result, any increased cost will likely be passed on to customers through higher rates.

Premiums are also increasing for “non-traditional” insured mortgages i.e. home buyers with borrowed downpayments, a type of mortgage downpayment that could grow in popularity as homebuyers strive to gain entry in the housing market.

The premium change will come into effect on March 17. Homebuyers will be able to access the current lower rates if they have bought a home and are approved before the March 17 deadline, even if they have a later closing date.

If you are looking to buy, get in touch with the team at MiMortgage.ca today!


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Surviving and Thriving: Your Mortgage Blueprint for 2017

blueprints

Image by courtesy of scvnest.com

Canadians are definitely talking about the housing market – what do the new mortgage rules mean, is this the right time to buy, have mortgage rates bottomed out, is a lender’s renewal offer the best available, and on and on! For many, it feels like some uncertain times ahead. Often it’s just a few sensible strategies that can help you survive and thrive in the current climate:

  1. Take care of your credit. It’s so important to have good credit behaviours so you always qualify for the best mortgage rate. Pay your bills on time. Don’t let your credit accounts exceed 50% of the credit available. Also don’t apply for a store card just to save on your purchase that day! Before you cancel any credit cards, speak to an expert and get advice.
  2. Let renters help pay your mortgage. A home with a rental suite can be a great option for homebuyers, especially if the area you love is pricey or you don’t want to buy a condo at a lower cost. It’s also a great option for existing homeowners looking to lower their mortgage payment.
  3. What’s the prepayment penalty? If you ever need to get out of your mortgage early, the right mortgage could save you thousands!  Not all lenders calculate penalties the same way, and the differences can be substantial. It helps to know which lenders have the most fair prepayment penalties and your mortgage broker will have that information at their fingertips.
  4. Choose low-interest debt. Whatever your need might be – paying down high-interest debt, funding education, a large purchase, investments, or renovations, your mortgage might be your most cost-effective financing option, if you have enough home equity.
  5. If you bought your first home in 2016 you may be able to take advantage of the $5,000 non-refundable Home Buyer Tax Credit amount, which provides up to $750 in federal tax relief.  Not sure if you qualify, just ask!
  6. Renovate over relocate? The right renovation might be all it takes to turn the house you’re in, into the home of your dreams. It is almost always less expensive to renovate than to relocate! We have great renovation financing options if that’s where you’re heading!
  7. Renew with your eyes open. When your lender sends out a letter suggesting you renew your mortgage at their current offer, speak to your mortgage broker, get advice.  Don’t renew with your eyes closed! This is your opportunity to negotiate the best possible deal!
  8. Speed up your mortgage pay-down. Change from monthly payments to weekly or bi-weekly payments. Or take your tax refund and put it against your mortgage principal. Your interest costs will go down with every dollar you’ve reduced on your principal.
  9. Don’t neglect your savings. In managing debt, you want to make sure you don’t need to use credit to get you through a financial emergency when your car breaks down or your washing machine quits. Make a point of setting aside a small sum every paycheque into a special emergency fund.

And lastly, it’s always a good idea to get expert mortgage advice well in advance of buying your home, and then always on an annual basis. So take the time to meet with your mortgage broker and get your blueprint for surviving and thriving in 2017.