Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Appraisal or Home Inspection… what’s the difference?

Often in a home purchase, home inspections and appraisals are both common practice. So what’s the difference?

A home inspection is often a condition of a purchase and is usually done to protect the homebuyer. A qualified home inspector will assess the physical condition of the home and all of its major systems to help you determine if everything is in good working order. You typically receive a schedule outlining what repairs are needed and by when.

An appraisal is an objective assessment of the home’s value to confirm that the property is suitable as security for the mortgage. This is rarely a problem, but lenders and insurers take on their own financial risk, and they want to feel confident in the property before they approve the mortgage.

If you are thinking about homeownership it’s best that you understand the different processes that you need follow from making an offer on a property and obtaining mortgage financing. Contact the experts at MiMortgage.ca at 1 866 452-1100 to speak to an expert for more information about mortgage financing.

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Six reasons why a second mortgage can be a smart move

Every month, you put money against your mortgage. Over the years, thanks to all those payments (and a healthy increase in home values), you’ve built up some equity. Way to go! Sometimes, we want to be able to tap into that equity. But new mortgage rules have made it harder to refinance a mortgage. No surprise, then, that we’re seeing a jump in second mortgage financing. Here are six reasons why a second mortgage might be a smart move for you too:

  1. A second mortgage can be a great way to access available equity without having to break your first mortgage.
  2. Ability in some cases to refinance up to 85 per cent loan to value.
  3. Second mortgage interest rates can be significantly less than credit cards. You can use the second mortgage to pay off your high-interest credit card debt, which will clean up any bruised credit and get you in a better position to qualify for the best rates later.
  4. Ability to use this lower-cost financing as you see fit – pay off debt, renovations, cash flow for your business, an investment, tuition, wedding, trip, or other major expenditure.
  5. That second mortgage can help you complete your purchase if your downpayment is a little short of what you need.
  6. A second mortgage is often easier to qualify for than a secured line of credit.

The value you’ve built up in your home is a wealth-building tool, and usually the best place to borrow funds when you need them. That’s why – for a growing number of financially savvy Canadians – a second mortgage can be a smart move! Get in touch with an expert at MiMortgage.ca to find out if this is the way forward for you.


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Who should get a mortgage preapproval?

A mortgage pre-approval can be an important part of your pathway to building wealth, giving you a real-world picture of your options: that is, your opportunities as well as your limitations.

A mortgage preapproval will tell you how much you qualify for (you may be pleasantly surprised), what your mortgage payments will be, and you’ll get an interest rate that will be held for a specific time period, like 120 days.

If you are purchasing a new home, then you’ll be shopping with a full wallet! You’ll know exactly what you can afford. You want to avoid reaching too far financially for a house you’ve fallen in love with, but you may also discover that you’re ready for the house of your dreams and didn’t know it. A mortgage preapproval tells you that.

In other words, a mortgage preapproval is always a good idea.  Remember, of course, that a preapproval isn’t a mortgage approval.  Make sure you have a financing condition in place when purchasing because your property needs to be assessed by your lender during the mortgage approval process.  You’ll need to provide the necessary information such as the offer to purchase, MLS listing, and any other documents required by the lender so they can assess the property.

Additionally, any planned financing might fall through if your circumstances change. So be careful with changing jobs, adding debt or missing payments, co-signing another loan, or using your downpayment money. You want to keep your financial situation squeaky clean while you’re getting ready to finance.

Wherever you are in your mortgage journey, get in touch, and we’ll show you all the possibilities.

Is your mortgage coming up for renewal in the next few months? If so, you can expect to hear from your lender. Remember that when your lender gets in touch with you, that is your signal to get advice. Staying with your lender might be your best option, but you should always use renewal time as an opportunity to look around and make sure you have the best deal. Contact the experts at MiMortgage.ca at 1 866 452-1100 for a review of your mortgage options.


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Low-Interest Credit Card for Homeowners.

9.9% interest plus earn reward points! If you typically carry a credit card balance, you can reduce your interest by 50% or more with our Centra Gold Card. By paying less interest each month, you can work towards becoming debt free sooner. Plus you earn reward points that translate into 1% cash back on your purchases.* Let’s discuss how this card can help you save money during your mortgage years and keep your credit sharp! Contact the team at MiMortgage.ca at 1 866 452-1100 for more information.

*REWARDS: Eligibility for rewards and/or account credit is subject to the terms and conditions of the Collabria MySelect Rewards and Cash Rewards programs. For full terms and conditions, visit http://www.collabriacreditcards.ca/webres/File/Rewards Terms/RTC-0415-FCG – MySelect Rewards Terms and Conditions.pdf. The Collabria Mastercard is issued by Collabria Financial Services Inc. pursuant to a license from Mastercard International Incorporated. Mastercard and the Mastercard Brand Mark are registered trademarks of Mastercard International Incorporated.


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Four insurance definitions for homebuyers.

It’s easy to get caught up in home buying frenzy and just focus on finding that perfect home. During all that excitement, be sure to take some time to get acquainted with a few key terms. Here are the four types of insurance you’ll encounter.

High-Ratio Mortgage Insurance

If your downpayment is between 5% and 20%, you are required to have “high-ratio mortgage insurance.” This insurance is there to protect the lender, and the premium is almost always added to your mortgage amount.

Example: Purchase price is $400,000 and you have 5% downpayment, for a total mortgage amount of $380,000. The mortgage insurance premium is 4% or $15,200, which is then added to your mortgage. The insurance premium declines at 10% and at 15% down. If you’ve saved up more than 20% of the purchase price, then you don’t need this insurance unless it’s required by the lender. 

Title Insurance

Having “title” means you have legal ownership of property. Title Insurance protects owners and their lenders against losses related to the property’s title or ownership, such as: unknown title defects, liens against the property’s title, encroachment issues, title fraud, survey errors, and other title-related issues that can affect your ability to sell, mortgage or lease your property in the future. Premiums are collected upon purchase and based on the value of the property.

Home & Property Insurance

This must-have insurance protects against risks to your property and contents in the event of fire, theft and some weather damage; it also includes liability insurance in the event that someone is hurt on the insured property. Most lenders require proof of home insurance, so be sure to have your policy in place after your offer is accepted and before your closing date.

Mortgage Life Insurance

In the event of death, this insurance will pay the insured balance of the mortgage, discharge fees and prepayment penalties to the lender, and leaves the property with little or no mortgage for the surviving family or estate. There are many reasons to strongly consider this coverage because anything can happen at any age and at any time. Premiums are calculated based on age and the original mortgage balance.

Insurance can protect you and your family throughout your home ownership journey. If you are unsure about something, get in touch. Contact the team at MiMortgage.ca at 1 866 452-1100. We’re here to make sure your journey has a happy ending!


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How to Deal With Mortgage Payment Difficulties

Sometimes unforeseen financial circumstances can impact your ability to make your regular mortgage payments. Or perhaps your debt demons have been caused by taking on too much other high-interest debt.  It can be tempting to want to conceal your debt problem for as long as possible – but that’s almost never the best strategy. With early intervention, there are weapons available that can help you fight these demons! Your mortgage lender doesn’t want to see you default on your mortgage; they’d much rather help homeowners find a way to keep their home.

For mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), they have identified several tools available to help you ride out a period of financial uncertainty:

  1. Converting a variable-interest rate mortgage to a fixed-rate mortgage to protect you
    in the event of a sudden jump in interest rates.
  2. Your lender may be willing to offer a temporary payment deferral, or other flexible options for short-term relief. If you’ve made any lump-sum payments against your mortgage in the past – or if you’ve been on an accelerated payment schedule –
    that history can help.
  3. You may be able to extend your amortization period to reduce your monthly
    You can shorten the amortization again later if your circumstances change.
  4. If you’ve actually missed a few payments already, you may ask if the lender is willing
    to add them to the mortgage balance and extend the payment period accordingly.
    (Best, however, to start talking before you start missing payments!)
  5. A special payment arrangement unique to your situation may also be possible.

Genworth Canada also has a Homeowner Assistance Program designed to help homeowners who are experiencing temporary financial difficulties that may put their mortgage at risk.

Ultimately though, it’s best to seek help at the first sign of financial trouble. Getting in touch with the team at MiMortgage.ca and having a conversation is a great place to begin – because as independent mortgage professionals, we work for our clients and look out for their best interests.

It’s possible that your financial situation just requires some extra penny-pinching to stay on budget. But if you find yourself adding to your credit card debt – or borrowing to make mortgage payments – then it’s time to have that conversation. Contact the experts at MiMortgage.ca at 1 866 452-1100 now. The earlier you get help, the easier it will be to conquer those debt demons!

 

 

 


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For 2018: Ten mortgage tips you won’t get from your bank

More new mortgage rules come into effect January 1, which will make it trickier to negotiate a mortgage for many Canadians. But with a little expert advice, we can help ensure you have a happy new year that keeps you on the path to prosperity for the coming year and beyond.

  1. That “best” 5-year rate? It probably isn’t. Fact is, a “best rate quote” is now meaningless, because mortgage pricing is now based on multiple factors. Everything depends on your personal situation. That’s why we start with an in-depth assessment, and then review a broad range of lenders and products for the best fit for you.
  2. Going variable and long may pay off. If you have over 20% equity, you may want to consider a 30-year amortization mortgage. Benefits can be significant and outweigh any rate premium – more purchasing power, easier mortgage qualifying, and lower payments to boost cash flow or to allow you to divert cash to build a savings buffer or use for investing. Taking a variable-rate mortgage could also improve your mortgage qualifying, then you can lock in later. Let’s discuss if these strategies might work for you.
  3. The devil is in the details. You can save thousands by making sure you get a mortgage that has a fair prepayment penalty and will also treat you fairly at renewal. Don’t end up paying exorbitant fees or be forced to take a high rate at renewal. Look deeper than rate.
  4. High-ratio insurance costs more, except when it doesn’t. While counter intuitive, lenders offer the best rates to borrowers who need mortgage insurance because they have less than 20% down. So even if you have more than 20% down and don’t need mortgage insurance, it may actually be worth purchasing. You’ll get a lower rate and better options at renewal. We can run the numbers and see if it makes sense for you.
  5. At renewal, insured mortgages are gold. Lenders love insured mortgages. If you have one, be sure to check out the competitive landscape at renewal. If you aren’t sure if your mortgage is insured or not, we can find out.
  6. No company paycheque? Start building your case. If you are self-employed, get in touch now for advice on mortgage planning for the future. We will advise you on what documentation and information you’ll need so that we can build a strong case on your behalf for lenders.
  7. Does a collateral mortgage make sense? A bank collateral mortgage is registered for more than the value of the home at closing. It can be difficult to transfer and you may find yourself locked in with that bank. Always get a second opinion!
  8. Let renters help pay your mortgage. A home with a rental suite could help you become a homeowner in that neighbourhood you love, or help you offset mortgage payments in the house you’re in.
  9. Keep good credit habits. The best rates go to borrowers with the best credit scores. Keep up good credit habits: pay your bills on time, never let your debt exceed more than 30% of your limit, and don’t be tempted to apply for store cards “to save on your purchase today”.
  10. Let’s keep a dialogue going. Wherever you are in your homeownership journey, a great conversation at any time can identify all the ways you can save thousands of dollars in interest and fees during your mortgage years.

New year. New rules. New chance to review your mortgage and wealth-building options. Get in touch with the experts at MiMortgage.ca at 1 866 452-1100 now, for a review of your situation.