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Surviving and Thriving: Your Mortgage Blueprint for 2017

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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.

 

 


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Real Mortgage Story for September

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Cameron and Chloe are both employed and residing in Durham region. Cameron’s two children from his previous relationship are living with the couple. Shortly after the couple got together, Chloe’s parents and brother, turned to the couple for support and ended up residing with them.

During this time, Chloe was injured at work and was unable to care for her parents. Further as a result of Chloe being off work, the couple were behind on their mortgage and utility payments. They filed for a consumer proposal but were unable to maintain payments. In addition, their home was going in to power of sale.

In an attempt to remedy their situation the couple contacted the team at MiMortgage.ca with regard to refinancing their mortgage. Through the refinance the couple were able to pay off their consumer proposal, their outstanding collections and bring utilities upto date. The terms of their mortgage were:

  • Interest rate of 8.49% for one year
  • Monthly payments of $1,167.37 (interest only)

We were able to obtain financing through a private lender. In one year, we should be able to take them to an equity lender and obtain lower interest rates. Interest only payments will enable the couple to get financially back on track and re-establish their credit.

Whatever your financial circumstances maybe, it’s worth having a conversation with the experts at MiMortgage.ca to find out the way forward for you. Contact us to speak to an expert today!

 


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The Mortgage Kit: Start with proof of your income

DB15036_concepts_57933601We’ve all heard the scout motto “Be prepared”. It’s great advice if you need a mortgage. Assembling everything your lender needs to verify your income is a critical component of mortgage success.  A last-minute scramble for documents just adds to stress. Get a Mortgage Kit folder ready and begin collecting the verification you will need for your income type:

  1. Full-time salary:  Provide a recent pay stub and a “letter of employment” on company letterhead that confirms a) your position, b) your annual salary, and c) the length of time you’ve been in your position. If you’re a fairly new employee, lenders will want to know that your probationary period is over. And they will follow up. Commissions and bonuses can be supported by your last two notices of tax assessments.
  2. Commission, contract, part-time and seasonal employment: Company letter and paystub are required. Income must be consistent and can be proven with a 2 year average of tax assessments or T4s. If the position is contract, a copy of the contract and any renewals is required.
  3. Self-employed: Assemble:  a) two years of tax assessments, b) business license or registration, or articles of incorporation, c) your T1 general tax returns for the last two years, OR the last two years of accountant-prepared financial statements (if incorporated). Lenders recognize that self-employed income is kept low, so some expenses on your statement of business activities can be added back. If income is difficult to prove, be sure to have a strong credit history and downpayment.
  4. Child support: A copy of the separation/divorce agreement and three to six months bank statements are typically required. This income should be less than 30% of total income.
  5. Disability:  A letter confirming permanent status along with a paystub.
  6. Maternity Leave: Some lenders use full employment income if the employment letter confirms a return date within one year.
  7. Pension, RRIF, Investment income: Most recent tax assessment, T4A’s for pension income. There must be sufficient funds in the investment for the income withdrawal.

If you are fully prepared, then you’re always ready to take advantage of opportunities!


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Sixteen Years Strong!

A big ‘Thank You’ to our clients for your support over the years!

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Is your mortgage coming up for renewal?

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Got a mortgage coming up for renewal in the next few months? There are some great options out there; and we shop around for mortgage solutions to suit your needs. Conact the team at MiMortgage.ca to have a conversation today!


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Is A Second Mortgage Right for you?

We all incurr unexpected expenses – a much needed home renovation or a roof repair that cannot be delayed. These expenses in some cases, are large amounts which most of us may not have saved up and as a result require financing. At this point it is advisable to explore all possible options available for obtaining financing – borrowing from a bank at a low interest rate, a loan from a family member or a second mortgage.

Image by courtsey of secondmortgagerates.net

Image by courtsey of secondmortgagerates.net

Sometimes obtaining financing from a bank might be challenging, due to bad credit, not having enough equity on your home or simply because it does not make sense to pay hefty penalties for breaking a mortgage prior to the renewal date.

If you do look at a second mortgage, the question you need to ask yourself is, “is a second mortgage the most suitable option for you?” It is advisable to seek advice from your mortgage broker, before you decide to proceed.

Your mortgage broker should explain the ‘pros’ and ‘cons’ of second mortgages:

  1. You will be charged a higher interest rate, as there is potentially a higher risk than a first mortgage. The interest rate will be determined based on your financial circumstances – credit score, monthly income and equity in your home.
  2. A second mortgage could be obtained through a secured line of credit.
  3. Second mortgages are usually administered through smaller lending institutions and private lenders, and will require a mortgage broker to facilitate the process.
  4. Broker fees will vary depending on your circumstances and it is advisable to find out fee you will be charged upfront.
  5. An appraisal of the property is usually required by most lenders.
  6. You willl be required to engage the services of a lawyer that will safeguard your interests.
  7. There will be penalty charges for early or late mortgage repayments. The best time for repayment avoiding penalities would be on the renewal date.

It is important to understand the process and the costs involved, in order to make an informed decision.

An informative article published by Huffington Post, gives readers insight on what potential borrowers need to know and understand about second mortgages.

If you are in need of finacing for much needed home renovations or to finance your child’s college or university education, it might be beneficial to speak to an expert at MiMortgage.ca, to find out if a second mortgage is the way forward for you? Contact us to speak to an expert now!


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Managing Your Money

It is time to act cautiously!

Following the rate cut announced by the Bank of Canada last week, the major banks have passed on a part of rate cuts to their borrowers. In addition, there seems to be more speculation around uncertainty in the Canadian economy and a possible rate cut in March, if the oil prices do not sustain.

As we have mentioned in our previous posts, this is the time to act cautiously with your debts. The economic conditions are an indicator for you to focus on:

managing finances1. Paying off as much debt as possible

2. Increasing your savings every month

3. Getting a mortgage that is suitable for you and not just a low rate.

4. Managing your finances wisely

Please read article and watch the video on the Financial Post for information.

If you are looking to buy a home and need advice on how to manage your finances, contact the team at mimortgage.ca. To get pre-approved today, apply now through our secure online website or speak to one of our agents at (866) 452-1100.