Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Capital gains tax: a quick primer

Leading up to the last federal budget, there was speculation that Canadians should brace for some changes in capital gains rules. That didn’t happen, and that’s good news. The sale of your principal residence for a gain is still a tax freebie.  If you are selling a property other than your principal residence, then you’ll pay tax on 50% of any gain you realize. That rate first went into effect in 1972. The inclusion rate was increased to 66.6% in 1988 and then to 75% in 1990 as part of a two-stage increase.  But it was ratcheted back down in 2000, and landed once again at the 50% rate where it has remained to today. You are now required to report the sale of your principal residence on your tax return. While still tax exempt, you may be asked to prove that it was your principal residence. If the feds do once again increase the inclusion rate, we can expect the government to provide ample advance warning to allow people to adjust their financial situations. So basically no real changes, but keep good records!

Want to find out more information on how capital gains from the sale of your residence will affect you? Speak to an extpert at MiMortgage.ca at 1 866 452-1100 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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Downpayment Savings Strategies

Saving for a down payment requires descipline & determination, whether you’re working towards saving for a minimum downpayment like most first-time homebuyers or 20% down.

Here are a few strategies that will help you to get started with saving.

If you are at the stage of working out your downpayment strategies towards homeownership, it’s time for a meeting with the team at MiMortgage.ca. Contact us at 1 866 452-1100 or apply online now!


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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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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.

 

 


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House over $500,000? New downpayment rules in February.

Image by courtesy of expertbeacon.com

Image by courtesy of expertbeacon.com

On February 15, 2016, minimum downpayment rules are changing in Canada – for homes worth more than $500,000. The change is straightforward: for any portion of the house price over $500,000, buyers will need to provide 10% downpayment for an insured mortgage. The minimum downpayment for the first $500,000 will remain unchanged at 5%.

How much difference could it make? Here’s a simple example:

Right now, you could get a mortgage for a $750,000 home with a downpayment of $37,500: a simple 5% of $750,000. Once the new rules kick in next month, you’ll need $50,000 downpayment for the same house: 5% for the first $500,000 ($25,000), plus 10% for the $250,000 over the limit (another $25,000).

The change was announced in mid-December by the new Liberal Finance Minister, Bill Morneau. While most Canadian homebuyers will be unaffected, the move is designed to protect Canadian homeowners by ensuring a stronger equity footing in their homes.

If there’s a house purchase in your future, let’s talk. You will need a mortgage approval before February 15 to qualify under the 5% rule, and your purchase must also close before July 1, 2016.

Here is a handy chart that outlines the impact of the New Minimum Downpayment Requirement

 

Purchase Price New Downpayment
Requirement
Old Downpayment Requirement of 5 percent
Up to & including $500,000 No change.
5% – up to $25,000
up to $25,000
$600,000 5.8% – $35,000 $30,000
$700,000 6.4% – $45,000 $35,000
$800,000 6.9% – $55,000 $40,000
$900,000 7.2% – $65,000 $45,000
$999,999 7.5% – $75,000 $50,000

Looking to buy a home and trying to make sense of the downpayment calculations? It’s worth having a conversation with an expert at MiMortgage.ca to findout how of downpayment you will need to have. Contact us now to speak to an expert.


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Homebuying For Beginners

 A Ten Point Plan For Smart Homebuying

Contact the mimortgage.ca team today, for advice on down payment options for a home, best possible rates or for assistance with planning your finances. To get pre-approved today, apply now through our secure online website or speak to one of our agents at (866) 452-1100.