Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Mortgage choice – monoline lenders

Finding a perfect mortgage that fits your life is like finding the perfect home. It’s an important decision that requires a lot of shopping around. That’s where we come in. With access to over 50 of Canada’s leading lenders, we are a one stop shop. We work with major banks, credit unions, and national, regional and private lenders. One specific lender type that we work with is called a “monoline” lender, which focuses just on mortgages and doesn’t take deposits. They don’t have other products to cross-sell, which differentiates them from a bank or credit union.  They are an important part of the mortgage market because their mortgage products and low pricing improve consumer choice and ensure that our banks remain competitive. Most monoline mortgages are only available through mortgage brokers, which is one of the reasons so many Canadians are turning to mortgage brokers for their purchases, refinances and renewals.


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The Mortgage Broker Advantage

Increasingly, Canadians are turning to mortgage brokers for their first and next mortgage, taking advantage of the value and convenience of their services. One of their most compelling reasons to work with a mortgage broker is that they have access to a wide range of lending sources, making it significantly easier to match borrowers with the mortgage product that best suits them. When you’re dealing directly with one financial institution, you just don’t know if you’re getting the best deal because they’ve only got their own menu of products to offer you.

If you are dealing with one of the largest mortgage brokers in the country, you’ll also enjoy considerable bargaining power. A large brokerage has clout with lenders to negotiate volume discounts that lead to lower rates and greater product choice than other companies. And, brokers are generally paid by the lender rather than the borrower, making it a logical choice to always consult with a mortgage broker.  They’re shopping the market for the best rates, doing all the work, and there’s no cost to you.

But a mortgage broker’s role extends beyond securing financing – to arranging the home appraisal and lawyer or notary, reviewing the purchase contract and statement of adjustments, securing mortgage life insurance, and keeping tabs on the entire closing process. And that’s just during the mortgage transaction. The broker then stays in touch, keeping clients apprised of new mortgage offers and rate fluctuations, and advising when to lock in a variable-rate mortgage.

Ultimately, the role of your mortgage broker is that of a trusted advisor and it’s a relationship that can last a lifetime. Many mortgage brokerage clients have been referred by word of mouth, and many are even second- and third generation client families.

Whether you’re taking on your first mortgage or a long-time homeowner looking to refinance, consolidate debt or leverage your equity to acquire a new property, a mortgage broker is a wealth of information. They can advise about down payment requirements, mitigating credit history issues, mortgage payment and prepayment options, interest-saving strategies, purchasing vacation, investment and commercial properties, qualifying with supplemental rental income, and mortgage options for new immigrants.

When you get a mortgage, most likely the biggest financial commitment you’ll make in a lifetime, it’s critical that the person you’re dealing with is knowledgeable, able to answer your questions, and has access to a full range of lenders so you get the best mortgage for your needs. Contact the experts at MiMortgage.ca at 1 866 452-1100 or apply online now!

 


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Home Appraisals 101

When you get a new mortgage, an appraisal of the subject property is often required by your lender.  An appraisal is an unbiased determination by an accredited appraiser of the estimate of the current fair market value of the property. The appraiser provides the lender with a written opinion of the property’s value, and is client-paid for most refinances, switches, conventional mortgages and only in exceptional situations, high-ratio mortgages.  It’s required for refinances because you can only refinance up to 80% of your home’s appraised value, and for some purchases and switches because the property becomes the lender’s security.  Keep in mind that when a realtor gives you an evaluation of a property’s value, that should not be considered an appraisal for financing purposes.  And given the hot housing market in some parts of Canada that are seeing bidding wars, some buyers are paying well over asking and the appraiser may determine that the property has a lower value, which could affect the buyer’s financing.

As always, please get in touch with the team at MiMortgage.ca at 1 866 452-1100, at any time if you have any questions.


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The Green House. Look to your mortgage for energy savings.

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Image by courtesy of fsb1879.com

If you buy an energy-efficient home or make energy-saving renovations you may be able to get a savings boost from your mortgage!  Canadian mortgage insurers have a program that helps homeowners save when they buy energy-efficient homes.

Homeowners purchasing a qualifying energy-efficient home are eligible for up to a 25 per cent mortgage insurance premium refund. If you purchase a qualifying $400,000 home with 5 per cent down, you are eligible for up to a 25 percent refund of your $15,200 in mortgage insurance premiums. That’s $3,800, a substantial savings!

Existing homeowners who make retrofits to improve energy efficiency can also apply for this refund. You’ll be required to complete an NRCan energy assessment evaluation pre and post retrofit, and you’ll need to improve your home’s energy efficiency by the required amount. Of course, your home’s energy improvements will also reduce your costs for years to come!

To find out more information about energy savings improvements and how it can benefit you, speak to an expert at MiMortgage.ca. Contact us at 1 866 452-1100 or apply online now!


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Bridge financing: what you need to know

A bridge loan is a short-term financing tool that helps you “bridge” the gap between old and new mortgages when you move from one home to another. You may be taking possession of your new home a week or two in advance of closing on your current home, either because of how your closing dates worked out, or because you want to do some renovating on your new home before you move in. Whatever the reason, bridge financing is going to be your best friend for a few weeks: making it possible to easily transition from the old to the new.

Here’s what you need to know:

  1. It’s for a specific amount, which is your home’s selling price minus your current mortgage and costs (realtor and legal fees).
  2. It’s for a short period of time e. 1 to 30 days, and your lender will want to see a firm sale agreement for your existing place, with conditions waived.
  3. Not all lenders offer bridge loans, although there are private lenders that meet this need.  Since you are working with a mortgage broker, you are in good hands: We can put together a combination of a new mortgage and bridge loan even if it’s not with the same lender.
  4. Expect to pay more. Your bridge is going to be at a higher rate than your mortgage, and will include administration fees, even when the bridge loan is with the same lender. Bridge loans from private lenders will likely have higher rates and fees, although they may offer more flexible terms.  For most homebuyers, the convenience is worth it!
  5. Plan in advance just in case. Together we’ll discuss your ability to carry two mortgages in the event that a rare worst-case scenario plays out. Your lawyer will pay out your bridge loan from the sale proceeds of your home. If for any reason the sale falls through, your lawyer will register the bridge loan as a charge on the property. And if you require a longer bridge i.e over 30 days, or for an amount over the lender’s maximum, your lender may register a charge against the property and your costs will increase

Most homebuyers say a bridge was well worth it to buy some extra time for a smooth transition. If you think you’ll need a bridge, let’s talk. Contact the team at MiMortgage.ca at 1 866 452-1100 to speak to an expert now. Our ability to offer you multiple lending options definitely works in your favour!


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Does your financial house need a good spring clean?

Wouldn’t spring cleaning be so much more gratifying if – somewhere under dusty barbecue parts and outgrown hockey skates – you found an envelope with, say, $5,000 in cash? Wouldn’t that make spring cleaning worthwhile? While you may not uncover a financial windfall when you’re cleaning the garage this spring, a little time and attention to the task of spring cleaning your financial house can be very rewarding.

Are you continuously carrying a large monthly balance on your credit cards; financial clutter that can be very costly? You may have a golden opportunity to roll this debt into a low-rate mortgage, giving you big interest cost savings, and greatly improving your monthly cash flow.

Worried about penalties? Don’t think it can make much difference? Think again. It can be as good – or better – than finding the $5,000 envelope of cash in your garage.  If you have enough equity in your home (you can’t refinance a mortgage above an 80 per cent loan to value), it’s worth taking the time to have your situation reviewed to see if you can benefit. Contact the experts at MiMortgage.ca at 1 866 452-1100 today!


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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!