Mortgage Intelligence

Oshawa's Mortgage News Desk!


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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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Love It and Renovate!

Looking to do renovations to your home this summer? Speak to an expert at MiMortgage.ca about a refinancing options that’s best suited for you. Contact the team at MiMortgage.ca at 1 866 452-1100 to speak to an expert 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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“Conditional on financing”: the most important part of your offer

When you find the condo or house of your dreams and want to make an offer, do you need a financing condition?  Unless you can pay cash for the home, then yes you do. That little phrase – “conditional on financing” – is an important protection for buyers.

When an offer to purchase is made “conditional on financing”, we gain the time needed i.e. 3 to 5 days to ensure that you are fully approved for the necessary funds. Your lender needs to feel as comfortable about the property as you do and will likely conduct an assessment. After all, the property is the lender’s security if something goes wrong. Even if you have a mortgage preapproval, the lender may decline the property for reasons such as:

  • The address may be just outside the acceptable location perimeter for the lender.
  • Concern over a former grow op, an environment matter, or zoning issues.
  • The appraisal may not match the offer you’ve made.

Don’t let the rush to buy overcome common sense. A preapproval is a guideline only, and a lender could disregard it: especially if your income or financial situation has changed. That “conditional on financing” gives you time to confirm with the lender, and to withdraw the offer if the lender’s queries turn up something negative about the house.

An offer without conditions leaves you and your family on the hook. If the financing falls through, you will lose your deposit, and could be sued by the seller. It’s not the happily-ever-after scenario you envisioned when you made your offer. If you really want to put in an offer with no financing conditions, the team at MiMortgage.ca can assist you in mitigating your risk i.e. review the strata docs, listing information, and contact the lender and insurer about the property prior to writing the offer, which can help eliminate some of the risk but nothing can be 100% guaranteed.  Let the team at MiMortgage.ca help you make sure your homebuying journey has a happy ending.


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Which mortgage features are the most important?

It’s easy to look online for a mortgage rate. But rate is only one aspect of saving money on your mortgage over the long term. It’s essential that you also consider mortgage features. Here are the big ones –

Early Payout Penalties. There are lots of reasons why it makes good financial sense to break your mortgage, even though you can expect to pay a penalty. But not all lenders calculate penalties the same way, and the differences can amount to thousands. Life happens, so make sure you choose a lender that has a fair prepayment penalty. And watch out for no-frill mortgages that don’t let you get out of your mortgage at all, unless you sell or the term is up.

Pre-Payment Privileges. You want the ability to put lump sum amounts on your mortgage and increase your payments so you can pay down your mortgage faster and save on interest. You should always consider having this flexibility even if you don’t think you’ll use it; your situation may change that gives you the ability to pre-pay. This flexibility can also help you reduce an early payout penalty.

Collateral charge mortgage. This type of mortgage can be difficult to transfer to another lender and cost you legal fees if you do. You are more locked in, which means your lender may not offer you the best rates if you need to refinance or at renewal.  Watch out!

Porting Flexibility. This is important if there is a chance you’ll move i.e. job change, growing family. You’ll want to take your mortgage to your new place to avoid penalties.  But make sure your lender lets you increase too should you buy a more expensive home.

Blended Mortgage. If you move or refinance, a blended mortgage allows you to blend the rate of your current mortgage with the rate on the additional funds. This way, you don’t break your current mortgage and incur the penalty. Some lenders blend and extend to a new 5 year term, others blend only to the remaining term, or offer both.

There is definitely more to getting a mortgage than just rate. For more information, contact the team at MiMortgage.ca at 1 866 452-1100 or apply online now! It’s our job to help you find the right mortgage with the rate and flexibility you need to be a happy homeowner.

 


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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!