Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Real Mortgage Story for June 2018

Farid & Afra resided in the Greater Toronto Area (GTA) with their three dependant children. They both have stable income and good credit. The couple were looking to buy their first family home in the GTA and were successful in securing a property. Farid & Afra were referred to the team at Mortgage Intelligence-Oshawa by their realtor, two weeks prior to their scheduled closing date, as the couple was not successful in obtaining mortgage financing through a mainstream bank.

The couple had accumulated debt over the years and as a result there debt servicing ratios were higher than usual, which made the transaction difficult. The MiMortgage.ca team was successful in obtaining mortgage financing by using some unconventional income, within four days, from an institutional lender.

The terms of their mortgage:

  • Downpayment 22%
  • Interest rate of 4.69% for five years
  • Monthly payments of $2,190

In the meantime, Farid & Afra also decided to concurrently explore alternate routes of obtaining mortgage financing for their property and the team at MiMortgage.ca did not hear back from them until four days prior to the closing date. The team at MiMortgage.ca were able to get signed mortgage documents, an appraisal, meet all the lender conditions and have their lawyer instructed with within four days. This particular lender worked diligently to close this transaction in within a few days and the transaction closed one day later than the scheduled date.

If you are in similar financial circumstances, maybe it’s time to get in touch with the experts at MiMortgage.ca. We have access to over 50 lenders and are able to provide the best possible mortgage solution, for you. Contact the team at MiMortgage.ca at 1.866.452.1100 to speak to an expert or apply now.

 


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Love that low loonie: is your U.S. home a piggy bank?

There’s a silver lining to the low loonie if you happen to own a home south of the border. A few years ago, a wave of Canadians took advantage of a strong loonie and low U.S. home prices – and picked up some American real estate. Those homes are as good as a piggy bank now.

Why? If you refinance your U.S. home, you can bring those U.S. dollars back to Canada at the current exchange rate. That powerful U.S. dollar is your financial friend, and we don’t know how long it will last. You could use the money to pay off any debts in Canada – or even use the proceeds to purchase another Canadian property. The goal is to get those U.S. dollars back over the border to Canada.

By the way, selling the home triggers capital gains. Refinancing does not.  Any income you generate by exchanging your dollars doesn’t count as capital gains, so you don’t pay tax when you exchange your US dollars for Canadian dollars. You also get to keep your vacation property.

Many Canadian owners of U.S. homes rent out the property when they’re not using it – giving them rental income to maintain the home and pay down the mortgage.

Most property values have rebounded well from their lows; so many owners are also taking advantage of the growth in their U.S. home equity. A U.S. bank will typically lend 60% of the appraised value of a property.

If you own a home in the U.S., let’s chat.  Contact us at 1 866 452-1100. We have an excellent relationship with a U.S. lender that is licensed in Florida and California. You may be able to give your wealth-building a boost!


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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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Verifying Your Income

Collecting documents that you need to verify your income is a critical component of mortgage financing. Rushing around at the last minute to collect income verification documents only adds unnecessary stress.

Here’s what you need to provide depending on your employment status:

If you are thinking of getting in to homeownership, it’s time to meet with the team at MiMortgage. We will carry-out an assessment and let you know how much financing you would qualify for, and the documents you need to provide. Contact us at 1 866 452-1100 to speak to an expert 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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Are you ready to buy a home?

There’s lots of perks for owning your own home – monthly payments you make will be towards paying off your mortgage instead of paying a landlord, build home equity, become a part of a community and you can decorate the way you want!

Here’s what you need to know, to get started..

To find out more about how much you can qualify for, get in touch with the team at MiMortgage.ca. Call us at 1 866 452-1100 to speak to an expert or apply online now!

 


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Why Mortgage Before March 17?

db14142_fb_homeowners_i14759090_miIf you’re in the market for an insured mortgage, then you might want to get that mortgage before March 17.

Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes for the third time in three years. Canadian homebuyers are required to have mortgage insurance if they have less than a 20 per cent downpayment. The insurance provides protection for the lender in the case of a default.

How will it hit your wallet? The increase is not too significant for those making the minimum downpayment required. A homebuyer with a $250,000 mortgage and a 5 per cent downpayment will only pay about $5 per month more in insurance premiums.  We can calculate exactly how much the increase will mean to you if you get your mortgage approval on or after March 17.

The increases are actually more substantial for larger downpayments of 15 per cent or more. Those with 20 per cent or more downpayment aren’t required to have mortgage insurance, although it’s used by lenders that securitize their mortgages. As a result, any increased cost will likely be passed on to customers through higher rates.

Premiums are also increasing for “non-traditional” insured mortgages i.e. home buyers with borrowed downpayments, a type of mortgage downpayment that could grow in popularity as homebuyers strive to gain entry in the housing market.

The premium change will come into effect on March 17. Homebuyers will be able to access the current lower rates if they have bought a home and are approved before the March 17 deadline, even if they have a later closing date.

If you are looking to buy, get in touch with the team at MiMortgage.ca 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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Your Home & Mortgage

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Be prepared with your income verification

One of the most critical components of a successful mortgage approval is verifying your income. Being prepared up front will make the entire process easier and less stressful.  Here is a summary of the different types of income and what is acceptable as verification to lenders.

Full-time salary: Provide a recent paystub and letter on company letterhead of employment signed by an authorized officer confirming position, annual salary and length in position. If you are new to your position, the letter must state that you are no longer on probation. Lenders will follow up and confirm these details. Commissions and bonuses can be supported by averaging your last two notices of tax assessments.

Commission, contract, part-time, 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.

Self-employed: Two years of tax assessments, a business license/registration or articles of incorporation and the last 2 years T1 general tax returns or 2 years of accountant prepared financial statements if incorporated. Since the amount of income is purposely kept low, some expenses on the statement of business activities can be added back. If income is difficult to prove then be sure to have a strong credit history and downpayment.

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 per cent of total income.

Disability: A letter confirming permanent status along with a paystub.

Maternity leave – Some lenders use full employment income if the employment letter confirms a return date within one year.

Pension/RRIF/Investment income: Most recent tax assessment, T4A’s for pension income. There must be sufficient funds in the investment to support the income being withdrawn.

Being fully prepared to verify your income will make a considerable difference to your stress level and mortgage success.  If you have any questions, ask! Contact us now to speak to an expert or to get pre-approved, apply now through our secure website.


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Ten great reasons to use a mortgage broker

DB15036_financialconcepts_62023960For many Canadians, mortgage payments are their single biggest expense. Yet most don’t shop around and compare to ensure they are getting the best mortgage rate and terms available in their circumstances, which can cost them tens of thousands of dollars over the term of their mortgage. So don’t make that same mistake! Here are 10 reasons why you need a mortgage broker working for you:

  1. Choice.  We work with a wide range of lenders, including major banks, credit unions, and other national, regional and private lenders will instantly become accessible to you, ensuring that your specific needs are matched to the right mortgage.
  2. Great rates. Get money in your pocket by taking advantage of Mortgage Intelligence’s clout with lenders. Our stellar reputation and longstanding experience allows us to negotiate great rates and access limited time specials.
  3. A focused expert.  A mortgage is a very significant financial event. That’s why you want someone who is highly specialized in mortgages and focused solely on your needs. You will get advice that will make a significant difference in your financial life.
  4. Independence & objectivity.  We work for you, not the lender.
  5. Solutions when you need them.  We can assist with funding for bank turndowns, the self-employed, past credit problems, etc. There are mortgages for almost any situation and we know them all.
  6. Save time. Everything relating to your mortgage can be managed around your busy schedule.
  7. Service, service, service. We will be with you every step of the way, to answer all your questions, outline your best options, and efficiently guide you through the process.
  8. Ongoing support.  Our services don’t stop after the mortgage closes. We will stay in touch with you for the term of your mortgage with advice and opportunities.
  9. No cost (oac). The winning lender pays compensation for the services and solution provided, which means no fees for you in the vast majority of cases.
  10. Your satisfaction.  Our goal is to ensure that you are so completely satisfied with your mortgage experience that you will be happy to refer us to your family, friends and colleagues.

Thinking of homeownership, renewals or refinancing? It’s worth having that conversation with the team at MiMortgage.ca to find out your options.