Thursday, 18 May 2017

Deposit on a Home Purchase

Many people don't have thousands of dollars in the bank to make a deposit for the purchase of a home. The deposit forms part of the down payment. The problem for many people is that they need to sell their current home first to get the down payment.

The deposit is made upfront upon subject removal even though they might not own their new home for a couple of months! In the meantime, they have not received money for the sale of their current home; and they were planning on using the equity in their home to make the down payment including the deposit.  Don't ran away screaming....there is a way out!

Solution:  a deposit loan.

*One of the deposit loans that I offer is very simple.

Flat fees only, no extra interest.

Loan size:
Up to $25 000       cost $500
$25 000 - $50 000   cost $750
$50 000 +    cost $1000

If you own your own home and want to move, don't let the deposit be a barrier. Give me a call with no obligation.

There are so many things to think about when you want to sell your home and purchase a new one! In working with a good mortgage broker and a good realtor, you don't have to think of everything yourself. A strong team will makes things possible!

*Fees are subject to change without notice and subject to conditions.

Wednesday, 26 April 2017

What Every Home Buyer Needs

The best mortgage service that a new buyer can get is a full mortgage pre-qualification, and preparation process. The term "pre-approval" is often used to describe this process but the term "pre-approval" is misleading, and the pre-approval process needs to be sharpened for a competitive real estate market.

1.  A pre-approval can give a buyer a false sense of security. Some online pre-approval applications don't require full disclosure from the applicant. The borrower might be able to get a rate hold, but the rest of the application is not really of value.

2.  Many pre-approvals don't require supporting documents from the borrower. Documents are only required after the buyer has made an accepted offer. This does not set up the buyer for highest possible chance of success in the purchasing process.  An example of the importance of upfront document collection was a client who had to request a job letter three times from her employer to get the correct letter for her mortgage. In a competitive real estate market, delays in getting documents can really hold a buyer back.

3.  Some pre-approvals don't qualify for the maximum mortgage allowed. Sometimes there are more options available when the deal goes "live" - meaning you have made an accepted offer.  A simple pre-approval does not necessarily give you all of the information that you need. A comprehensive pre-qualification process will give you the information you need.

4.  Many buyers don't qualify for a pre-approval because their mortgage will be in the Alt-A mortgage category where there are no pre-approvals. Since the new mortgage rules came into affect, over the last few months, more people are in the Alt-A category.  There are slightly higher rates in Alt-A and slightly easier rules.  A pre-qualification process is designed to explore many options.

A better system:

A home buyer gets a final pre-qualification based on supporting documents. The documents (job letter, pay stub etc.) ensure accurate numbers. All mortgage types are explored because different types of mortgage can alter decisions.

When the pre-qualification process is done, a rate hold can be obtained. A rate hold is what is often called a pre-approval.  And it does what it sounds like it does. It holds an interest rate for you even if interest rates are rising. Most often a better mortgage can be obtained when the deal is live. The rate hold is just a back up plan in my opinion.

There is no doubt that "pre-approval" is the language that buyers are used to. It is an effective word used in advertising and is a hook! However, a home buyer is better off with a full pre-qualification and preparation process.

Better Advice, More Choice, and Peace of Mind!
Remember M for Mortgage!


Friday, 21 April 2017

Financing a Home Renovation

The cost of renovations of a home are often better bundled into a mortgage rather than paying the high interest rates of a consumer loan.  It sounds straight forward?

Yes, but you need a to know your full mortgage options.

Real life example:

I am currently arranging a renovation mortgage for clients whom I assisted two years ago when they bought their first house. They recently approached me asking for a refinance. A refinance would involve breaking the old mortgage and paying the penalty and then getting a new mortgage with a higher balance. Before proceeding with their request, we explored all options first. 

1.  The refinance they originally requested would involve over $6000 in penalty costs; and the new mortgage would be at a slightly higher rate than the original mortgage.  This option is doable and while there are costs, it is still reasonable.

2.  A second mortgage at 3.8% fixed rate would be a better option. They would not have the penalty to pay because they would leave the first mortgage intact. The rate is excellent for a second mortgage and because the amount they need for the renovation is about $50 000, the slightly high rate would not cost them a lot in dollars.

3.  A second mortgage as a home line of credit was my recommendation. The rate worked out to be 3.2% (P=0.5%) and the great thing is that they only borrow money as they need it. For example, if stage one of the renovation costs $10 000, then they will only withdraw $10 000 from the line of credit until they need more. The line of credit is also larger than their anticipated costs. This gives them the opportunity to access the line of credit if they decide to do other renovations in years ahead.

Not surprising, the clients agreed that option three was their choice. They were not aware that they had this choice before doing our consultation.

The beauty of the process is that at no point were these home renovators pressured into doing anything. Making an inquiry to have your mortgage options explored, can only be beneficial. 

Better Advice, More Choices and Peace of Mind!

Monday, 6 March 2017

Seismic Shifts in Mortgage Market

The last 6 months have seen seismic shifts in how Canadian mortgages are done. This follows a period of about 8 years of almost continuous tightening of mortgage guidelines. The public has generally only known the tip of the iceberg of these changes.

3 Big-Picture Shifts

1. Your proof of income is more important than ever.  Long gone is the option to qualify without proof of income if the applicant had 35% down payment. Added to that is the recent introduction of the stress test. The stress test ensures that applicants have more than enough income to qualify for their mortgage.

2.  The rate of interest now depends heavily upon the down payment size.  Surprisingly, a person with 5% down payment will often get a smaller rate than a person with 20% down payment! And the person with 25% down payment will get a smaller rate than the person with 20% down payment, but probably not as small as the person paying 5% down payment. Determining interest rate will be even more complicated than that, but the examples give you an idea.

3.  Credit Score is emphasized more in determining interest rate.
High Score = Lower Interest Rates
Low Score = Higher Interest Rates
Rates have always been influenced by credit scores, but moving forward, the credit scores will play an even bigger influence upon interest rate at the individual level.

Complicated? Absolutely!

The whole process can be made easier with a trusted guide. It is the job of the mortgage broker to guide you through this maze to get you the best mortgage possible with your unique circumstances.

Please feel at ease to give me a call to have a confidential discussion about your mortgage options.

Thursday, 16 February 2017

Credit Check Primer

An important part of a successful mortgage application is the credit check.

A credit check is a report from one of the credit bureaus in Canada – either Equifax or Transunion.  The report lists a person’s debts and monthly payments.  The report includes

·      credit cards,

·      lines of credit,

·      student loans

·      personal loans

·      car loans

A credit report will also have a score based on how well a person has managed their debts.

Please be prepared to discuss your credit history with your mortgage broker in the first meeting.  You don't need a credit check in advance, but be prepared to discuss your overall credit situation. The discussion is confidential and it is critical to helping you be successful in buying your home. 

The mortgage broker will tell you the impact of your credit history.  If everything is good, you will be confident in making an offer for a home.  If you had some difficulties with your credit history, the mortgage broker can strategize with you to overcome the issue.  Credit reports are complicated, and you will benefit from professional analysis.

The two credit bureaus in Canada are Equifax and TransUnion.  For your reference you can go online to and

Monday, 12 December 2016

Buying a Home in Winter

Most people don't want to buy real estate in the dead of winter.  There are many people who are going to buy "in the spring".  This attitude makes May the busiest month in real estate.  As a buyer you really want to avoid the time when everybody else wants to buy!

Consider buying in the winter! 

Winter in the Vancouver area is dark and wet!  If you like a home in the middle of dreary January, then it is almost guaranteed you will like that home even more in the pretty month of May.

Here are some advantages:

1.  Home sellers in January are likely serious sellers.  Many realtors advise their clients to sell in the brisk spring market to attract top dollar.  Therefore, the sellers that insist on selling in winter are very serious sellers. Not only might they be more flexible on price but they might also be more flexible on other terms of the sale such as possession date or subject removal date.

2.   There is a reduced chance of a buyer competing in a multiple offer situation during the slow months on the year.

3.  Often prices rise in the spring.

4.  The process of getting a full approval from a mortgage lender will be quicker in January when business is slower.  This reduces a buyer's stress.

5.  Your realtor might be less busy and be able spend more time with you.

One bit of advice about looking for a home in the wet and cold winter months:  wear shoes or boots that easily slip on and off.  It will make the process of viewing homes all the more enjoyable.

Your first step in the real estate process is to get pre-qualified for a mortgage.  Even if you don't end up buying until the spring, a pre-qualification will have you good and ready for the competitive spring market.  Give me a call and we can discuss the best rates for you.

Friday, 25 November 2016

Bah Humbug to Black Friday!

Over the holiday season, many Canadians feel pressure to spend money.  However, it is not uncommon for people these days to be under financial stress.  Instead of waiting until January to face reality, I would love to see people take charge now. 

On this Black Friday when our consumer society encourages us to spend more money, I say “Bah Humbug!!"

Give yourself a different kind of Christmas gift – the gift of some peace of mind.

Problems to address include:

Paying off Canada Revenue Agency!  It would be good to get them off your back!
High balances on credit cards
Collectors after you
Bruised credit.
A feeling of being overwhelmed with financial stress

The first steps in debt payment plans will be different for everybody.
  1. If you have some bad spending habits but are not too far into debt, you are in a good position.  Take charge now.  If you need a money coach, that might be money well spent. 
  2. If your situation is more serious and you own your home, you might be able to refinance, or get a second mortgage.  There are different ways to structure a refinance.  It is not something that you should navigate on your own.  An independent mortgage broker can strategize with you and look at options from different lenders.  Your objectives of saving money, increasing your cash flow and minimizing your stress will be part of the plan.  A broker can often overcome bruised credit as well.
  3. Another option is to see a debt consultant.  I interviewed a friend of mine who is a debt consultant.  He explained that as an independent debt consultant he works entirely on his client’s behalf.  He does not work on behalf of a financial institution.  As a mortgage broker I completely agree that clients are best served by independent advisors who are not affiliated with one company or another.

Knowing your options and addressing the problems of debt is a great way to spend the holiday season.  Sounds like Scrooge, but what the heck!
Now is the time to seek professional advice.  And remember to say "Bah Humbug to Black Friday!".

Call now to find out your options.  And then decide.