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Archive for April, 2010

Self Employed? Stated Income (not verified)

Monday, April 26th, 2010

Are you self employed?  Concerned about how the new CMHC Mortgage Insurance Rules affect you?

If you have NOT been in business for 3 years (but in the same type of work for 2 years even if not self employed) AND

You do NOT claim / declare all of your income then you have access to the CMHC insured financing for purchase transactions up to 90% LTV or 85% for refinances

Purchases: with as little as 10% down (90%LTV)

Refinances: up to 85% of the value

Other requirements:

-Income taxes must be paid and up to date

-Must provide copy of business or GST licence, or Articles of Incorporation

-Min credit score 600 (to qualify for 90% purchase credit scor must be 650+)  for 90% purchase or 85% refinance generally you can not have any late payments for last 2 years

For more information please complete our confidential comment form below, or on our Contact Page or email

mortgages@dropmyrate.ca

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Self Employed? In Business 3 years and Income is Verified?

Monday, April 26th, 2010

Are you self employed?  Concerned about how the new CMHC Mortgage Insurance Rules affect you?

If you have been in business for 3 years AND

You claim / declare all of your income & your income is verifiable by a Third Party; i.e. Revenue Canada via Notice of Assessment & Tax Return, or Audited Financials Statements for your business then you have access to the same mortgage products as salaried borrowers.

Purchases: with as little as 5% down (95%LTV)

Refinances: up to 90% of the value

Other requirements:

-Income taxes must be paid and up to date

-Must provide Notice of Assessment, and financial statements prepared by practicing accountant

-Min credit score 600

For more information please complete our confidential comment form below, or on our Contact Page or email

mortgages@dropmyrate.ca

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New to Canada? Mortgages for Newcomers

Monday, April 26th, 2010

YES!!!

As a newcomer to Canada it is possible for you to purchase your own home with as little as 5% down.

CMHC offers the following program to new residents:

Features

Newcomers with permanent resident status have access to all CMHC
Mortgage Loan Insurance products (subject to product specific eligibility
requirements).
For permanent residents, where there is limited Canadian credit history
and where foreign credit bureaus are not available, CMHC continues to
consider alternative sources of payment history for Loan-to-Value ratios
between 80.01% and 95%
Newcomers with non-permanent resident status have access to CMHC
insured financing of up to 90% loan-to-value ratio for the purchase of a 1
unit owner-occupied residential property
No additional fees or premiums as a result of residency status – standard
product specific premiums apply
No minimum period of residency required

APPLY NOW TO FIND OUT IF YOU ARE ELIGIBLE FOR THIS PROGRAM!

If you have any questions you may contact one of our Mortgage Agents to discuss YOUR options, either complete the confidential comment form below, or use our Contact Page,

Toll free 1-866-712-3943

email mortgages@dropmyrate.ca

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Bank of Canada Keeps Overnight Rate for NOW

Wednesday, April 21st, 2010

The Bank of Canada announced yesterday that they would maintain their overnight rate at 0.25%.

This means that the Prime Lending Rate will remain for now at 2.25%.  The next chance for the Bank of Canada to raise their rate is June 1st.  It is expected at that time that they will start to increase the rate.

Variable Mortgage rates, which are tied to the Bank of Canada overnight rate and the Prime Lending Rate, remain unchanged as a result.

Lenders are currently offering 5 year Variable Mortgages at Prime – 0.5%.  This means that you can lock in these terms for 5 years.  The Interest Rate of 1.75% would be your interest rate now until the bank of Canada raises their rate.  Then your interest rate would go up, probably by 0.25%.  Your monthly (or weekly or bi-weekly) payment will also go up.

Current 5 year fixed rates are sitting at 4.39 %(best rate out of 30 lenders).  Only if the Bank of Canada increased their overnight rate 10 times during the term (5 year), would you be paying equal to or more interest than a variable rate mortgage.  Remember that a variable rate mortgage can always be converted to a fixed rate mortgage at any time during your term as long as you stay with the same lender.

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Let us Pay for YOUR Home Inspection!

Friday, April 9th, 2010

If you are buying a home, no matter what the age, please do yourself a favour and get a Home Inspection completed by a certified Property Inspector. So many problems or potential problems with a home may not be visible to the naked eye, and can cost you thousands in repair bills down the road.  A Property Inspector should provide you with a comprehensive report that identifies any potential areas of concern with the :

Foundations / Wall Structures / Floor Structures

Roof

Electrical System

Plumbing System

Heating System

Windows

EXAMPLE OF A GOOD HOME INSPECTION REPORT

But Beware!

Beware of Home Inspectors who are not what they claim.  A recent episode of Marketplace focused on Grow Ops that the Home Inspectors should have easily identified to the unsuspecting buyers.

Safe Homes Canada

Is an example of a company that only uses Registered and fully Qualified Home Inspectors, and has saved homeowners thousands of dollars.

www.safehomescanada.com

WE WILL PAY FOR YOUR HOME INSPECTION

On all new mortgage applications received until June 30th 2010, we will reimburse you for the cost of your Home Inspection.

** Note the following conditions apply to this promotion: on purchases only, deal must successfully close, all mortgages are O.A.C., no commercial properties, single family homes only

Call us today for more information

1-866-712-3943

Or complete the confidential comment field below

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Fixed vs Variable Mortgage Interest Rates

Wednesday, April 7th, 2010

Many people shopping for a mortgage are often confused about the advantages and disadvantages about a Fixed vs a Variable Interest rate on their mortgage.

By definition a Fixed Interest Rate does not change for the entire term of the mortgage.  A Variable rate mortgage changes each time that the Lender’s Prime Rate changes.  This is usually directly linked to the Bank of Canada Rate.

As of today, the Bank of Canada’s rate is 0.25, and the Prime Lending Rate is 2.25%.  The next possible rate increase is April 20th.  The Bank of Canada has 8 opportunities during one year to decide to raise their prime lending rate, or leave it unchanged.  Experts currently are estimating that the Prime Lending Rate will start to rise by this summer.

Fixed Interest Rates:

Benefits of a Fixed Rate:

Easy to budget; your payment will remain constant for the term of your mortgage.   Security; you can feel secure that your rate will not change for the term of your mortgage.  This is usually the choice for First Time Homebuyers.

Cons of a Fixed Rate:

Potential loss of savings if you are paying more than the variable rate

Variable Interest Rates:

Benefits of a Variable Rate:

Savings!  Generally a Variable Rate mortgage will save you the most money in interest.

Ability to switch to a Fixed Rate; most variable rate mortgages are easily converted to a fixed rate at a point that the borrower chooses.

Lower penalty to break your mortgage; most Variable Rate mortgages have a penalty to break the mortgage equal to 3 months interest.  Most Fixed Rate mortgages have a penalty that is the greater of 3 months interest or the Interest Rate Differential.  Low fixed rates have been creating havoc in recent years where the Interest Rate Differential is costing borrowers thousands of dollars more to break their mortgage.

Cons of a Variable Rate:

Budgeting: your monthly payment may change, either go up or down, depending on the prime lending rate, so it is more difficult to budget your cash flow each month.

Risk; there is some level of risk if the interest rate rises.  Thus it is important for a borrower who chooses a variable rate to be informed and watch the Interest Rates.    You can also talk to your Mortgage Agent about watching the markets for you.

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Life Insurance Protection on your Mortgage

Friday, April 2nd, 2010

Most lenders will automatically offer you life insurance protection on your mortgage. This is different than Default Insurance. Default Insurance protects the lender if you do not meet your payments. Life Insurance is to protect the lender in case of death.

Life Insurance offered by the lender usually only will cover the amount owing on the mortgage, only benefits the lender (not your family), and decreases over time as your mortgage decreases (but your premiums stay the same).

Most mortgage and Insurance professionals agree that a better approach to protecting your estate in case of the untimely event of your death is to seek a Term Life Policy that will benefit your estate & your family, from which they can then choose to pay off the mortgage.

For more information on Life Insurance please visit the following pages for resources:

http://www.insuremymortgage.ca/mortgageinsurance.html

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