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.
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
Tags: Building Inspection, Buying a home, Home Inspection
Posted in Mortgages, Purchasing, Services, Uncategorized | No Comments »
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.
Tags: Fixed Rate, Interest Rates, Prime Interest Rate, Variable Rate
Posted in Mortgage Help, Services, Uncategorized | 1 Comment »
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
Tags: Life insurance, Mortgage Insurance
Posted in Mortgage Insurance, Uncategorized | No Comments »
March 31st, 2010
There are two types of Insurance to learn about relating to mortgages. The first one I am going to discuss is Mortgage Default Insurance. (also known as Mortgage Loan Insurance) This insurance is used by banks to protect themselves if you default (do not pay) on your mortgage payments.
The most common provider of Mortgage Default Insurance is “CMHC” The Canadian Mortgage and Housing Corporation. This is a government run company that supplies the Lender, usually at your cost, insurance on your mortgage in case you default. Default insurance is the “vehicle” that allows you to borrow up to 95% of the value in your home. Without access to default insurance, a lender will not go higher than 80% loan to value.
Other insurance companies in Canada that provide Mortgage Default Insurance include Genworth Financial, and AIG
Once a lender approves your mortgage; they then will submit it to an insurance company for acceptance. If the insurance company will not support the deal then it is likely the lender will turn it down.
Mortgage Insurance premiums are calculated on the total loan amount, and range anywhere from 0.5% to 6%.
On a $200,000 home with 5% down a typical CMHC premium would be 2.75%
Purchase Price $200,000
Downpayment $10,000 (5%)
Mortgage $190,000
CMHC Premium $5225
Total Mortgage Owing $195,225
You can save paying the Mortgage Default Insurance premium if you have 20% or more as a downpayment.
Tags: AIG Insurance, CMHC, Genworth, Insurance, Mortgage Insurance
Posted in Mortgage Help, Mortgage Insurance, Uncategorized | No Comments »
March 24th, 2010
What is the new HST?
Effective July 1st, 2010 the Government is implementing the Harmonized Sales Tax in Ontario. This means that services that are currently NOT subject to Provincial Sales Tax of 8% will now be taxed. ….at a rate of 15% which is a combination of the current GST of 7% + Provincial Sales Tax of 8%.
How does this affect Buying a Home?
Services that are part of the Home Buying process; Home Inspection, Appraisal, Real Estate Fees, Legal Fees, Moving costs etc; are currently only taxed at 7% GST. Starting July 1st these services will all be taxed at 15%. As a buyer you are going to be paying more for all of these services.
What about Buying a NEW home in Ontario after July 1st 2010?
Yes; you will pay HST on the purchase of a new home……but……
Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.
This rebate ensures that buyers of homes priced up to $400,000 (about three-quarters of new homes built in Ontario) will, on average, pay no more – or possibly even less – tax than under the PST system.
For a full list of services that are affected CLICK HERE
Tags: Harmonized Sales Tax, HST, Mortgages
Posted in Mortgage News, Uncategorized | 1 Comment »
March 19th, 2010
Are you consider purchasing a Rental Residental property with 1-4 units?
I have been investing in Rental properties for the past 7 years. I would like to share with you at this time HOW I evaluate a residential rental property that I am considering buying.
I will use the following property as an example: 319 Broadway Ave, Orangeville Ontario as listed on 519Property
(See my calculations below). What I look for:
a) property should be cash flow positive
b) Return on Investment; I like to be higher than 10%, the calculations below do not include ROI for increase in property value; which would increase the ROI even more
c) there is room for a second mortgage so that I do not need to come up with the entire 20% down payment
Based on this evaluation; this is an excellent investment. Other things to consider when buying a rental property;
-who pays the utilities; tenant or landlord?
-what is the “Curb” appeal of the property (how it looks from the outside can have a great impact on quality of tenants)
-is it currently rented and if so what are the terms of the leases (one year, month to month)
CMHC is implementing new regulations in April that are tightening up lending on Rental Properties. They will not insure a mortgage more than 80% loan to value, and they are only going to use 50% of the rental income to qualify the debt ratios. There are other options available to Investors than going through CMHC insurance. I would be happy to talk to you on how you can still buy a property with less than 20% down. If there is a property that you are interested in I will prepare free of charge a complete analysis like the one below for you.
sarah@dropmyrate.ca
| 319 Broadway Supplimentary Mortgage Information |
|
|
|
|
|
|
|
Monthly |
Annual |
|
| Rental Income |
$ 3,100 |
$ 37,200 |
|
|
|
|
|
|
| Less Expenses: |
|
|
|
|
Insurance |
$ 250 |
$ 3,000 |
|
|
Prop Tax |
$ 300 |
$ 3,600 |
|
|
|
|
|
|
| Net Income |
$ 2,550 |
$ 30,600 |
|
|
|
|
|
|
| Mortgage Info: |
|
|
|
| DownPayment |
|
20% |
$ 83,800 |
| Mortgage amount |
|
80% |
$ 335,200 |
| Interest Rate |
|
4% |
|
| Monthly Pmts (35 yr am) |
|
$ 1,484 |
| ***OAC |
|
|
|
|
| Monthly Cash Flow |
|
|
$ 1,066 |
| Annual Cash Flow |
|
|
$ 12,792 |
| Annual ROI |
|
|
15.26% |
Tags: Investing, Mortgages, Rental Property
Posted in Commercial Mortgages, Mortgages, Services, Uncategorized | 2 Comments »
March 15th, 2010
Welcome to spring Homeowners. If you are like me, there is ALWAYS a renovation project for your home either in progress or on your “to do” list. A few years ago I wanted to finish my basement to add a playroom and a spare bedroom. Last year my Windows needed to be replaced. This year it is the roof. I doubt it will ever end.
When faced with the question of how to pay for all of these renovations, I was thankful that I had a good mortgage professional to work with me and help me get the Funds I needed by using the equity in my home.
Now that I am a Mortgage Agent, I hope I can return the favor to you my fellow homeowner and help you turn your renovation dreams into reality.
-New Gourmet Kitchen
-Finish your basement
-Add a swimming pool
-Energy efficient furnace
-New windows, new roof
What is on your list this year?
Sarah Hurson Mortgage Agent#09002165
sarah@dropmyrate.ca
For more information please complete the confidential contact form below, or on our Contact Page, or email me directly sarah@dropmyrate.ca
Tags: Home Renovations, Mortgage refinance
Posted in Mortgages, Uncategorized | No Comments »
March 12th, 2010
As a Mortgage Broker, and a mother of 3, I would like to congratulate you on your upcoming arrival.
For you, the coming months will be filled with planning, shopping, doctor’s appointments, and a total overload of information!
What I found was missing when I was pregnant was information & help to plan for the Financial changes that I was about to experience. Maternity Leave benefits cut my income drastically, and on top of that the added expenses of diapers, baby clothes totally overwhelmed me. I did not know that had I taken a few easy steps before I had my baby, that the first 5 years of my family would have been much less stressful financially.
Have you thought about your finances for the coming years?
I would love the opportunity to show you what can be done NOW to make the coming years less stressful financially, so you can spend more time enjoying your new baby!
Sarah Hurson Mortgage Agent#09002165
sarah@dropmyrate.ca
For more information please complete the confidential contact form below, or on our Contact Page, or email me directly sarah@dropmyrate.ca
Posted in Uncategorized | No Comments »
March 11th, 2010
Here are a few tips to keep in mind to ensure your credit is in good standing:
Pay your bills on time: always pay your credit cards, lines of credit, car leases, store credit cards etc. on time. Even if you make the minimum payment each month make sure you pay it on or before the due date. Never let any other items go into collections.
Check your credit report for accuracy and often-at least once a year request from Equifax or TransUnion a copy of your own credit report. Make sure that there are no items that you do not recognize. Unfortunately Identity Theft is a real problem in Canada; so you want to make sure that there are no accounts being opened in your name that you are not aware of.
Keep your credit card balances in check; never go over your maximum balance and wherever possible only use 75-80% of the available credit.
If you have no credit, or have a previous bankruptcy you will need to rebuild your credit score. But how can you do that if the bank will not approve you for a credit card? You can actually get a pre-paid credit card that will help you rebuild your credit. Ideally you want to have a few credit cards/store cards with approx $2000-$2500 of available credit which you are making the monthly minimum payments each month on time for about a year after bankruptcy to then start thinking about a mortgage.
Tags: bad credit, Credit score, Mortgages
Posted in Bad Credit, Mortgage Help, Uncategorized | 1 Comment »
March 9th, 2010
Are you considering buying your first home? Or perhaps you are re-entering the housing market? If you are currently paying rent, there is a good chance you can afford a mortgage.
Buying a home does not need to be a stressful time, it should be exciting and fun. If you have excellent professionals on your side they will glide you through the process effortlessly. Find the right Real Estate Agent and Mortgage Agent and they will be able to help you through the rest.
How Much Down Payment Do I Need?
You only need to have a 5% down payment to purchase a home. You should also make sure that you have a little extra for closing costs; for example Land Transfer Tax, your Lawyers Fees, etc.
The 5% can be withdrawn from an RRSP. It can also be borrowed from another source, i.e. a credit card or line of credit. Your downpayment could also come from a Gift from a family member or friend.
What is a Pre-Approval?
A Pre-Approval is when your Mortgage Broker processes a Mortgage Application for you and gets you pre-qualified to purchase a home. This is beneficial in so many ways most importantly:
-tells you how much you can afford so you know what price range of home you should be shopping for
-gives you a competitive edge when placing an offer over another bidder who is not pre-approved
What is the First Time Home Buyers Tax Credit?
Visit the Government of Canada website for more information and speak to your Tax Accountant to see if you qualify
What type of Mortgage should I choose?
Speak to your Mortgage broker about the benefits of each type of mortgage. You probably will have a choice between a Fixed Rate Mortgage, and a Variable Rate Mortgage. With some lenders a Variable Rate mortgage can be converted at any time to a Fixed Rate, so you can have the benefit of both. Many first time homebuyers feel more comfortable with a Fixed Rate Mortgage, so they can easily budget their monthly payments.
How do I get started?
Complete our confidential contact form (below) or on the CONTACT page
We will email you a Mortgage Application Form. This gives us your basic financial information and will allow us to complete a free confidential assessment for you, to tell you IF you qualify for a mortgage and for HOW MUCH.
(*all information is O.A.C. and subject to income & debt qualification ratios)
Tags: buying a house, First time home buyer, New home
Posted in Mortgages, Services, Uncategorized | 7 Comments »
