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What to Know about Second Mortgages
Mortgage Tips Jag Dhamrait 8 Feb
Mortgage Tips
Understanding Reverse Mortgages
Mortgage Tips Jag Dhamrait 18 Jan
Did you know? Reverse mortgages are continuing to gain popularity for older homeowners in Canada! For many Canadians who are looking to retire but currently facing high debt load and ongoing expenses, as well as reduced income, it can be a challenge. This is where the reverse mortgage can help!
This product is also a great option for anyone wanting to assist their elderly parents. Instead of selling the home and moving them to a care home or assisted living, a reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for in-home and ongoing care costs.
The goal of the reverse mortgage is to allow Canadians over 55 years to tap into the equity of their home, which assists in comfortable financial living. With a reverse mortgage, however, borrowers are not required to make regular payments. This allows them a considerable inflow of cash, without having to pay off what they owe! The only time payment will be required is when you sell or move out of your home.
Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts.
Beyond being able to cash in on your home’s equity, a reverse mortgage also has:
- No monthly mortgage payments
- No income or credit qualifications
- Very low / little paperwork required
- Title and ownership of property remain in homeowner’s name
- Flexible options to break term early if needed
- Penalty waived in the event of death or care home placement to preserve the estate
If you are struggling financially, or want to have a little extra equity on hand to pay off existing debts, gift money to family, expand your quality of life or simply increase your investment portfolio, contact me today! I would be happy to discuss the possibility of a reverse mortgage in further detail with you and ensure it is the best product to suit your needs.
What to Know About Title Insurance
Mortgage Tips Jag Dhamrait 15 Jan
There are many insurance products when it comes to your home, but not all are created equal. One such insurance policy that potential homeowners may encounter is known as “title insurance”.
This particular insurance is designed to protect residential or commercial property owners and their lenders against losses relating to the property’s title or ownership. In fact, it is so important to lenders that every single lender in Canada requires you to purchase title insurance on their behalf. It is not a requirement to have coverage for yourself, but that doesn’t mean you should dismiss it outright.
While title insurance can protect you from existing liens on the property’s title, the most common benefit is protection against title fraud.
Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. As the old adage goes: “It’s better to be safe than sorry” and the same goes for insurance.
Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property. This insurance typically runs around $300 for the lender and $150 for the individual. It can be purchased through your lawyer or title insurance company, such as First Canadian Title (FCT).
If you are wanting to know more about title insurance, or confirm that you (and your home) are properly protected, don’t hesitate to reach out to me today for a mortgage review!
Post-Holiday Debt Consolidation
Mortgage Tips Jag Dhamrait 10 Jan
The holidays are a season of giving and often times, households can often find themselves carrying some extra debt as we enter the New Year.
If you happen to be someone currently struggling with some post-holiday debt, that’s okay! Whether you’ve accumulated multiple points of debt from credit cards or are dealing with other loans (such as car loans, personal loans, etc.), you are likely looking for a way to simplify your payments – and reduce them.
Rolling them into your mortgage could be the perfect solution. In fact, consolidating other forms of debt into your mortgage has multiple benefits, including:
- Helping you pay off your loans over a longer period of time
- Allowing for reduced interest rates when compared to a credit card
- Being easier to track with one single payment per month
- Reduce your total monthly outlay of debt repayments
If you’re still not sure if this is the right solution for you, here is an example… if you have $30,000 of credit card debt, you are probably paying approximately $600 per month and $500 per month of that is likely going directly to interest. If you let me help you to roll that debt into your home equity and monthly mortgage, your payment for this $30,000 portion would drop down around $175 per month, with interest charges closer to $140 per month. That is huge savings!
While debt consolidation through refinancing will increase your mortgage, the benefits can be well worth it when it comes to interest savings, time and stress. Keep in mind, you’ll need a minimum of 20 percent equity in your home to qualify for this adjustment.
If you are looking for a way to simplify (or get out of) debt, reach out to me today! I would be happy to take a look at your current mortgage and walk you through the debt consolidation process, or help you come up with an alternative option that may help suit your needs.
New to Canada Program: Getting a Mortgage When You’re New to Canada
Mortgage Tips Jag Dhamrait 28 Apr
Canada has seen a surge of international migration over the last few years. In 2019, we welcomed a total of 313,580 immigrants to the country! This is an increase of 40,000 individuals when compared to 2017 numbers.
According to planned immigration levels, it is estimated that Canada will receive 341,000 permanent residents in 2020. In 2021, we are expecting 351,000 and 361,000 in 2022. Federal Immigration Minister, Marco Mendicino, stated that by 2022, “the year’s new permanent residents in Canada will account for one per cent of the population”.
With all these new faces wanting to plant roots in this great country, we wanted to touch base on how new immigrants can qualify to be homeowners!
PERMANENT RESIDENTS
If you are already a Permanent Resident or have received confirmation of Permanent Resident Status, you are eligible for a typical mortgage with a 5% down payment – assuming you have good credit.
NOT YET PERMANENT RESIDENTS OR HAVE LIMITED CREDIT
For Permanent Residents with limited credit, or individuals who have not yet qualified for Permanent Residency, there are still options! In fact, there are several ‘New to Canada’ mortgage programs. These are offered by CMHC, Sagen and Canada Guaranty Mortgage Insurance, and cater to this group of homebuyers.
NEW TO CANADA PROGRAMS
To qualify for New to Canada programs, you must have immigrated or relocated to Canada within the last 60 months and have had three months minimum full-time employment in Canada.
Individuals looking for 90% credit, a letter of reference from a recognized financial institution. Or, you will be required to provide six (6) months of bank statements from a primary account.
If you are seeking credit of 90.01% to 95%, you will need to produce an international credit report (Equifax or Transunion) demonstrating a strong credit profile. Or you will need to provide two alternative sources of credit, which demonstrate timely payments for the past 12 months. The alternative sources must include rental payment history and another alternative. This could be hydro/utilities, telephone, cable, cell phone or auto insurance.
ALTERNATIVE LENDERS
Another option for New to Canada residents, depending on your residency status and credit history, are alternative lenders such as B-Lenders and MIC’s (Mortgage Investment Operation). If you do not qualify for the New to Canada programs, or a standard mortgage, I can help you navigate the alternative options!
New to Canada? Before submitting your mortgage application
Utilizing a mortgage professional like me will ensure you understand your options. I can also help determine the best program and mortgage choice for you. There are a few things you need to know when it comes to submitting an application – and getting approved – for your first mortgage in Canada:
SUPPORTING DOCUMENTS!
If you’re new to the country but have weak credit, supporting documents will be needed. These may include: proof of income, 12 months worth of rental payments or letter from landlord, documented savings, bank statements and/or letter of reference from recognized financial institution. These documents all paint the picture of whether you are a safe investment for a lender.
BUILD YOUR CREDIT RATING!
This is one of the most important aspects to getting a mortgage! Your credit rating determines your reliability as a borrower. In turn, this will determine your down payment rate. A great way to build your credit is by getting a credit card to use and pay off each month. Paying other bills such as utilities, cell phones and rent can also contribute to your credit score and reliability.
START SAVING!
One of the most expensive aspects of home ownership is the down payment, which is an upfront cost but is vital to securing your future. As mentioned, the down payment can either be 5% or 10% depending on your status. However, if the purchase price exceeds $500,000, the minimum down payment will be 5% for the first $500,000 and 10% of any amount over $500,000 – regardless of your residency status.
CHOOSE A MORTGAGE PROVIDER!
I can help you review your options and find the best mortgage product to suit your needs.
Buying a house is an exciting step for anyone, but especially for individuals who are new to the country. As daunting as it may seem, purchasing a home is completely possible with a little knowledge and preparation. If you are new to Canada and looking to get a mortgage, connect with me today for expert advice and options that best suit you!
What is a Reverse Mortgage?
Mortgage Tips Jag Dhamrait 6 Apr
Did you know? Reverse mortgages are continuing to gain popularity for 55+ homeowners in Canada! For many Canadians who are looking to retire but currently facing high debt load and ongoing expenses, as well as reduced income, it can be a challenge. This is where the reverse mortgage can help!
This product is also a great option for anyone wanting to assist their elderly parents. Instead of selling the home and moving them to a care home or assisted living, a reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for in-home and ongoing care costs.
The goal of the reverse mortgage is to allow Canadians over 55 years to tap into the equity of their home, which assists in comfortable financial living. With a reverse mortgage, however, borrowers are not required to make regular payments. This allows them a considerable inflow of cash, without having to pay off what they owe! The only time payment will be required is when you sell or move out of your home.
Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts.
Beyond being able to cash in on your home’s equity, a reverse mortgage has additional benefits including:
- No monthly mortgage payments.
- No income or credit qualifications.
- Very low / little paperwork required.
- Title and ownership of property remain in homeowner’s name.
- Flexible options to break term early if needed
- Penalty waived in the event of death or care home placement to preserve the estate.
If you are struggling financially or want to have a little extra equity on hand to pay off existing debts, gift money to family, expand your quality of life or simply increase your investment portfolio, contact me today!
I would be happy to discuss the possibility of a reverse mortgage in further detail with you and ensure it is the best product to suit your needs.
Selling Your Home in the Winter
Mortgage Tips Jag Dhamrait 6 Mar
While you might think selling your home in winter is harder, with the right considerations it doesn’t have to be!
When selling your home during warmer months, the focus is typically on curb appeal and gardening, as well as having bright colours and patterns to draw out different rooms. While curb appeal should not be forgotten in winter months, the focus should be centered on creating a warm, comfortable and welcoming space. Below are some tips on how to do this:
- Curb Appeal: If you live in an area that receives high amounts of snow, be diligent about keeping your sidewalk and driveways clear for visitors, and to keep your home looking clean for the viewing. Always make sure to sweep any fallen leaves or debris.
- Keep it Cozy: Ensuring your home is sufficiently heated during showings will also go a long way to making it feel more comfortable; a steady 68 to 70 degrees Fahrenheit during showings is ideal.
- Light and Inviting: With days being shorter and darker during winter, ensuring your home is well-lit and inviting can make a big difference. In some cases, you may consider repainting the walls before listing your property.
- Declutter: When selling, it is important to declutter your home so that it looks its best and gives room for people to imagine their own belongings in your space.
- Define Property Boundaries: If you are showing your home in the middle of snow season, be sure to mark the four corners of your property so that potential buyers can see exactly what they are getting.
While there is some extra work with selling your home in the winter due to the weather conditions, it can pay off! Buyers tend to be highly motivated and often there is less competition for sales during this time giving more focus to your home.