Getting A Mortgage After A Divorce Or Legal Separation:

When clients have decided to divorce or separate, what are their next steps?

It is very important that both clients keep up all credit payments including credit cards, loans, lines of credit and especially their mortgage payments.
They must prepare or have prepared a legal separation agreement. The agreement should be prepared by a lawyer or completed by one of the DIY versions available online and notarized.

The agreement should list how the assets are to be divided and any spousal or child support payable or receivable.

It is very important to note that when clients are planning on selling the marital home that they have the sale proceeds in hand before purchasing a new home. While it is possible to do a bridge loan for the down payment funds, it is usually very difficult to do as both parties would need to agree to and sign the bridge loan document.

If a client is struggling with their down payment, it is possible for them to qualify to withdraw their RRSPs under the HBP – Homebuyer’s Plan without any tax implication.

We are also able to help either party remortgage the marital home with only 5% Down/Equity.

Please watch our video and like it on YouTube and refer to our “Getting A Mortgage After A Divorce Or Legal Separation” handout for more information. Please feel free to share.

Click the link below for our YouTube video!
https://www.youtube.com/watch?v=M-7zhy7sYPs

Please Contact The Mainstream Mortgage Team for more information

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Today’s blog is so good.  It is so easy for a first time home buyer to get all caught up in the moment.  However, at calm and steadfast approach to home buying is required.   Love the house? GREAT!  Look at the roof, mechanicals, appliances and structure.  Even if some of these items require attention, get quotes and find out how serious the challenges are.

enjoy the blog…

5 MISTAKES FIRST TIME HOME BUYERS MAKE

Buying a home might just be the biggest purchase of your life—it’s important to do your homework before jumping in! We have outlined the 5 mistakes First Time Home Buyers commonly make, and how you can avoid them and look like a Home Buying Champ.

1. Shopping Outside Your Budget
It’s always an excellent idea to get pre-approved prior to starting your house hunting. This can give you a clear idea of exactly what your finances are and what you can comfortably afford. Your Mortgage Broker will give you the maximum amount that you can spend on a house but that does not mean that you should spend that full amount. There are additional costs that you need to consider (Property Transfer Tax, Strata Fees, Legal Fees, Moving Costs) and leave room for in your budget. Stretching yourself too thin can lead to you being “House Rich and Cash Poor” something you will want to avoid. Instead, buying a home within your home-buying limit will allow you to be ready for any potential curve balls and to keep your savings on track.

2. Forgetting to Budget for Closing Costs
Most first-time buyers know about the down payment, but fail to realize that there are a number of costs associated with closing on a home. These can be substantial and should not be overlooked. They include:

• Legal and Notary Fees
• Property Transfer Tax (though, as a First Time Home Buyer, you might be exempt from this cost).
• Home Inspection fees

There can also be other costs included depending on the type of mortgage and lender you work with (ex. Insurance premiums, broker/lender fees). Check with your broker and get an estimate of what the cost will be once you have your pre-approval completed.

3. Buying a Home on Looks Alone
It can be easy to fall in love with a home the minute you walk into it. Updated kitchen + bathrooms, beautifully redone flooring, new appliances…what’s not to like? But before putting in an offer on the home, be sure to look past the cosmetic upgrades. Ask questions such as:

1. When was the roof last done?
2. How old is the furnace?
3. How old is the water heater?
4. How old is the house itself? And what upgrades have been done to electrical, plumbing, etc.
5. When were the windows last updated?

All of these things are necessary pieces to a home and are quite expensive to finance, especially as a first- time buyer. Look for a home that has solid, good bones. Cosmetic upgrades can be made later and are far less of a headache than these bigger upgrades.

4. Skipping the Home Inspection
In a red-hot housing market a new trend is for homebuyers to skip the home inspection. This is one thing we recommend you do not skip! A home inspection can turn up so many unforeseen problems such as water damage, foundational cracks and other potential problems that would be expensive to have to repair down the road. The inspection report will provide you a handy checklist of all the things you should do to make sure your home is in great shape.

5. Not Using a Broker
We compare prices for everything: Cars, TV’s, Clothing… even groceries. So, it makes sense to shop around for your mortgage too! If you are relying solely on your bank to provide you with the best rate you may be missing out on great opportunities that a Dominion Lending Centres mortgage broker can offer you. They can work with you to and multiple lenders to find the sharpest rate and the best product for your lifestyle.

Geoff Lee

Adjusting your payment frequency and payment amount is an excellent waty to pay your mortgage down faster and help decrease that pesky compounded interest!

Enjoy the blog….

PAYMENT FREQUENCY

One of the decisions you will need to make before your new mortgage is set up, is what kind of payment frequency you would like to have. For many, sticking to a monthly payment is the default, however, different frequencies may end up saving you less interest over time.

Monthly Payments

Monthly payments are exactly as they sound, one payment every month until the maturity date of you mortgage at the end of your term. Took a 3-year term? You will make 36 payments (12 payments a year) and then you will need to renegotiate your interest rate. 5-year term? You will make 60 payments.

$500,000 mortgage

3% interest rate

5-year term

$2,366.23 monthly payment

$427,372.90 remaining over 20 years

$69,346.70 paid to interest

$72,627.01 paid to principal

Semi Monthly

Semi-monthly is not bi-weekly. Semi monthly is your monthly payment divided by two. That means, you are making 24 payments every year, but each payment is slightly less than half of what the monthly payment would of been.

$500,000 mortgage

3% interest rate

5-year term

$1,182.38 semi monthly payment

$427,372.99 remaining over 20 years

$69,258.59 paid to interest

$72,627.01 paid to principal

Bi-Weekly

Bi-weekly, you are not making 2 payments every month. With 52 weeks in a year, you are actually making 26 payments, 2 more than semi-monthly (2 months a year you make 3 bi-weekly payments). The interest paid and balance owing are slightly less than the others, but mere cents. You will still need to make payments for another 20 years.

$500,000 mortgage

3% interest rate

5-year term

$1,091.38 bi-weekly payment

$427,372.36 remaining over 20 years

$69,251.76 paid to interest

$72,627.64 paid to principal

Accelerated Bi-Weekly

Just like regular bi-weekly, you are not making 2 payments every month. With 52 weeks in a year, you are actually making 26 payments, 2 more than semi-monthly. However because this is accelerated, the payment amount is higher.

$500,000 mortgage

3% interest rate

5-year term

$1,183.11 accelerated bi-weekly payment

$414,521.40 remaining over 17 years 4 months

$68,325.70 paid to interest

$85,478.60 paid to principal

You have increased your yearly payment amount by $2,384.98, $11,924.90 over 5-years. That extra $11,924.90 has decreased your outstanding balance at the end of your mortgage term by $12,850.96 because more of your payments went to principal and less went to interest. Also, you will now have your mortgage paid off more than 2.5 years earlier.

The same option is available for accelerated weekly payments which will shave another month off of time required to pay back the whole loan as well. If you can afford to go accelerated, your best option is to do so! Especially in the early years where a larger portion of your payments are going towards interest, not paying down your principal.

If you have any more questions, please do not hesitate to reach out to a Dominion Lending Centres mortgage professional near you.

Get Your Free Credit Report From Borrowell

Today’s blog is all about your credit. Your credit score can be very confusing. There are different credit reporting agencies, banks and credit unions can report to either or both, and your score never seems to be consistant. Free credit scores, such as the link above are a general scoring criteria and are not as indepth as the ones we pay for when we do your credit check for mortgage purposes. Today’s blogs have some tip and trick to ensure that your score is always optimal.

Enjoy the blog…

CREDIT REPORTS: YOU’VE SCORED! BUT ARE YOU PLAYING THE GAME?
For most people, your personal credit score and how a credit score is calculated are complete mysteries. How can you be expected to play and be successful if you aren’t even told the rules of the game? There are things borrowers can do to improve their score so they can access better mortgage products and save thousands of dollars, or qualify for their wonderful home when they otherwise might have trouble. Let’s stick handle through just some of the key things you should know about managing your credit score.

Amount owed and utilization accounts for 30% of your score. There are a lot of people that end up with high balances on their credits cards and struggle to meet the payments each month. If they manage to pay off their credit cards without seeing a mortgage broker to consolidate their debts, often the immediate response is to close the accounts. A better response is to cut up the cards and delete the numbers from your computer and devices and keep the accounts open. You want any remaining outstanding balances to be less than 75% of your total combined credit available, and if they are less than 35%, even better, because this keeps your utilization of available credit low and increases your credit score. Types of credit and the number of different credit products accounts for 10% of the score, so this is another reason you want to keep those accounts open. Cell phone providers are now reporting to the agencies that publish credit scores as well.

In some parts of the world where credit products are not well established, a borrower’s credit is evaluated based solely on how they have managed payments on their cell phone bills. It’s important to pay your cell phone bills on time; we’re all busy, so setup automatic payments to ensure a payment is not missed. My last word of advice for today is to monitor your credit score by purchasing your own credit report each year for about $25 so you know your score and to ensure the report is accurate. This will help you stay within the boundaries of the game.

There is a lot more to managing a credit score than I can get into in this short blog. If you would like to know more, contact me or your local Dominion Lending mortgage broker. We can provide advice to help you manage your credit score and put you in a better position to qualify for a mortgage with better rates. Know the rules of the game, plan ahead for your home financing, and play SMART.

Todd Skene

Appraisals are extremely important and are heavily relied upon by lenders. Getting the optimal value on your appraisal depends upon many things. Today’s blog offers some helpful tips to potentially increase the appraised value.

Enjoy today’s BLOG!

NEED AN APPRAISAL – 7½ TIPS FOR SUCCESS

Do you need to get a current value of your property? Then you are going to need an appraisal.

Banks and other lending institutions want to know the “current” market value of your home before they consider loaning money on the property. An appraiser checks the general condition of your home and compares your home to other similar homes which have recently sold in order to define a comparable market value for your home.

Here are 7½ tips that can help you get top current market value.

Short version – Prepare your home as if it was going to be sold!!

Long version… If a picture is worth a thousand words, think what kind of story the pictures from your home are telling?

In the world of mortgages, lenders seldom set foot on the property before making a loan decision.

Instead, they rely on their trusted list of approved appraisers. All a lender usually gets is the appraiser’s pictures of your property and their comments about how your home was appraised.

Tip #1 – Clean up. The appraiser is basing the value of your property on how good it looks. Before the appraisal, prepare your home as if you’re selling it. Clean and declutter every room, vacuum, and scrub. Do whatever you can to make your home as presentable as possible.
Tip #2 – Pay attention to curb appeal. An appraisal is all about first impressions. And the very first one the appraiser gets is when they walk up to your property. Spend an hour or two making sure the outside of your house, townhouse or condo is warm and welcoming.

Tip #3 – The appraiser must be able to see every room of the home, no exceptions. Refusal to allow an appraiser to see any room will be noted in the appraisal can be a game stopper. There are times when it is not appropriate for the appraiser to take pictures of certain things and appraisers and lenders understand this, but refusal to grant access could kill your deal.

Tip #4 – Make a list of upgrades and features. It’s important that the appraiser is made aware of any updates you’ve made, especially those which are hidden, like new plumbing and electrical. If possible, give the appraiser this list. That way they have a reference as to what has been updated and how recent or professional that work was done.

Tip #5 – If you need to spend to update, be prudent. Many people think “bathrooms and kitchens” are the answer for getting high prices on home value. They aren’t. First, consider that kitchen and bathroom remodels can be some of the priciest reno costs. For that reason, it may be more prudent to spend a bit of money, for just a bit of updating. Paint, new flooring, new light or plumbing fixtures don’t break the bank, but can provide a dramatic impact and improve your home’s value.

Tip #6 – You know your neighbourhood better than your appraiser does. Find out what similar homes in your neighbourhood have sold for. Your property might look like one down the street, but if you believe the value of your property is worth more, let them know why.

Tip #7 – Lock up your pets. I’m sure most appraisers like pets, but some may be put off by your cat rubbing against their leg or the dog barking or following them around.

Tip #7½ – One last tip – don’t annoy the appraiser with questions and comments and follow them around. Instead, simply be prepared to answer any of their questions and, if you do have concerns or queries, wait until they’ve completed their viewing of the property, then ask.

Mortgages are complicated, but they don’t have to be… Engage a Dominion Lending Centres mortgage expert!

Kelly Hudson
KELLY HUDSON

Well I think it’s fair to say that most Manitobans are done with elections. We would like to thank all of the candidates who ran provincially and federally this year and congratulate all those elected.

As an industry, Mortgage Professionals are always advocating for better mortgage lending policy and regulations. Our very own Angela Calla sums up what the federal election will mean for you!

enjoy today’s blog,

WHAT THE ELECTION RESULTS MEAN FOR YOUR MORTGAGE

With all the news we have seen on the election, I thought I would sum it up from a mortgage industry perspective.

What the liberal win means for your mortgage:
1. We will see the continuation of the First Time Home Buyers’ Incentive. Check out the link for more information here:
2. Property Transfer Tax modifications were on the platform, so we will await the date that change is applicable.
3. Consumers will still be able to withdraw up to $35,000 from their RRSPs as part of the government’s Home Buyers’ plan.
4. Bank of Canada Rates may not decrease as expected this year – unless there is a significant downtown in the market suddenly- based on the snapshot of recent activity that doesn’t appear as likely. It certainly makes it easier for the lenders not to pass the decrease down the line to the consumer.
5. We will likely see a national housing tax implemented in addition to the provincial ones already in place.
For items 1, 2 & 5, here is a link. https://globalnews.ca/news/5893892/trudeau-liberals-first-time-homebuyers-program-expansion-campaign-promise/

It doesn’t appear we will see any of the changes to the stress test or amortization hoped for by many.
Stay tuned for more updates and what the BOC decides to do Oct. 30 and Dec. 4.
While the constant in our market will always be change, Dominion Lending Centres mortgage professionals are here at the frontlines to help you navigate the market to your advantage and save you money. Please reach out to us with any mortgage questions on how we can help you or those you care most about.

Angela Calla

I’m always going on about 2nd opinions. Renewals are the most important time for a 2nd opinion.

MORTGAGE RENEWALS WITH THE SAME LENDER ARE ON THE RISE, BUT SHOULD YOU JUST SIGN ON THE DOTTED LINE?

If you’re in a mortgage that’s coming up for renewal in the coming months and you’re considering just staying with your current lender, you wouldn’t be alone.
According to the Canadian Mortgage and Housing Corporation’s (CMHC) Residential Mortgage Industry Report released in the summer, in 2018, the number of mortgage renewals with the same lender increased by 16 per cent over the previous year.
The report suggested one of the factors that may have contributed to large increases in loan renewals with the same institution are the tighter approval criteria. In other words, people are worried they may not qualify for a new mortgage if they switch lenders, so they’re staying put.
You’ll remember in the fall of 2017, OSFI, (the Office of Superintendent of Financial Institutions) the agency that regulates the financial industry, announced tighter rules on mortgages. The biggest change related to uninsured mortgages, or homebuyers with 20 per cent or more for a down payment. These people are now required to go through a “stress test” or qualify using a minimum qualifying rate.
The changes came a year after a similar stress test was introduced for insured mortgages.
If the tighter mortgage rules still have you stressed as you face a mortgage renewal, the CMHC report noted the approval rate for same lender renewals remained stable at 99 per cent. Renewals are not specifically subject to the new stress test and are more likely to meet current lender criteria, the reported noted.
So, does that mean you should just automatically renew your mortgage with the same lender when your term is up? Not necessarily. You need to reach out to a mortgage professional to get the best advice.
For starters, most lenders, especially the big banks, will send you a renewal letter when there’s about three months left on the term. Sometimes that letter could come with six months left. Typically, the lender will offer you a rate at that time and all you’ll have to do is sign at the bottom line to roll over your mortgage.
But beware, lenders often offer a higher rate than a new client because they’re hoping the ease of renewal will keep you from seeking out a new lender and lower rate.
In some cases, it may be best to just sign and roll over your mortgage. There are a few things to consider. If you decide to change lenders, you’ll basically have to go through an approval process again. That entails getting all your documents, lawyer’s fees and appraisals.
You’ll have to ask yourself, is it worth the effort to save a few basis points off your rate, or a few hundred dollars over a term to make the switch?
For some it won’t be. But, if a switch can lead to saving thousands of dollars, it would certainly be something to consider. While everyone’s situation is different, the larger the mortgage, the bigger the savings will be if you can find a lower rate.
Often, homeowners will just use a bank their parents recommend for their first mortgage. But they might find themselves not happy with the service or terms of the mortgage and may just want to switch to a different lender as the mortgage comes up for renewal.
If that’s a situation you find yourself in, you have options, and a Dominion Lending Centres mortgage broker can help you make the best decision.

Jeremy Deutsch
JEREMY DEUTSCH

CLIENT SUCCESS STORY: CHIP REVERSE MORTGAGES
A retired couple on fixed pensions found themselves struggling to make ends meet each month. Both were in good health and wanted to maintain an active lifestyle. They had spent their working years paying off their mortgage and had little saved in their RRSPs.

Now both in their 70s, they’re mortgage free. They love their neighborhood and want to remain in their family home. Like many people who live in the Greater Vancouver Area, their house has increased in value significantly and is now valued at $850,000.

We were able to access the equity in the couple’s home and free up $300,000 in a reverse mortgage, which can be received as a lump sum payment or as monthly payments. These funds are tax-free and will not affect their CPP (Canada Pension Plan) or OAS (Old Age Security) payments.

The clients are now in a position to increase their day-to-day spending, undertake some home renovations, take a trip or use the funds however they desire. They’re not required to make any payments on the amount as long as they reside in the property for six months of the year.

Their fixed pension income was sufficient for qualification as it demonstrated there were enough funds available to cover the annual property taxes and insurance costs. The clients can now enjoy staying in their home, retaining ownership and continuing to enjoy the increase in property value.

The Details

Value of Home

$850,000.00

Amount of Funds Released

$300,000.00 was accessed by using equity in the couple’s home. No payments are required provided the clients live in the home for six months of the year.

LTV

64%

Income Documentation

CPP & OAS statement

Deposit of CPP & OAS with current bank statement

Credit Scores

712 & 745

Total Debt Services Ratios

38%

Mortgage Solutions

$300,000.00 was accessed by utilizing the equity in the client’s home. No payments are required provided the clients live in the home for 6 months out of the year—making these retirees happy and able to enjoy their retirement!

If you find yourself in a similar situation to the above, we would encourage you to reach out to a broker and find out what options are available to you. As always, if you have any questions about any mortgage product, or a CHIP reverse mortgage, reach out to your Dominion Lending Centres Mortgage Broker to learn more!

Geoff Lee
GEOFF LEE