The best part about being a mortgage broker is having access to many programs that banks and credit union may not participate in. The Flex-down program is just such a program. It is a great way for home buyers who are having a hard time saving up for their down payments and closing costs. Closing costs alone can be so expensive with land transfer tax, legal fees, pst, home inspection, title insurance and sometimes even property tax adjustments. A small loan for $10,000 or $15,000 can make all the difference in qualifying your for a home that will suit you and your family.

Enjoy today’s blog below!

THE FLEXIBLE DOWN PAYMENT PROGRAM
One of the toughest challenges for homebuyers is being able to save money at the rate of property price increases.
We know many high-income renters would like to be homeowners, but they’re just unaware of how to make the transition and are unable to save fast enough.
There are several options which are great for a down payment if you can use a combination or one of the traditional methods
1. Savings
2. Gift from parents
3. RRSPs
4. Selling an asset
5. Inheritance

Kindly keep in mind this option won’t be for everyone as the following criteria must be met; it’s simply to illustrate the opportunity to go from renter to owner as soon as possible.
The Flexible Down Payment program allows homebuyers to use existing credit facilities as their down payment.

DETAILS:
Minimum household income required is $200,000 combined
• Minimum 650+ beacon score
• Minimum two years history reporting on Credit Bureau
• Sources of down payment: line of credit, credit card, personal Loan
• Include borrowed down payment in the debt servicing of the deal. Example: Unsecured LOC at 3%, Credit Card at 3%, store brand Credit Card at 5%, Personal Loan at actual payments.
• No late payments in the past 36 months
• High Ratio Deals only: 90.01-95% LTV
• 25 year amortization
• Strong Employment History
• No previous bankruptcy or consumer proposal

We can walk you through the details, contact a Dominion Lending Centres mortgage professional today!

Angela Calla
ANGELA CALLA
Dominion Lending Centres – Accredited Mortgage Professional

THE MORTGAGE INSURANCE MARKET & WHOLESALE LENDERS
The Canadian mortgage market used to be very simple. We had the big banks, credit unions, and trust companies.

However, almost 20 years ago, the Canadian government made three major changes to the Canadian mortgage industry. First, the government and CMHC put their weight behind Canadian mortgages by guaranteeing an insurance payout to lenders in the event that a borrower does not pay. Yes, the Canadian taxpayers are on the hook if CMHC goes under.

Second, Canada also began to allow lenders to pay for mortgage insurance for their borrowers, even though the insurance was not required. Borrowers would not know that their mortgage is insured, rather the lender would pay for, and insure the mortgage on the “back end” in order to make the mortgage less risky. I.E: if the borrower did not pay, the insurer would pay the lender (just as they would pay if the borrower had less than 20% down payment and was charged for insurance themselves).

And third, Canada allowed its lenders to bundle up their mortgages and sell them to investors. The securitization of mortgages (the process of taking the mortgages and transforming them into a sellable asset) allowed investors to purchase many mortgages at once, knowing there would be a specific return. The return here would be just less than the interest rate on the various mortgages (less because the lender has to make a little bit of money for creating the mortgage bundle or security).

Now, mortgage investors are looking at two things: investment return and mortgage risk. The lower the risk of an investment, the lower the return an investor may be willing to see. Because Canadian lenders can insure their mortgages against default (non-payment), investors are very keen on purchasing these mortgages. Thus, investors provide lenders with a lot of inexpensive money to lend out, which in turn, provided for better interest rates for borrowers.

As an aside, an example of investors may be one of Canada’s large banks, an American bank, pension funds, and/or other financial institutions.

The result was the emergence and major growth of mortgage finance companies, called wholesale lenders or monoline lenders.

Monoline lenders, encouraged by access to cheap capital, set up efficient mortgage underwriting (approval) operations and were able to provide flexible mortgage products and better-than-the-banks interest rates for their clients.

The overwhelming majority of wholesale lender mortgages are back-end insured by the lender, packaged up, and sold to investors.

What is interesting here is that wholesale lenders will insure mortgages transferred from one institution to another – something that banks do not do. This allows for better interest rates when renewing with a wholesale lender than if renewing with your current bank lender.

If you have any questions related to mortgages, contact your Dominion Lending Centres mortgage professional today.

Eitan Pinsky
EITAN PINSKY
Dominion Lending Centres – Accredited Mortgage Professional

Having been in this industry for about 20 years, I can honestly say I don’t know what I would have done personally without all of the excellent REALTORs I have had in my life. Leigh Nanton patiently helped me with my first home in 1998, then Karen Machut with my condo purchase, duplex purchase, and home purchase and sale and my best friend Susan Joshi with the construction of our current home.

Realtors are a very hard working group of professionals. Countless hours of work, driving and counseling their clients. We refer about 40-60 clients each year to our REALTOR partners and absolutely love the service and level of professionalism we receive from them. Today’s blog will give you some information about choosing a REALTOR to help you.

Enjoy the blog…

WHICH REALTOR SHOULD YOU USE?

Finding the best realtor for you involves doing some leg work. It can be overwhelming, kind of like choosing which ice cream you want to try! You go to the ice cream store and they have over 50 flavours and after you have contemplated, you opt for vanilla, just because it was easy.

Finding the best realtor for you is not “vanilla.”

Here are five questions you should always ask your potential real estate agent:

1. How does your experience benefit my real estate transaction? Where the agent just completed a course on negotiation skills or sold a home in your neighbourhood, they should be able to bring a unique edge to the table.

2. If you were buying or selling your home, what would you look for in an agent?
This question is a great way of getting the inside scoop on the industry. What do industry professionals see as an essential asset? How does each agent vary in those priorities?

3. Tell me about a recent work success. Give the agent a chance to discuss their latest win, and you’ll learn what they’re passionate about and how they’ll turn your home search or sell into their newest achievement.

4. What are your most effective approaches to marketing a home? Rather than the standard ‘how will you market my home,’ ask which methods are delivering results. If your agent is particularly successful with new school social media or tired and true networking, you’ll have expectations on how they’ll tackle selling your home.

5. Give the rundown of the conditions, commission fees and agreements. These basics will play a major role in how you choose your real estate agent. Ask for the specifics at each interview, and you can see how each partnership measure up.

And if you have any questions, contact your local Dominion Lending Centres mortgage professional.

Karen Penner
KAREN PENNER
Dominion Lending Centres – Accredited Mortgage Professional

THE MOST IMPORTANT QUESTION THIS SPRING
Short Version:

The most important question a home-seller must ask their Broker or their banker this Spring:

‘Do I QUALIFY to port my mortgage?’

You must re-qualify to port your mortgage to a new property, and you must re-qualify under stringent new rules.

How stringent?

Long Version:

Let’s say you have impeccable credit, a $100,000 income, and bought a house with a basement suite last year – you may have a mortgage of ~ $675,000…which you qualified for in 2017.

In 2018, you new maximum mortgage amount is closer to ~$530,000.

And if rates were to move up another 0.50% you’d be capped at ~$490,000.

If rates were to move up a full percentage point ~$455,000

Either way, even with no further upward movement, the family in this example, were they to enter into a binding sale agreement without confirming their qualifications would not be able to re-enter the market at the same price point.

Key Point – Do not ask if your mortgage is ‘portable’ (99% are). Ask if you currently qualify to move your mortgage to a new property. This will require an actual application and full review.

Key Point – The federal government has created a dynamic in which qualifying rates have shifted radically, and more precisely the ground has shifted under tens of thousands of middle class Canadians feet. You have been protected from yourself, and you don’t even know it.

Key Point – Since Jan. 1, 2018, you’re subject to the new stress test. Even though you have impeccable credit, have never missed a payment, and even got a 3% raise last year – too bad.

Conclusion

Don’t list your home for sale without having something in writing from your current lender confirming that you QUALIFY to move your existing mortgage to a new property. If you have any questions, contact your local Dominion Lending Centres mortgage professional.

And if you’ve personally been caught in this ‘portability trap’, by all means make your voice heard. Share your story with me directly and also here; www.tellyourmp.ca

DUSTAN WOODHOUSE
Dominion Lending Centres – Accredited Mortgage Professional

Apparently, as per the weather experts, March has a lot of snowfall and surprisingly so does April!
Hearing this on the radio gives you a wave of emotions: holy cow, oh great, I wonder how many vacation days I have left and when can I take down my Christmas lights.
Good news, those same weather experts are predicting a hot summer and you know what that means! Buy your fan(s) now before they run out and check out a pool, size and budget appropriate, for the backyard. So glad we have a compressor to blow that thing up every year; three rings take a lot of breath!
Normally by April you are thinking about moving because you need a bigger home, you need to down size, or its time to leave the basement of your family home.
Those weekends where you have little to do so you opt to go out, get a coffee and go to show homes and see how they decorate because the DIY on TV is all reruns. While you are there, you start to picture yourself living there and then begin to wonder, “can I do this?” Do I want to want to do all the landscaping, do I need a developed basement now or later, where are the schools? Maybe should I think about an already established community with lots of schools, trees, or place that my cat and I can live.
Working with your Dominion Lending Centres Mortgage Professional, we will review your options, your affordability, possible extra costs that you may have missed and finally, get you pre-approved!

Prequalified or rate hold, what is the difference?
Your broker has asked you for supporting documentation that will confirm your income, you do indeed have a down payment, and your debt is not more than you can handle along with possible new housing costs. This is so they can start the application to ensure the numbers are good and we can begin.

Rate Hold – it is just that, a rate that lender is offering and, based on the application submitted to them, it shows the numbers are in alignment for them to hold a rate for you. This rate can be held anywhere from 90 – 120 days. Remember, they have reviewed the application submitted only and no other supporting documentation.
Prequalified – it is just that, the lender has reviewed the supporting paperwork along with the application and is in happy to provide you with a prequalified letter stating they not only are they holding the rate for 90 – 120 days, depending on which lender, but you have met their criteria for lending.
o Although once you present you offer they may still have a few more items they want to check:
▪ You still working? – you will need a current paystub
▪ You still working at the same place?
▪ You didn’t buy a new car, right? Ugh!
▪ You didn’t get new furniture and finance it with the store, right? Ugh!

Ask your advisor about the DO’s and DON’Ts; this one single sheet of paper will make or break a deal!
Prequalified or rate hold, now you know the difference.

Karen Penner
KAREN PENNER
Dominion Lending Centres – Accredited Mortgage Professional

The Spring home buying frenzy is well underway. Many listings are starting to get multiple offers on the offer date. The questions we always get from REALTORs and Homebuyers is “How can we write an unconditional offer?”

The simple answer is you really can’t. I know, many REALTORs and many Homebuyers take huge and monumental risks by writing a clean or unconditional offer. A big risk it is too. If for some reason the application is not approved, the homebuyer faces losing their deposit and can also be sued by the vendor.

Before we talk about how to be more competitive and better prepared, I think it important to discuss what a lender and the mortgage insurer is looking for in a mortgage application.

The mortgage application is subject to many factors. The most important is the property itself. The home should be in good to great condition. It is important to review the property disclosure statement if available and to look for any questions where the vendors may have disclosed something detrimental to the application. Some examples of things that can red flag and application are; knob-and-tube wiring, aluminum wiring, foundation cracking, water seepage, wood heating and wood foundations just to name a few.

The next major factor in a mortgage application is the strength of the homebuyers. As mortgage professionals, we must check and analyze your credit, your income, and your down payment. It sounds simple, however, there are many moving parts. Let’s break this down further to give you a better understanding.

Credit: Typically we are looking for a credit score of 620 or higher. While exceptions can be made for lower credit scores, this is generally the lower limit. We are also looking for two active trade-lines. This means a borrower must have two open and active credit facilities such as a credit card, loan or line of credit. If your mortgage professional, bank, or credit union has not checked your credit, then your pre-approval is probably invalid.

Income: A borrower must be a permanent employee and off of probation. You can be Full-Time or Part-time but your hours must be guaranteed by the employer. If a borrower does not have guaranteed hours, then we must use a 2-year average for income at the same job. Lenders will now go the extra step and call your employer to verify your employment and guaranteed hours.

Down Payment: Generally, your down payment needs to be in a Canadian financial institution for 90 days. As mortgage professionals, it is imperative that we can see your banking/financial statements to verify the down payment. We must look for any large deposits in the last 90 days that are unusual. Any large deposits need to be verified. For example, a borrower has sold a car, received a gift, or deposited wedding gift monies. The funds need to be verified or the lender will not be able to fund your mortgage.

Now, how can you be more prepared and competitive in a hot market?

1). When your mortgage professional asks you for a lot of documentation. Provide it as soon as possible. Employment letters, recent pay stubs, 2 years T4s, 90-day confirmation of your down payment, void cheque and ID are standard.

2). Use a professional REALTOR and introduce them to your mortgage professional. I can speak from experience and if the REALTOR and the Mortgage Professional are on the same page, the process goes much faster and smoother for the homebuyer.

3). Found THE house and going to put in an offer? Let your mortgage professional know. Send them the MLS listing and PDS – property disclosure statement (if available) in advance so they can look for potential challenges.

4). Always keep your documentation up to date. Credit bureaus expire after 30 days, Employment letters and paystubs expire after 60 days, and most importantly a borrower must provide up-to-the minute bank and financial statements for down payment.

5). Please ensure that you offer an amount that you are actually qualified for. If you offer more than your pre-approval amount, chances are that you won’t be approved.

6). Have your deposit in your bank account and ready to go. Your REALTOR will want you to have $5,000 – $10,000.

Do not leave anything to chance. Be over-ready and confident in your offer.

I look forward to helping you with all of your home financing needs.

Peter Paley

What usually follows once someone hears the term “Monoline Lender” for the first time is a feeling of suspicion and lack of trust. It’s understandable, I mean why is this “bank” you’ve never heard of willing to loan you money when you’ve never banked with them before?

In an effort to help you see the benefits of working with a Monoline Lender, here is some basic information that will help you understand why you’ve never heard of them, why you want to, and the reason they are referred to as lenders, not banks.

Monoline Lenders only operate in the mortgage space. They do not offer chequing or savings accounts, nor do they offer investments through RRSPs, GICs, or Tax-Free Savings Accounts. They are called Monoline because they have one line of business- mortgages.

This also plays into the reasons you never see their name or locations anywhere. There is no need for them to market on bus stop benches or billboards as they are only accessible through mortgage brokers, making their need to market to you unnecessary. The branch locations are also unnecessary because you do not have day-to-day banking, savings accounts, investment accounts, or credit cards through them. All your banking stays the exact same, with the only difference of a pre-authorized payments coming from your account for the monthly mortgage payment. Any questions or concerns, they have a phone number and communicate documents through e-mail.

Would it help Monoline Lenders to advertise and create brand awareness with the public? Absolutely. Is it necessary for them to remain in business? No.

Monoline Lenders also have some of the lowest interest rates on the market, the most attractive pre-payment privileges, and the lowest pre-payment penalties, especially when compared to a bigger bank like CIBC or RBC. If you don’t think these points are important, ask someone whose had a mortgage with one of these bigger banks and sold their property before their term was up and paid upwards of $12,000 in penalty fees. An equivalent amount with a Monoline Lender would be anywhere from $2,000-$4,000 in fees.

Monoline Lenders are not to be feared, they should be welcomed, as they are some of the most accommodating and client service-oriented lenders around! If you have any questions, don’t hesitate to call your local Dominion Lending Centres mortgage professional.

Ryan Oake
RYAN OAKE
Dominion Lending Centres – Accredited Mortgage Professional

KEEPING YOUR CREDIT SCORE HEALTHY
If you haven’t seen your credit score, you’re not alone.

Many of our clients don’t know about their credit score or even know what it is when we first meet with them. During our initial consultation, we go over your complete credit report with you. As an added bonus, we’ll even teach you how to read it.

So, how can you make sure you have a great credit score? Here are a few tips to get you started.

You need to have credit. It may be surprising – but your credit score goes up as more credit is available to you. We recommend at least two facilities: a credit card and a line of credit (or 2 credit cards).
You also have to pay your bills when they are due. That goes for your internet, cell phone and even parking tickets.
It also helps to start as soon as possible. The longer you have a clean record of paying your credit card, loans or other credit facilities, the better your credit becomes.
Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization.
Don’t ever hesitate to contact a Dominion Lending Centres mortgage professional about your mortgage related needs when you’re buying a property anywhere in Canada.

Eitan Pinsky
EITAN PINSKY
Dominion Lending Centres – Accredited Mortgage Professional

REFINANCING IN 2018
Recently there were changes to the mortgage rules yet again, and one of the rule changes was regarding refinancing your home. At one point in the last 10 years you could refinance your home all the way back up to 95% of its current value, which in many cases has put that property what we call under water or upside down. Basically, real estate markets ebb and flow and if you refinanced to 95% when we were at the crest of a market wave then as markets rolled back you were underwater… clever huh.

Fast forward a few years and the government said ‘what a minute, that is dangerous’, and it was. Clients now had no options for that property except to keep it, hoping values came back or turn it into a rental and hope to break even. At this point the government now said you can only refinance your home to 80% of the value which of course meant you needed to have equity in the property of at least 20% to make a change. This was an insurable product for many of our monoline lenders at this point, so it was something that was competitive in the market.

Welcome to 2018 and today you can still refinance your home to 80% but the Office of the Superintendents of Financial Institutions (OSFI) and CMHC now say that as a lender you can no longer insure this product. What does that mean for the average consumer? First off, it means that lenders across the board are not offering the same rate for insured mortgages as they are for refinances. The point spread between insured and uninsured mortgages has grown to, on average, .30% higher for 5-year fixed rates and it is .55% higher for variable rates.

To add to this extra cost, the new rules of qualifying at 5.14% which is currently the benchmark rate, applies to all mortgages including refinancing. Overall, the changes make it tougher to refinance and forces Canadians to seek alternative options to take equity out of their homes. In many cases this will mean looking to the private sector at higher rates when they need that money. If you have any questions about refinancing, contact your local Dominion Lending Centres mortgage professional.

Len Lane
LEN LANE
Dominion Lending Centres – Mortgage Professional

Our own Pauline Tomkin discusses what you need to know before your mortgage renews. IT is really important to do your due diligence to ensure you are in fact getting the best rate and terms for your personal situation. A 2nd opinion could save you $1000s of dollars in unnecessary interest and fees. Enjoy the blog!

WHAT YOU NEED TO KNOW BEFORE YOU RENEW YOUR MORTGAGE
What you need to know before you renew your mortgage could save you thousands of dollars. Is your mortgage on your home or other properties maturing in 2018?

Typically you will receive your mortgage renewal notice from your current lender 3-4 months in advance of the renewal date. Sometimes you may receive an offer for early renewal. Either way, always reach out to your Dominion Lending Centres mortgage broker to find out your options and what you need to know before you renew your mortgage.

With the new mortgage rules in effect in October/November 2016 and subsequent changes January 1st 2018 it is more important than ever to know your options before you sign a renewal.

Did you know…?

If your current mortgage is funded before October 2016, regardless if you were a high ratio borrower or conventional borrower, the old rules for qualifying still apply
If you want to renew your mortgage at best rates you can transfer that mortgage to another lender without qualifying under the new rules
If you have any fees for transferring the mortgage they may be covered
Lenders are currently offering high renewal rates as they know 65%+ of borrowers will simply sign without doing any homework
Lenders are currently offering lower rates only after clients decline their first offer. Doesn’t seem fair does it?
Mortgage brokers have access to lots of great renewal programs from the banks, mortgage companies and credit unions.

Be informed before your mortgage renewal. Consult with an independent mortgage broker to review your financing needs for all of your properties and to set a plan well in advance of any mortgage renewal. If you are looking to make any large purchases such as investments, real estate, an automobile— know your options and the impact of these purchases on your financial situation.

Pauline Tonkin
PAULINE TONKIN
Dominion Lending Centres – Accredited Mortgage Professional