When you receive your mortgage renewal agreement from your lender, stop! Before you sign anything, it’s crucial to get a second opinion from us at Mainstream Mortgages. Transferring your mortgage has never been easier, and it could save you a significant amount of money.

The Myth of the Best Rate from Your Financial Institution

Many Canadians assume their financial institution will offer them the best rate upon renewal. However, this is rarely the case. Almost 70% of borrowers simply sign and return the first mortgage renewal offer they receive from their lender without seeking a better deal.

It’s important to remember: NEVER, EVER accept the first mortgage renewal offer.

Your Current Financial Institution

Financial institutions, especially large banks, often send renewal offers that are 0.25% to 1.25% higher than the best rates available in the market. They count on the convenience of online renewals and the tendency of customers to avoid negotiation. By simply accepting the offered rate, homeowners end up paying thousands of dollars in unnecessary interest and reducing the amount paid towards the mortgage principal.

The Importance of Shopping Around

It’s wise to start shopping for a new mortgage term between four and seven months before your current term expires. At Mainstream Mortgages, we begin reminding our clients 210 days before their mortgage renewal date. This proactive approach is especially beneficial in a rising interest rate environment, where early renewal can save you from higher rates.

In contrast, during periods of falling interest rates, financial institutions might send renewal offers up to six months in advance, hoping to lock you into a higher rate before rates drop further. This tactic limits your time to find a better deal with another lender. Therefore, it’s essential to track your mortgage term timeframe and start exploring your options early.

Before you hear from your lender about renewing your mortgage, let Peter, Derek, and Colten at Mainstream Mortgages shop around for you. You’ll be amazed at the savings they can secure on your behalf.

Potential Savings: Thousands of Dollars

Your mortgage is one of your largest expenses, and the Mainstream Mortgage Team can help you save thousands of dollars in interest. Securing the best interest rates and terms is critical to minimizing your costs over the life of your mortgage. Don’t be part of the 70% who simply sign and return their renewal offer. Reach out to the Mainstream Mortgage Team instead.

What We Do

When we handle a mortgage renewal, we refer to it as either a switch or a transfer. It’s important to note that this involves a full mortgage application process that must be underwritten by the new lender. Fortunately, in almost all cases, the new lender covers the associated fees (legal, transfer, discharge, etc.). Additionally, if your existing lender charges a penalty or other fee, we can include up to $3,000 of these costs in the new mortgage.

P.S. If your current financial institution offers a better deal, we will be the first to let you know.

House hunting can be both an exciting and daunting experience for first-time homebuyers. Two key steps that can significantly enhance this journey are attending open houses and getting pre-approved for a mortgage. In this post, we’ll delve into the benefits of each and how they can set you on the path to finding your dream home.

The Benefits of Attending Open Houses

Open houses provide a unique opportunity to experience properties firsthand. Photos and descriptions online can only tell you so much. By visiting an open house, you can get a real sense of the space, layout, and overall feel of the home. This is invaluable when making such a significant decision.

Additionally, open houses allow you to assess the neighborhood. You can take note of the surrounding area, check out local amenities, and even chat with potential future neighbors. This can give you a better idea of whether the location suits your lifestyle.

Attending open houses also helps you get a feel for the current market. You can compare different properties, see what’s available within your budget, and understand the value of different features and upgrades. This knowledge can be crucial when you’re ready to make an offer.

Engaging with real estate agents at open houses can also be beneficial. They can provide additional insights about the property, the local market, and the buying process. Building relationships with agents can be helpful as you continue your search.

The Importance of Getting Pre-Approved for a Mortgage

Getting pre-approved for a mortgage is a critical step in the home buying process. First, it helps you understand your budget. A pre-approval gives you a clear picture of how much you can afford to borrow, which narrows down your search to homes within your price range.

Pre-approval also demonstrates to sellers that you are a serious buyer. In a competitive market, having a pre-approval letter can make your offer more attractive compared to those from buyers who have not taken this step.

Additionally, being pre-approved can speed up the buying process. Once you find a home you love, you’ll be ready to move forward quickly, reducing the risk of losing out to another buyer.

Finally, pre-approval can help you avoid disappointment. By knowing what you can afford upfront, you won’t waste time looking at homes that are out of your budget. This focus can make the home buying process more efficient and enjoyable.

Combining Open House Visits with Pre-Approval

Combining open house visits with mortgage pre-approval can streamline your house hunting process. With pre-approval, you can attend open houses with confidence, knowing exactly what you can afford. This allows you to make informed decisions on the spot if you find a property you love.

Being pre-approved also strengthens your negotiating position. Sellers are more likely to take your offer seriously, knowing that you have the financial backing to close the deal.

Conclusion

In summary, attending open houses and getting pre-approved for a mortgage are two essential steps that can greatly enhance your home buying journey. By experiencing properties firsthand and understanding your budget, you can make more informed decisions and find the perfect home for your needs. Start your journey today and take the first steps towards homeownership with confidence.

When it comes to choosing a mortgage, the lowest rate might seem like the obvious choice. However, this common misconception can lead borrowers into tricky situations. In this post, we’ll explore why the lowest mortgage rate isn’t always the best option and what Canadian borrowers should consider instead.

Understanding Mortgage Rates

Mortgage rates represent the interest you pay on your home loan. These rates are influenced by various factors, including the Bank of Canada’s policies, economic conditions, and your credit score. While a lower rate means lower monthly payments, it’s essential to look at the bigger picture.

The Hidden Costs of Low Mortgage Rates

Low mortgage rates often come with hidden costs. Lenders might offset these rates with higher fees, such as processing fees, and other not-so-obvious fees Additionally, low-rate mortgages may have significant penalties for early repayment or refinancing, making them less flexible if your circumstances change, or if you choose to break the mortgage contract early.

Furthermore, low-rate mortgages can come with restrictions. For example, they may not allow for prepayments, have limited portability or may not let you break the mortgage at all (Imagine you try to sell your home and the lender won’t discharge the mortgage). This lack of flexibility can hinder your financial plans if you decide to move or want to pay off your mortgage faster.

Crucial factors to consider:

Comparing variable and fixed rates.
Comparing land title charges – standard vs. collateral.
Comparing title registration amounts – Some lenders instead of registering the amount of your mortgage on the title e.g. ($300,000). Instead of registering $300,000 the lender will register up to $1,000,000.
Comparing features – portability, can the mortgage be assumed, pre-payment privileges
Comparing mortgage penalty calculations – Not all mortgage penalty formulae are the same – choosing the right mortgage can save you $1000s of dollars.

Flexibility and Features Matter

When choosing a mortgage, consider the flexibility and features offered. Prepayment options allow you to pay down your mortgage faster without penalties. Portability lets you transfer your mortgage to a new property without breaking the terms.

Additionally, some mortgages offer features like skip-a-payment options or access to a home equity line of credit. These features can provide valuable financial flexibility and peace of mind, even if they come with a slightly higher rate.

One of the most important factors is Life and disability insurance.  Most credit protection policies are not portable.  This means that if you wanted to transfer your mortgage to a new lender you may be surprised to find out that your insurance coverage may come to an end.  This is a very important consideration for borrowers who become uninsurable due to illness or disability.

Case Studies/Examples

Consider Sarah, who chose the lowest rate for her mortgage. She later faced hefty penalties when she wanted to refinance to take advantage of lower market rates ($18,000). On the other hand, John opted for a slightly higher rate with better prepayment options, allowing him to pay off his mortgage quicker and save on interest in the long run.

Expert Tips for Choosing the Right Mortgage

Consulting with mortgage professionals, like those at Dominion Lending Centres Mainstream Mortgages, can provide invaluable insights tailored to your financial situation and goals. It’s essential to consider your long-term plans and read the fine print before committing to a mortgage.

Remember, the lowest rate isn’t always the best rate. Look at the overall package, including fees, penalties, and features, to find a mortgage that truly suits your needs.   An ounce of prevention is worth more than a pound of the cure.

In summary, while the lowest mortgage rate may seem appealing, it’s crucial to consider the broader implications. By understanding the hidden costs and valuing flexibility, Canadian borrowers can make more informed decisions and secure a mortgage that best fits their needs.

DLC Mainstream Mortgages Homebuyers Guide

Welcome to DLC Mainstream’s New Home Buyer’s Guide

Embarking on the journey to homeownership is an exciting and significant milestone. At DLC Mainstream Mortgages, we understand that purchasing a home is one of the most important financial decisions you will make. Our New Home Buyer’s Guide is designed to provide you with the essential information and tools you need to navigate the home-buying process with confidence and ease.

Step 1: Assessing Your Financial Readiness

Before you start looking at homes, it’s crucial to assess your financial situation. Here are some key factors to consider:

• Credit Score: Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you’ll receive. Check your credit report for any errors and take steps to improve your score if necessary.
• Budget: Determine how much you can afford to spend on a home. Consider your current income, expenses, and savings. Use our mortgage calculators to estimate your monthly payments and see how different loan amounts and interest rates will impact your budget.
• Savings: In addition to your down payment, you’ll need funds for closing costs, moving expenses, and an emergency fund. Aim to save at least 20% of the home’s purchase price to avoid private mortgage insurance (PMI).

Step 2: Getting Pre-Approved for a Mortgage

A mortgage pre-approval shows sellers that you are a serious buyer and gives you a clear understanding of how much you can borrow. At DLC Mainstream Mortgages, we make the pre-approval process simple and straightforward:

• Gather Documentation: Prepare necessary documents, including proof of income, employment history, bank statements, and identification.
• Submit Your Application: Our experienced mortgage brokers will guide you through the application process, ensuring all required information is accurately provided.
• Receive Your Pre-Approval: Once your application is reviewed, you’ll receive a pre-approval letter stating the loan amount you qualify for. This letter can be a powerful tool when making offers on homes.

Step 3: Finding Your Dream Home

With your pre-approval in hand, you can start searching for your ideal home. Consider the following tips to streamline your search:

• Work with a Realtor: A knowledgeable realtor can help you navigate the local market, identify properties that meet your criteria, and negotiate the best deal on your behalf.
• Prioritize Your Needs and Wants: Make a list of must-have features and desirable extras. Consider factors such as location, size, number of bedrooms and bathrooms, and proximity to schools and amenities.
• Attend Open Houses and Viewings: Take the time to visit multiple properties to get a sense of what’s available within your budget. Don’t hesitate to ask questions and take notes during viewings.

Step 4: Making an Offer

Once you’ve found the perfect home, it’s time to make an offer. Here’s how to proceed:

• Consult with Your Realtor: Your realtor will help you determine a fair offer price based on comparable properties and current market conditions.
• Submit Your Offer: Your offer will include the proposed purchase price, any contingencies (such as a home inspection), and your desired closing date.
• Negotiate: Be prepared for the possibility of counteroffers. Your realtor will assist you in negotiating terms that are favorable to you.

Step 5: Closing the Deal

After your offer is accepted, there are several final steps to complete before you can move into your new home:

• Home Inspection: Schedule a professional inspection to identify any potential issues with the property. This step is crucial for ensuring the home is in good condition.
• Finalize Your Mortgage: Work with your DLC Mainstream mortgage broker to finalize your loan. This will involve a detailed review of your financial situation and the property.
• Closing Day: On closing day, you’ll sign the final paperwork, pay closing costs, and receive the keys to your new home. Congratulations, you’re now a homeowner!

Conclusion

Buying a home is a complex process, but with the right guidance and preparation, it can be a smooth and rewarding experience. At DLC Mainstream Mortgages, we are dedicated to helping you every step of the way. Our team of experienced mortgage brokers is here to provide personalized advice and support, ensuring you find the best mortgage solution for your needs. Contact us today to start your journey to homeownership with confidence.

Understanding the Basics of Mortgages

Navigating the world of mortgages can seem daunting, especially for first-time homebuyers. However, understanding the basics can make the process much smoother and less intimidating. Here, we’ll break down the essential components of a mortgage, helping you make informed decisions as you embark on your homeownership journey.

What is a Mortgage?

A mortgage is a loan specifically used to purchase real estate. When you take out a mortgage, you agree to repay the lender over a set period, typically 15 to 30 years. The property itself serves as collateral, meaning the lender can take ownership of the property if you fail to make payments.

Key Components of a Mortgage

1. Principal: The principal is the amount of money you borrow to purchase your home. For example, if you buy a house for $300,000 and put down $60,000, your principal loan amount will be $240,000.
2. Interest Rate: The interest rate is the cost of borrowing the principal. It is expressed as a percentage and can be either fixed or variable. A fixed-rate mortgage has the same interest rate for the entire term, while a variable-rate mortgage’s interest rate can change over time.
3. Amortization Period: This is the total length of time it will take to pay off your mortgage. Common amortization periods are 15, 20, or 30 years. A shorter amortization period means higher monthly payments but less interest paid over the life of the loan.
4. Down Payment: The down payment is the amount of money you pay upfront when buying a home. It is usually expressed as a percentage of the purchase price. A higher down payment can reduce your loan amount and may lead to better loan terms.
5. Monthly Payments: Your monthly mortgage payment typically includes the principal repayment, interest, property taxes, and homeowners insurance. It’s essential to budget for these payments to ensure you can afford your new home.

Types of Mortgages

1. Fixed-Rate Mortgage: This type of mortgage has a stable interest rate and monthly payments over the life of the loan. It’s ideal for those who plan to stay in their home for a long time and prefer predictable payments.
2. Adjustable-Rate Mortgage (ARM): ARMs have interest rates that can change periodically based on market conditions. They often start with lower rates than fixed-rate mortgages, making them attractive for short-term buyers or those who expect their income to increase.
3. Conventional Mortgage: These are not insured or guaranteed by the federal government and usually require a higher credit score and down payment.
4. Government-Insured Mortgages: These include FHA loans, VA loans, and USDA loans, which are backed by the federal government and often have more flexible qualification requirements.

Choosing the Right Mortgage

Selecting the right mortgage depends on various factors, including your financial situation, how long you plan to stay in the home, and your tolerance for risk. Here are a few tips to help you make the right choice:

• Assess Your Financial Health: Review your credit score, savings, and income. This will help you determine how much you can afford and the type of mortgage you qualify for.
• Compare Mortgage Offers: Shop around and compare offers from different lenders. Pay attention to interest rates, fees, and terms.
• Consider the Future: Think about your long-term plans. If you plan to stay in your home for many years, a fixed-rate mortgage might be best. If you expect to move or refinance in a few years, an ARM could save you money.

Conclusion

Understanding the basics of mortgages can help you feel more confident as you navigate the home-buying process. By familiarizing yourself with the key components and different types of mortgages, you can make informed decisions that align with your financial goals and lifestyle. Remember, it’s always a good idea to consult with a mortgage professional who can provide personalized advice and guidance. Happy home hunting!

Everything has a cost.

I was part of a conversation recently.  I was listening to different points of view.   One person had recently purchased a home and started paying their mortgage, the other stated that interest rates were too high and that they were waiting for either the prices of houses to come down, or for interest rates to come down.   I was sitting there sipping my coffee and listening intently to these two perspectives.  Suddenly,  I heard a deafening silence, as all heads slowly turned in my direction and all eyes were on me.   I think waiting will ultimately prove to be incorrect.   Home values are starting to increase again, interest rates are slowly coming down, the housing supply is dropping and rents are increasing.  Not to mention the amount of money that will be spent on rent that doesn’t build any equity.

I’m not sure who is right and who is wrong in this scenario.   Everyone’s situation is slightly different.  I bowed out gracefully and I asked both parties to watch our socials this week.  This conversation made me ask myself  “What interest rate are you paying on your apartment lease/rent?”

Later on, I pulled out my mortgage calculator and decided to do an interest-only calculation that is compounded monthly.  I googled for the average rents in Winnipeg and assigned a reasonable mortgage amount to the rent being paid and came up with the following chart.

The interest rates ranged from 5.83% – 6.90% and the amount of interest paid after 5 years left me gobsmacked!

If you are currently renting, living with your family, or planning to rent soon, I hope you read this post.  We would be happy

Sometimes I forget how many different services we offer to ensure that we have to help our clients find the right financial solutions.

1. Mortgage Pre-Approval Purchase (Fully Underwritten)
2. Purchase Plus Improvements (Up to $100k)
3. Mortgage Refinance
4. Mortgage Refinance Plus Improvements
5. Mortgage Debt Consolidation
6. Mortgage Renewal
7. Mortgage Switch/Transfer
8. Cashback Mortgages
9. Borrowed or Flex Down Payment
10. Construction Mortgages
11. Mortgages After Divorce or Legal Separation
12. Rental Property Mortgages
13. Rental Property Refinances
14. Rental Property Renewals
15. Rental Property Switches/Transfers
16. Hybrid Mortgages
17. Self Employed Mortgages
18. New To Canada Mortgages
19. 2nd Home Mortgages
20. Vacation Home Mortgages
21. Home Equity Lines Of Credit (HELOCS)
22. Mortgage Life Insurance
23. Mortgage Disability Insurance
24. Credit Repair
25. Auto/Boat/RV Refinancing
26. Commercial Mortgages
27. Commercial Construction Mortgages
28. Alternative Financing
29. Private Mortgages
30. First & Second Mortgages
31. Manitoba Metis Federation Grant
32. Commercial Equipment Leasing
33. Referrals to Financial Planners
34. Referrals to REALTORs
35. Referrals to Life Insurance Advisors
36. Referrals to Real Estate & Family Lawyers
37. Referrals to Home Inspectors
38. Referrals to House Insurance Brokers
39. Reverse Mortgages
40. Bruised Credit
41. Mortgages For New Business Owners
42. Stated Income Mortgages
43. Apartment Building Financing
44. Apartment Building Construction
45. Mortgage Calculators
46. Mortgage Training For New Agents
47. Mortgage Mentorship
48. Mortgages For Strip malls
49. Mortgages For Duplex, Triplex, and Fourplex
50. Interest Only Mortgages
51. Business Financing
52. Farm Credit & Financing

We pride ourselves on being experts in all of the products listed above.  We have dozens of different lenders and programs to choose from.  We can provide you the correct information suited to your own situation and would love to help and answer any questions you may have!

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (a longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Amortization Benchmarks
Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by the majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators. While this is the standard, it is not the only option when it comes to your mortgage amortization. Mortgage amortizations can be as short as 5 years and as long as 35 years!

Benefits of a Shorter Amortization
Opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

Benefits of a Longer Amortization
When it comes to choosing a longer amortization period, there are still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Let’s Chat!
We would be happy to help with the decision for the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You can shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5, or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

More sad news for the Canadian Mortgage space.  The Government of Canada’s FTHBI First Time Home Buyer Incentive is going away!

All applications for the incentive will need to be received by March 21st at 12:00 a.m. EST.   For single-income households, this program usually made the difference between being able to qualify for a house or condo.

If you are planning on using the incentive, you will need to move fast!  After March 21st, your purchasing power could be reduced.

We hope that there will be some good policy and news coming out of Ottawa in the coming months!

Here is the link to the CMHC Website

https://www.cmhc-schl.gc.ca/consumers/home-buying/first-time-home-buyer-incentive?fbclid=IwAR0ajl5LvjQ6ll8rBlsRLq_2s40N3xPAkhaPvWTYlQy0Ap9sinybZoIgKks