Mortgage Services

PRE-APPROVAL

The Pre-Approval process is a great way for purchasers to get started with their quest of buying a home. This process ensures that the applicants are able to begin searching for the home that best suits their financial capabilities. With our pre-approvals, we provide a four month rate hold, and purchasers can be at ease with the buying process in order to make sure they purchase the home that best suits their needs. This process also provides First-Time Buyers a great opportunity to become more educated by asking all their questions well ahead of time so that there are no surprises.

We encourage you to read the information below in advance, in order to be better prepared with questions during the application process.

During our painless Pre-Approval process, we request that our applicants provide us with an application, so that we may quickly furnish them with a firm Pre-Approval, and all that remains at this point is the finality of an Agreement of Purchase.

FIRST TIME HOME BUYERS

First-Time Buyers represent the largest group of purchasers in today’s real estate market. Recognizing this, Lenders and Insurers have developed progressive ways to allow for many Canadians to purchase their first home, which would otherwise not have been possible under traditional programs. The most common program utilized today by First-Time Buyers is the 95% high-ratio financing program through both the Canadian Mortgage and Housing Corporation (CMHC), and Genworth Financial (formerly GE Mortgage Insurance).

There are other programs available for First-Time Buyers in order to assist them with the purchase of their first home. Applicants are often enticed by some lenders with 0% down by offering cash back programs for the down payment or for the purchase of appliances etc. Just be aware that these mortgages are offered at posted rates, (significantly higher than discounted rates), and the cash back is pro-rated in the case that you re-finance your mortgage. There are also programs available through Genworth Financial and secondary mortgage lenders through a self-insured program, that allow for 100% financing with higher premiums for the greater risk they take on these types of transactions.. These can vary significantly and applicants should consult with a mortgage professional for details on how these programs work. CMHC also permits first-time buyers to borrow their 5% from any other source under certain conditions. For further assistance in understanding these programs and how they work, please feel free to contact me at (416) 721-2450.

The Home Buyer's Plan is yet another way that First-Time Buyers can purchase a home much more easily. This plan enables each purchaser to utilize their RRSP by withdrawing up to $20,000 from their plan, as long as the plan has existed for at least 90 days. The RRSP account remains open, and must be replenished within a 15 year period. Should you utilize the full $20,000 for your down payment, the annual payment to replenish your RRSP would be as little as $1,333.33. If you decide not to deposit these annual payments to your RRSP, the $1,333.33 would be added to your annual income and you would only be taxed on this annual payment based on your tax bracket. Restrictions do apply, so please make sure you get full details from me, I would be happy to assist you.

IMPORTANT NOTE: Don't forget to ask us about how you may qualify for FREE land transfer tax as a First-Time Home Buyer.

REPEAT BUYERS

Repeat Buyers should take the time to ensure that they are getting the best possible deal, regardless of the fact that they have a mortgage with an existing lender. Lenders typically use this as a bargaining chip against the client, and see this as an opportunity to early renew the mortgage with penalties at times, and or a higher rate. This ultimately costs the client thousands of dollars more, than if the client were to payout their existing mortgage, and take advantage of significantly lower/discounted rates. To avoid this, a Repeat Buyer should take the time to understand the calculations so that they can make an educated assessment. In the case that the current rate of the Repeat Buyer on their existing home is comparable to current rates, the above would not necessarily apply and it may be beneficial for the client to remain with their existing lender.

Something else that the Repeat Buyer should also take into consideration before making a decision on their new purchase and mortgage is whether or not the product they currently have with their existing lender is right for them. There are many variations of products in the market place today, which can assist you in paying off your mortgage quicker. Please feel free to contact me for more details at (416) 721-2450.

REFINANCES

Although many home owners hesitate when considering the possibility of taking on more debt against their home in the form of a mortgage, ultimately it may make sense for them to do so for several different reasons. With the high rate of unsecured debt growing at approximately 30% per annum in Canada, and disposable income growing at approximately 3% per annum, consumers on average are spending money much faster than they are making it. For this reason, many look to the increased equity in their homes in order to increase their cash flow by consolidating their outstanding debt load. This debt consolidation approach actually saves the consumer money, especially with the mortgage rates being at an all time low. The consumer also saves money by consolidating, simply because there is a difference between the mortgage rates and the unsecured rates, by a significant margin.

Other reasons that home owners may re-finance their homes are, home improvements or renovations. With the high cost of homes these days, many people are choosing to make changes to their existing homes by renovating their basement, improving and updating their kitchen space, and their bathrooms. There are those who do an equity take-out for investment purposes, or to purchase another home or recreational property. With the higher cost of second mortgages, consumers with equity for the most part will choose to combine their existing first and second mortgages to improve their cash flow situation.

Whatever your reason is to consider re-financing, with the low cost of mortgage rates today and the flexibility the market has allowed with increased equity in your home, it may make sense to consider the option. Please feel free to contact me for some free advice at (416) 721-2450.