It’s the time of year when many homeowners are getting their property assessments.

The real estate market is the single biggest influence on market values. Market forces vary from year to year and from property to property. The market value on an assessment notice may differ from that shown on a bank mortgage appraisal or a real estate appraisal because an assessment’s appraisal reflects the value at a different time of the year, while a private appraisal can be done at any time.

Use your Assessment as a starting point for the value of the property your planning your home purchase… Do not rely on a provincial assessment for the exact value of the property you’re considering purchasing. Markets can change quickly both increasing and decreasing in value depending on the area.

What is a Home Appraisal?
An appraisal is a document that gives an estimate of a property’s current fair market value.

Often there is no connection between a provincial assessment and appraised value. This is why lenders want an appraisal – an independent evaluation of the properties value at this moment in time.

Primarily home appraisals are completed at the request of a lender. Lenders want to know the value of a property in the current market before they are willing to lend against the home.

The appraisal is performed by an “appraiser” who is typically an educated, licensed, and heavily regulated third party offering an unbiased valuation of the property in question, trained to render expert opinions concerning property values.

When an appraisal is done, consideration is given to the property, the home, its location, amenities, as well as its physical condition.

Appraisals may also be required when an owner has less than 20% down payment and needs mortgage default insurance.

Who pays for the Home Appraisal?
Typically, the borrower pays the cost of the appraisal, and upon completion, the appraisal goes directly to the lender (does not go into the home buyer’s hands).

I know it sounds odd, but brokerages, lenders and appraisers cannot just show the buyer the appraisal on a property, even though the borrower paid for it.

Think of an appraisal as an administrative fee for finding today’s current value of the property
You need a Home Appraisal since the lender doesn’t want to lend on a poor investment and the appraisal helps the buyer decide if the property is worth what they offered (especially in hot markets like Vancouver & Toronto).

Why don’t you get a copy of the appraisal? The appraiser considers their client to be the lender (the reason the appraisal was ordered). The lender has guidelines for the appraisal, and the appraiser prepares his report according to those parameters.

The lender is free to share the appraisal with the borrower, but the appraiser cannot share it. This is because the lender is the client… NOT the borrower!! It doesn’t matter who pays for the appraisal.

Sometimes an appraisal can come in lower than the purchase price, causing angry calls to the Appraisal Institute of Canada (AIC), and the answer they give is: the Brokerage or Lender is the client of the appraiser, and as such has ownership of the report.

One of the main reasons the buyer pays for the appraisal, is that if the mortgage doesn’t go through, the lender does not want to be on the hook for paying for the appraisal and not getting the business.

Lenders are also aware that home buyers could take the appraisal and shop it around with other Lenders to try and get a better deal.

It is rare for Lenders to share the report. With most appraisal companies, the appraisal is only provided after the closing of the mortgage transaction and must have the lender’s approval.

After the funding of your mortgage, some mortgage brokers will refund the appraisal fee or sometimes the lender may agree to reimburse the cost of the appraisal.

While a lender does not have to release the entire appraisal, there are some pieces of information that remain the personal property of the buyer, and PIPEDA legislation guarantees them access to that. However, any information on the report that does not relate to the property itself (such as the neighboring properties or other data about the community) would come off the report before the lender provided it.

Some other reasons for getting an Appraisal:

• to establish a reasonable price when selling real estate
• to establish the replacement cost (insurance purposes).
• to contest high property taxes.
• to settle a divorce.
• to settle an estate.
• to use as a negotiation tool (in real estate transactions).
• because a government agency requires it.
• lawsuit

Getting your home ready for an Appraisal:
The appraiser report involves a report including pictures of the home and property with the appraiser’s value of the property, along with a short summary of how that information was derived.

9 tips for high value home appraisals

Most lenders have an approved appraiser list which requires appraisers to have the appropriate designation. Lenders tend to reject appraisals that are ordered directly by property owners. Lenders want the appraisal to be ordered by the broker or the lender, primarily to avoid potential interference from the property owner.

Home Appraisal Costs
Appraisal costs do vary. Most home appraisals start around $350 (plus tax) but they can go much higher depending on how expensive the home is, complexity of the appraisal and how easily the appraiser can access comparable data.

Are you thinking of buying a home? As you can tell there is lots to discuss, call your Dominion Lending Centres mortgage professional to have a chat!

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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Not surprisingly, borrowers often default to their own Banker. And why not? It’s an established and comfortable relationship. Perhaps it’s viewed as the path of least resistance. But is it the right lender for the borrower’s current specific needs? Perhaps not.

More sophisticated borrowers may be of a size or scale that they have their own internal resources in finance, quite capable of securing the required financing. They are likely only in the market infrequently however, and almost certainly not fully knowledgeable as to all of the financing sources available.

Aren’t all Lenders pretty much the same?
Borrower’s may think that all institutional lenders are pretty much the same. Offering comparable rates, and standardized borrowing terms. This is rarely the case. Lender’s often prefer one asset class over another. They may have a particular need for one type of loan. A specific length of loan term may be desirable, for funds matching purposes. Real Estate risk is a fact for real estate lenders. How they mitigate this risk differs however. It may be stress testing interest rates during the approval process. Sophisticated risk pricing models may be used, having regard to previous loss experiences. The lender may rely significantly on collateral value, or guarantees. The conditions precedent to funding will often differ from lender to lender.

A real world example
I had the pleasure last year in advising a client who had 3 sizable real estate assets, in 3 quite distinct asset classes. The borrower’s loan amount requirements were significant, however they were flexible on loan structure. Accordingly, I sought out competitive, but differing deal structures. My goal was to provide a competitive array of options. A number of “A” class lenders were approached, several/most of whom this particular borrower had no previous experience with. I shortened the list to 5 lenders, and received Term Sheets from each.

Each Offer was competitive on a stand alone basis, but they differed quite substantially, in the following ways:

• Loans were either stand alone, or blanket loans, or some combination.
• Length of terms offered, differed by asset class.
• There was as much as a 75 bps rate difference, from highest to lowest Offer.
• The amortization period depending upon asset class, ranged from 15 to 25 years.
• Loan amounts on individual assets differed as much as 20%.
• Third party reporting requirements differed between lenders.
• There were a combination of fixed vs. floating rate loan structures.
• Recourse was limited by some lenders, on select assets, or waived entirely, upon a higher rate structure.

Leverage Your Knowledge
These variances are striking, yet each of the 5 lenders were considering the precise same asset, at the same time, with common supporting information from which to base their analysis. How was the borrower to know which Offer to exercise? As a Broker, I can add value by helping the borrower to consider both their immediate and longer term strategic requirements, in the context of their overall real estate portfolio needs. This was precisely how this borrower landed on the most appropriate Offer for their particular circumstances. In this particular case we presented different, yet competitive, and uniquely structured options for the borrower’s consideration.

Consider me your Dominion Lending Centres Mortgage Broker when next in the market for financing. Leveraging a Broker’s knowledge is a tremendous value proposition.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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At some point in their lives, most Canadians have probably asked themselves whether it is better to buy or rent a home. Purchasing a home is one of the biggest decisions most people ever make so the impacts of the decision can be HUGE.

Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether home ownership is right for you.

Some advantages of buying a home

Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.

Each month when you make your mortgage payment, you are building equity in your home.

Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.

At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.

Most mortgages also offer you the option of making additional monthly or annual payments to reduce your principal faster. Some prepayment privileges, for instance, enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. A home can appreciate – or increase in value – as time passes, building more equity. As you build up equity, it’s usually easier to upgrade to a more expensive home in the future thanks to the profit you’ll make when selling your current home.

As an owner, you can also decorate and improve your home any way you like. Ownership tends to give you a sense of pride and can offer you and your family stronger ties to the community.

If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home can be a great place to start building equity that one day may allow you to buy the home of your dreams.

Since we’re currently in a buyer’s real estate market and interest rates have been dropping, now may be an ideal time to enter into home ownership for the first time.

Some disadvantages of buying a home

Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership has some additional responsibilities as well.

For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.

Owning a home ties up some of your cash flow and is likely to reduce your flexibility to move to a new location or change jobs.

While your home might increase in value as time goes by, don’t expect to get a big return quickly. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate fees, moving, renovation and other selling costs.

Real estate is, however, usually considered a good investment over the long term.

When making the decision about whether to buy or rent, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities.

If you’re thinking of buying your first home, Dominion Lending Centres mortgage professionals can answer all of your mortgage-related questions.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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Every year Canadian families are caught in unexpected bad circumstances only to find out that in most cases the banks and the credit unions are there to lend you money in the good times, not so much during the bad times.

This is where thousands of families have benefited over the years from the services of a skilled mortgage broker that has access, as I do, to dozens of different lending solutions including trust companies and private lending corporations. These short-term solutions can help a family bridge the gap through business challenges, employment challenges, health challenges, etc.

The key to taking on these sorts of mortgages is always in having a clear exit strategy, which in some cases may be as simple as a sale deferred to the spring market. Most times, the exit strategy involves cleaning up credit challenges, getting consistent income back in place and moving the mortgage debt back to a mainstream lender. Or as we would say in the business an ‘A-lender’.

The challenge for our clients over the last few years has been the constant tinkering with lending.

Guidelines by the federal government and the changes of Jan. 1, 2018 represent far more than just ‘tinkering’.

This next set of changes are significant, and will effectively move the goal posts well out of reach for many clients currently in ‘B’ or private mortgages. Clients who have made strides in improving their credit or increasing their income will find that the new standards taking effect will put that A-lender mortgage just a little bit out of reach as of the New Year.

There is concern that the new rules will create far more problems than they solve, especially when it seems quite clear to all involved that there are no current problems with mortgage repayment to be solved.

Yet these changes are coming our way fast.

Are you expecting to make a move to the A-Side in 2018?

It just might be worth your time to pick up the phone and give your Dominion Lending Centres Mortgage Specialist a call today.

I’m here and I’m ready to help.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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Did you know that 60 per cent of people break their mortgage before their mortgage term matures?

Most homeowners are blissfully unaware that when you break your mortgage with your lender, you will incur penalties and those penalties can be painfully expensive.

Many homeowners are so focused on the rate that they are ignorant about the terms of their mortgage.

Is it sensible to save $15/month on a lower interest rate only to find out that, two years down the road you need to break your mortgage and that “safe” 5-year fixed rate could cost you over $20,000 in penalties?

There are a variety of different mortgage choices available. Knowing my 9 reasons for a possible break in your mortgage might help you avoid them (and those troublesome penalties)!

9 reasons why people break their mortgages:

1. Sale and purchase of a home
• If you are considering moving within the next 5 years you need to consider a portable mortgage.
• Not all of mortgages are portable. Some lenders avoid portable mortgages by giving a slightly lower interest rate.
• Please note: when you port a mortgage, you will need to requalify to ensure you can afford the “ported” mortgage based on your current income and any the current mortgage rules.

2. To take equity out
• In the last 3 years many home owners (especially in Vancouver & Toronto) have seen a huge increase in their home values. Some home owners will want to take out the available equity from their homes for investment purposes, such as buying a rental property.

3. To pay off debt
• Life happens, and you may have accumulated some debt. By rolling your debts into your mortgage, you can pay off the debts over a long period of time at a much lower interest rate than credit cards. Now that you are no longer paying the high interest rates on credit cards, it gives you the opportunity to get your finances in order.

4. Cohabitation & marriage & children
• You and your partner decide it’s time to live together… you both have a home and can’t afford to keep both homes, or you both have a no rental clause. The reality is that you have one home too many and may need to sell one of the homes.
• You’re bursting at the seams in your 1-bedroom condo with baby #2 on the way.

5. Relationship/marriage break up
• 43% of Canadian marriages are now expected to end in divorce. When a couple separates, typically the equity in the home will be split between both parties.
• If one partner wants to buy out the other partner, they will need to refinance the home

6. Health challenges & life circumstances
• Major life events such as illness, unemployment, death of a partner (or someone on title), etc. may require the home to be refinanced or even sold.

7. Remove a person from Title
• 20% of parents help their children purchase a home. Once the kids are financially secure and can qualify on their own, many parents want to be removed from Title.
o Some lenders allow parents to be removed from Title with an administration fee & legal fees.
o Other lenders say that changing the people on Title equates to breaking your mortgage – yup… there will be penalties.

8. To save money, with a lower interest rate
• Mortgage interest rates may be lower now than when you originally got your mortgage.
• Work with your mortgage broker to crunch the numbers to see if it’s worthwhile to break your mortgage for the lower interest rate.

9. Pay the mortgage off before the maturity date
• YIPEE – you’ve won the lottery, got an inheritance, scored the world’s best job or some other windfall of cash!! Some people will have the funds to pay off their mortgage early.
• With a good mortgage, you should be able to pay off your mortgage in 5 years, there by avoiding penalties.

Some of these 9 reasons are avoidable, others are not…

Mortgages are complicated… Therefore, you need a mortgage expert!

Give a Dominion Lending Centres mortgage specialist a call and let’s discuss the best mortgage for you, not your bank!

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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#bestmortgageforme #executive #firstimehomebuyer

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Many Canadians think of retirement as a time filled with vacations, getaways to the cottage and spending more time on hobbies and interests. However, there are many other factors to consider when thinking about retirement savings. More and more Canadians are forgetting about some key obstacles that may change their perspective on what they actually need to save in order to retire comfortably.

Life Expectancy

Canadians are underestimating their life expectancy. Along with many societal advancements, health care technology has been one of the most improved areas in recent years. As a result, people are more aware of their health conditions, taking better care of themselves and thus, seniors are living longer.

According to Statistics Canada, Canadian males have an average life expectancy of 79 and females an average of 83. In 2000, the average life expectancy for males was 77 and females 82. On average, there is an increase of about 2-3 years on the average life expectancy of Canadian male and female every decade.

Knowing this, seniors now have to save more for their retirement than their predecessors. 4 in 10 Canadians age 55+ say there is a serious risk that they will outlive their retirement savings. While an additional 40% will still be in debt after the age of 65, according to The Vanier Institute for the Family.

The Rise of Long Term Care Cost

According to benefitscanada.com, Baby Boomers currently account for 33% of the population and 14% of Canadians are over the age of 65. Based on today’s demographics and trends, by the year 2036, 25% of the population will be over the age of 65. And according to Statistics Canada, in 2036, one in ten Canadians will require long-term care by the age of 55, three in ten Canadians by the age of 65 and five in ten by the age of 75.

Seniors requiring long-term care will incline in the next couple decades, and with that, the cost of long-term care will also be on a steady climb. Based on inflation for health care services reported by Statistics Canada, the inflation rate of long-term care costs per year since 2010 is an average of 3% per annum.

Young Adults living in the Parental Home

Is your 20-29 year old still living at home? According to the 2011 Census Report, 42.3% of over 4 million young adults between the ages of 20-29 either never left the parental home or they returned home after living elsewhere. More and more young adults are still living with their parents as a source of emotional or financial support. Some of the reasons include cultural preferences, cost of housing, aspirations for higher education or the struggles of unemployment.

These and many other factors can help you determine how much you need to save in order to live a comfortable retirement life. It is also important to understand your options when it comes to financial security. Seniors who are at least 55 years of age, and who own a home, are eligible for a reverse mortgage.

With a reverse mortgage, you can access up to 55% of the value of your home, while maintaining the ownership, never having to move or sell. There are no payments required and you can receive your tax-free cash in monthly installments, in a lump sum or a combination of both. The best part is, the loan from the reverse mortgage does not have to be repaid until the borrower passes away or moves/sells their home. You can now live comfortably knowing that this is an option for you.

Contact me at Dominion Lending Centres to find out what you can access from your most secure investment, your home!

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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Are the good times really over for good?
Recently, for the first time since 2012 we have seen the 5-year bond market climb back up over 2.0%. Based on amazing employment numbers and the likelihood that the Bank of Canada will raise rates on January 17, the bond market has continued a climb out of the basement and maybe running full steam uphill in response to a better economy.
Let’s look at the last 10-years of bonds and how they correlated to the 5-yr. fixed mortgage rate because it is still the choice of most Canadians as it is a stable place to build your home budgets around. In 2007 the 5-year bond was at 4.13% and the 5-year benchmark rate 6.65%. Follow the melt down that started to happen in 2008 the bond slowly but surely began to sink and by 2012 the 5-yr. bond was at 1.25% and the bench mark 5 yr. rate was at 5.29%. But wait we weren’t done; in 2015 the bond sunk all the way to .65% but the bench mark rate was still at 4.74%, if you took that rate at the branch you really paid too much as we were almost at 2.25% for standard feature 5 year fixed at that time.
So now turn the corner and we see that the bond is on its way back up. We come into 2018 with it having climbed all the way back to 2% almost an 8-year high and of course Governor Poloz has already had the bench mark at 4.99 so I don’t think it will be long before we see the bench mark reset again. Will it be long before the new qualifying numbers are 6% again, still some factors to watch, NAFTA, employment, world markets, price of tea in China, price of oil in Alberta.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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Ask any mortgage broker and they can tell you that there are a handful of misconceptions that the public has about working with a mortgage broker. From questioning their credentials (we all are regulated and licensed with in our own province, and are constantly re-educating ourselves) to assuming that the broker does not have access to the same rate as the banks (we do in fact—plus access to even more lending options) mortgage brokers have heard it all!

With the recent changes to the B-20 guidelines taking full effect as of January 1, 2018 the mortgage landscape is changing and we firmly believe in keeping our clients educated and informed. With these changes, there have been a number of misconceptions that have come to light regarding mortgage professionals and their “limitations” and we felt it was time to address them:

Myth 1: Independent Broker’s don’t have access to the rates the banks do.

Fact: Not true. Brokers have access to MORE rates and lenders than the bank. The bank brokers only have access to their rates-no other ones. A mortgage professional has access to:

• Tier 1 banks in Canada
• Credit Unions
• Monoline Lenders
• Alternative Lenders
• Private Lenders

This extensive network of lender options allows brokers to ensure that you are not only getting the sharpest rate, but that the mortgage product is also aligned with the client’s needs.

Myth 2: The consumer has to negotiate a rate with a lender directly.

Fact: Not true at all! Your mortgage professional will shop the market to find the best overall cost of borrowing for the client. Broker’s will look at all angles of the product to ensure that the client is getting one that will suit their unique and specific needs. Not once will the client be expected to shop their mortgage around or to speak to the lender. This is different from the bank where you are limited to only their rates and are left to negotiate with the bank’s broker—who is paid by the bank! We don’t know about you, but we would much rather have a broker negotiate on our behalf. Plus, they are FREE to use (see myth #6)

Myth 3: A Broker’s goal is to move the mortgage on each renewal.

Fact: A Mortgage Broker’s goal is to present multiple options to consumers so they can secure the optimal product for their specific and unique needs. This entails the broker looking at more than just the rate. A broker will look at:
• Prepayment options
• Costs of borrowing
• Portability
• Penalty to break
• Mortgage charges

And more. If the Broker determines that the current lender is the most ideal for their client at the time of renewal, then they will advise them to remain with that lender. The end goal of renewal is simple: provide clients the best ongoing, current advice at the time of origination and at the time of renewal

Myth 4: The broker receives a trailer fee if the client remains with the same lender at renewal.

Fact: This is on a case-to-case basis. At times, there is a small fee given to the broker if a client opts to renew with their current lender. This allows for accountability between the lender, broker, and customer in most cases. However, this is not always the case and the details of each renewal will vary.

Myth 5: If a Broker moves a mortgage to a new lender upon time of renewal then the full mortgage commission is received by the broker, allowing the broker to obtain “passive income” by constantly switching clients over.

Fact: Let’s clarify: If a client chooses to move their mortgage at renewal after a broker presents them with the best options, then it is in fact a new deal. By being a new deal, this means that the broker has all the work associated with any new file at that time. It is the equivalent of a brand-new mortgage and the broker will have to do the correct steps and work associated with it.

A second point of clarification-although the broker will earn income on this switch, the income (in most cases) is paid by the financial institution receiving the mortgage, NOT the client.

Myth 6: It costs a client more to renew with a mortgage broker.

Fact: Completely false. Clients SAVE MONEY when they work with a mortgage broker at . A broker has access to a variety of lenders and can offer discounts that the bank can’t. Additionally, most mortgage brokers offer continuous advice and information to their clients. Working with a broker is not a “one and done” deal as it is a broker’s goal to keep their clients informed, educated, and well-versed as to what is happening in the industry and how it will affect them. When you work with a broker instead of the bank, you not only get the best mortgage for you, but you also have access to a wealth of industry knowledge continuously.

Mortgage Brokers are a dedicated group of individuals who work directly for the client, not the lenders or the bank. Brokers are problem-solvers, advisors and honourable individuals. We work hard to give our clients the best that we can in an industry that constantly is evolving and changing.

We encourage you to reach out to your local Dominion Lending Centres mortgage professional if you have any misconceptions or questions about working with a broker-we are happy to answer them and help you with your mortgage, your renewal, and everything and anything in between.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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#bestmortgageforme #executive #firstimehomebuyer

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1. How the penalties are calculated if I break my mortgage early? Specifically, ask what rate they use to calculate the “interest rate differential”. Typically, if the lender has “posted rates” they use these to calculate the penalty. If this is the case, the penalty can be 3, 4 or even 5 times higher than a mortgage lender that does not have posted rates and uses them in their early payout penalty calculation. This one question can save you thousands of dollars!

2. Is this a “collateral” mortgage? Some lenders have recently started putting all of their mortgages into what is called a “collateral” charge. In the right situation, given significant equity in the home, this product can be very useful and advantageous. The disadvantage to this product however, is that you cannot “switch” it to another lender at maturity. You have to actually discharge this type of mortgage and re-register a new one with a new lender which will cost on average $1000 for legal fees and appraisal costs. Beware of lenders who do this, especially if your mortgage is high ratio because it is only useful if you have more than 20% equity.

3. Can I “blend and extend” my mortgage if I buy another house? Most variable rate mortgages cannot be “blended” however, typically the penalty to break a variable is 3 months interest. Some lenders have changed their policies (very quietly) – instead of allowing you to add new money to a mortgage in the event of a new purchase, they require you to pay the full penalty. Some clients have been caught off guard by sneaky lenders who don’t tell them this until only a few days before close, at which time it’s too late to switch lenders.

4. What happens to my life insurance if I switch lenders at the end of my term? This is a very commonly overlooked detail by those who take the insurance offered by their bank or lender. The challenge is that if you want to “switch” your mortgage to another lender at the end of your term, you have to re-apply for insurance. The downside to this is that you’ll be five years older, and if you have developed any health issues, you may not qualify for the insurance at all. Getting insurance that mortgage brokers offer stays in place for the whole time you have your mortgage, no matter who your mortgage lender is.

5. What happens at the end of the term (typically five years)? Will they offer you the best rate they offer their new clients, or will you have to negotiate for best rates at that time. Most banks know that clients likely won’t make the effort to negotiate the best rates. Working with an independent specialist will provide you with the most competitive rates, not only when you buy your home, but when it comes up for renewal. A qualified professional will make sure you have the best options available each time your mortgage comes due.

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

#trinamortgages #mortgages #ndlc #freedomofchoice

#bestmortgageforme #executive #firstimehomebuyer

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I am often asked by clients about the real value of title insurance, why they need to have and pay for it.  Whether you are a home buyer or a home owner simply refinancing the mortgage on your home, you will need title insurance.  Once I explain the reason and need for title insurance, the majority of home owners accept the cost and see the real value of title insurance.

Title insurance includes a lender portion policy and the homeowner has the option to add a Homeowner Policy portion.

Lenders request the insurance to protect against title fraud and the high costs associated with this growing crime. However, there are more benefits to this insurance for the homeowner.

1. The policy transfers risks related to title of the property from the home buyer to title insurance provider. So if any delays or issues occur on title during the purchase, the insurance provider will resolve it and the associated costs.

2. The Homeowner Policy also covers losses associated with survey issues and title defects that existed prior to the home purchase as well as title fraud occurring after the policy is issued. Coverage continues after the purchase for as long as the owners own the home. Title insurance covers losses resulting from many risks not directly related to title, such as: structures or renovations previously completed without required permits, unknown work orders, encroachments, liens, zoning and by-law violations.

3. The policy protects the homeowner against any future title fraud on the property. For properties that are clear title with no mortgage, there is a risk that a criminal can assign a mortgage against that property without the owner’s knowledge. They take the money and run leaving the homeowner with a mortgage and payments.

Who is at risk?

The easiest target is the homeowner with no existing mortgage. However, even a property owner with a mortgage can become a victim. In both cases, mortgage funds are usually sent to a third party and are often unrecoverable. For this reason, lenders want homeowners to acquire title insurance to transfer the cost to fight the case and cover the costs to the title insurance provider.

What can the homeowner expect if they are a victim of title fraud?

The immediate issue for homeowners in a real estate title fraud situation is the homeowner is responsible to prove the crime occurred. During that time they could be responsible for a mortgage and the payments. If unpaid, this can result in foreclosure by the lender and a record of the late payments on the owner’s credit report.

If you become a victim in a real estate title fraud, it can take considerable time and money such as:

* Costs for legal fees to show proof you are the victim
* Lost opportunities to sell or buy another property
* Mental distress
* Possibility of losing your home to foreclosure by the lender
Title insurance covers the legal expenses and many other costs related to restoring title in cases of real estate title fraud.

For homeowners who did not obtain title insurance when they bought their home, the protection title insurance can be purchased any time.

If you are buying a home, your Dominion Lending Centres mortgage professional and your lawyer will discuss title insurance with you. If you are a current homeowner who wishes to obtain title insurance, contact your lawyer or a title insurance company. I have provided some links below for your reference. Fees range depending on the value of the property.

The first link below outlines costs.
http://www.bcrealestatelawyers.com/real-estate-fraud-and-title-insurance/
www.fct.ca

Have a great day!

Contact me for your best mortgage options 705.669.7798 or trina@ndlc.ca

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