Are you an adult with an aging parent(s) and are you concerned about your parents’ ability to remain financially independent? Today, Canadian adults have many responsibilities, including the concern for their children’s well-being, as well as their parents’ quality of life and their debt. As life expectancy rises for the senior demographic, there is a growing trend of retirees not saving enough for retirement. Many Canadians overestimate how long their money will last, in part due to their longer-than-expected lifespan.

How can you help your parents maintain their financial independence?

Among the many concerns we have for our aging parents, the biggest concerns include their ability to retain their standard of living. Many senior Canadians prefer to stay in the comfort of their own homes to age-in-place, but we have noticed that their finances are not as stable as we anticipated and they may be struggling with:

• Health/Medical costs & expenses – Your parents’ health care costs are piling up.
• Monthly bills – You notice that your parent(s) are struggling to pay monthly utility and phone bills.
• Renovations and retrofits – Your parents’ home may require repairs. Their home may need retrofits in order for them to maintain their lifestyle, for example, they may need to install a stair lift because of knee problems.
• Revenue Canada debt – Your parent(s) struggle to pay their taxes and now have accumulated debt.
• Property taxes (in arrears) – Your parent(s) have forgotten one too many payments.

If your parent(s) are stressed over their finances, you can help them maintain their independence by introducing them to financing options to help them regain control of their retirement. The CHIP Reverse Mortgage from HomEquity Bank is a great option for older Canadians because it has helped thousands of senior Canadians deal with the most common financial struggles.

How a Reverse Mortgage can help

The CHIP Reverse Mortgage can provide your aging parent(s) with financial independence by unlocking up to 55% of the value of their home (tax-free) without them having to sell or move, in either a lump sum amount or monthly advance.

Contact your Dominion Lending Centres mortgage professional to get your free estimate or to find out more information about how a CHIP Reverse Mortgage can help.

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

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Pre-approvals are certainly beneficial. However, they can also be very disappointing if you are not prepared to know what they actually mean.

They DON’T mean…

They don’t mean that you have a mortgage.Until there is a Purchase Agreement (a written up contract to purchase a property) actually submitted to a bank and a commitment from the bank offered to the client, there is no mortgage. Your bank will often say, “You are pre-approved on a mortgage based on a specific rate that is being offered during this time.” Factors such as the amount of income you bring in, the amount of debt you have and even the property itself will determine whether or not the bank will actually give you a mortgage.

They don’t mean that the rate you are pre-approved for will be the rate you pay. Rate holds are temporary and depending on whether or not you qualify for the rate, you may not get what you initially bargained for.

To get a pre-approval that is solid it is important to know exactly what the terms of the pre-approval mortgage are. Pre-approvals should show exactly what you qualify for in terms of how much money you will be able to borrow for a mortgage based on your financial profile.

A good pre-approval…

A good pre-approval will reflect that you properly income qualify. As mentioned previously, many banks will give you a pre-approval based on a rate guarantee, NOT ON YOUR INCOME. This means that you may be in a lurch because the bank has not pre-approved you properly. A good pre-approval will be based on asking for documents to prove your income. The last thing you want is to be “pre-approved” only to be told after you’ve made an offer on a property that you actually don’t qualify.

A good pre-approval will let you know how much money you will need to provide for a down payment along with closing costs. There are more costs involved in purchasing a property than just the down payment. Costs such as legal costs, title transfer costs, property transfer tax costs (if applicable), appraisal costs (if applicable), etc. are often not talked about when initially going to your bank to ask for a mortgage loan.

A good pre-approval will secure a rate for 90 to 120 days. If rates are trending down, even when you have a negotiated pre-approval rate, you should be able to take advantage of the lower rate. Pre-approvals are excellent when rates are trending up. They secure the lowest rate, even when the bank has raised their rates. But be careful! Every bank has their own guidelines as to guaranteed rates and whether or not they will commit to the lower rate they initially negotiated with you.

A good pre-approval will be aware of lender guidelines concerning properties. Appraisals are not done for a pre-approval. But when contracting for a mortgage, depending on amount of down payment, contract details, etc. you may have to have one. The lender and the insurer ultimately look at the property to see if they deem it marketable and low risk for resale.

A good pre-approval gives the Realtor sure negotiating power. In today’s market there are properties selling so fast that financing has to be secured before going in to make an offer. A good pre-approval ensures that your chances of getting an accepted offer on a popular property are sure. Taking part of a multi-offer negotiation increases your opportunities for success, which can only be the result of a firm pre-approval.

A good pre-approval will prepare you for what you should expect your monthly mortgage spending budget to look like. With your pre-approval in place you know what kind of payments to expect, including the amount of taxes, strata fees (if applicable), etc. you will likely be paying. Your pre-approval explores the costs involved in purchasing a property and carrying a mortgage.

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

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What’s a pension? I don’t have one. In today’s day in age there are not many people that will have one when they retire. So it’s up to us, as individuals, to create our own – build your net worth from within. There are many ways to create a pension plan, acquiring rental properties is just one of them. Many of the wealthy people these days have utilized real estate to grow their empire, whether it’s through buying and selling or buying and never selling. When acquiring a portfolio of properties one is able to plan for continual growth by utilizing the potential cash flow and accrued equity to purchase a second, third, fourth…property.

First step is to determine your budget, which may ultimately be decided by how much of a down payment you have as well as to figure out what your monthly comfort level is for cash flow. For all intents and purposes I will be using values and amounts from my local area on a relatively new 1 bedroom/1 bathroom condo. With newer units comes less risk of future assessments. Do your homework*.

Purchase Price: $225,000
Down Payment: $45,000 (20% minimum, lender may request more)
Mortgage Amount: $180,000
Mortgage Insurance: $0 (lender may require depending on how income is reported)
Total Loan: $180,000

Variable at 2.40% (P-0.30%) 5 year term CLOSED 30 year amortization
Monthly Mtg Payment: $700.79
Est. Monthly Strata: $200
Est. Monthly Property Tax: $100 ($1,200/year)

TOTAL Monthly Payment: $1,000.79

Property Transfer Tax:

$2,500 (paid at completion, cannot be rolled into the mortgaged. It is calculated based on 1% of the 1st $200,000 and 2% on the remaining balance.) To calculate Property Transfer Tax http://www.bcrealestatelawyers.com/ptt-calculator/

Appraisal:

$300 (required to validate the purchase price because there is no mortgage insurer involved; CMHC, Genworth or Canada Guaranty).

Home Inspection:

$400 (highly recommended)

Title Insurance:

$200 (In short, title insurance is an assurance as to the state of title of a given property. In practical terms, it protects lenders and purchasers against loss or damage suffered due to survey problems, defects in title and other matters relating to title as specified in the policy.

Approx lawyer fees:

$1,500

The cost to acquire the property was $4,900.

Well that was easy, you just purchased a rental property…NOPE, you are just getting started. The obvious goal is to pay off the mortgage with the rent ($1,200/month) coming in.

Yearly Cash Flow
= Rent – Mortgage Payment – Property Tax – Heat – Strata – Renters Insurance** – 3% Vacancy
= $14,400 – $8,409.48 – $1,200 – $1,200 – $2,400 – $500 – $432
= $258.52

Positive cash flow is ultimately what you are seeking with a rental property, however this is not always attainable from the start. Just because there is positive cash flow at the beginning DOESN’T mean that you should start paying yourself (a pension), and that amount of $258.52 is yearly. So more or less this property just breaks even.

Because the real estate market is cyclical we are going to estimate the increase in market value by a modest 3%, year over year, some years more than others. Along with calculating the year over year market value increase we will look at how the mortgage balance has decreased over time. Remember the purchase price was $225,000 and the starting mortgage amount was $180,000.

If you would like more information, please contact your local Dominion Lending Centres mortgage professional.

Legend

*Read everything single piece of information provided by the seller and strata; AGMs, strata minutes, property disclosure statement, Form B as well as the depreciation and engineers report if available.

**Renters insurance (purchased by the property owner) has many variables to consider for the cost; detached home, condo, townhouse, location, value of personal contents, any betterment and improvements.

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

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When you purchase a property, you may be a little overwhelmed by all the insurance offers related to purchasing a new property that come your way. Mortgage Insurance, Condo Insurance, Mortgage Default Insurance, Earthquake Insurance; the list goes on and on. It can be confusing and it is important to know what insurance covers what.

For instance, Mortgage Default Insurance is solely for the purpose of the lender and not to be confused as mortgage default insurance for the consumer. Yet, you, the consumer, are responsible for the cost. If you put less than 20% down on a property purchase, you are responsible to pay for Mortgage Default Insurance which covers the lender if you should default on the payment of your mortgage. As well, conditions of the mortgage may require that House/Condo Insurance needs to be purchased in order to fund the mortgage as to protect the consumer and ultimately the lender from severe losses. This kind of insurance may or may not be mandatory.

Alternatively, Mortgage Life Insurance is not mandatory and is purchased to cover the mortgage if the consumer becomes seriously ill or even dies unexpectedly during the term of the mortgage. Usually, this is purchased when the owner of the house has a family or dependents that will inherit the property and would not be able to financially carry the property without the primary owner’s income. The only difference between Term Life Insurance and Mortgage Life Insurance is that the Mortgage Life Insurance is meant to pay off the consumer’s mortgage. But, depending on the policy, the money that is issued on the Mortgage Life Insurance can be designated for the mortgage only. Or, it may be available for other, more necessary expenditures. It all depends on the policy.

Mortgage Life Insurance is certainly a recommendation for those that have not yet saved up enough to be able to secure themselves with savings such as RRSPs or Pensions. Whether the consumer purchases it through a referral from their Mortgage Broker or perhaps has it already through their employment, Mortgage Life Insurance is a wise choice for anyone who wants to set their future up securely.

Top 9 Benefits of using Mortgage Life Insurance

1. Peace of mind – having Mortgage Life Insurance creates a sense of security that your loved ones will be well taken care of if you, as the main breadwinner of the family, pass on.

2. Easy to get – Mortgage Life Insurance is based on the mortgage and your age. There are a list of standard questions to answer but coverage will never be denied.

3. Mortgage paid off in the case of death – having Mortgage Life Insurance ensures an extra level of coverage, whereby any other policies that are held will be able to assist with other needs.

4. Family can stay in their home – if there is the unfortunate life event that is the death of the Mortgage Life Insurance policy holder, the mortgage will be paid off which will allow the family to stay in their home and not become displaced, causing more despair than needed.

5. It protects your family’s finances – Mortgage Life Insurance pays off the mortgage, which means that your family’s finances stay intact.

6. Lost wages – if you become seriously ill, Mortgage Life Insurance can cover your mortgage payments for a specified time period (ie up to 3 years). Unexpected life events such as a serious

car accident can result in missed mortgage payments as a result of loss of wages as you need to recover from injuries.

7. Portability – some Mortgage Life Insurance policies are portable. Which means that if you buy a new property, you will be able to transfer your Mortgage Life Insurance to a new property. Make sure you ask your Insurance Provider if the insurance they are recommending is portable. Take note that when the bank offers you Mortgage Life Insurance you will not likely be able to transfer your Mortgage Life Insurance to a new lender, thereby limiting your future financing options.

8. If you are a young buyer, your Mortgage Life Insurance premiums will be very low. Which means that this insurance is extremely affordable for a young, and likely, first time home buyer.

9. Good health now results in coverage for unexpected illness later on. After illness strikes, it is more difficult to acquire life insurance.

Mortgage Life Insurance is an option that anyone with a mortgage can consider. However, it is important to know what your options are in regard to the Mortgage Life Insurance itself. Asking your Mortgage Broker for a referral to a reputable and credible Insurance Representative is paramount in finding an Insurance Broker that knows available products, that specifically fits your needs. Every individual is unique and needs an insurance product that is fashioned for their individual situation. A good Insurance Representative will be a Broker that knows what insurance products are out there as well as knows what you, the consumer, needs. The great thing about taking on Mortgage Life Insurance is that you can cancel anytime if at a later date you find an insurance product that suits you better.

Remember to take inventory of insurance products you are already signed up with. If your employer provides you with a benefits package, make sure you find out exactly how much coverage you have and if that coverage will adequately provide for your financial needs. If it does, then maybe you don’t need any Mortgage Life Insurance. On the other hand, if your current coverage won’t be enough, then maybe a good Mortgage Life Insurance policy is something to consider.

For more information regarding Mortgage Life Insurance contact any of the 2,500 mortgage professionals at Dominion Lending Centres and we’ll put you in contact with an Insurance Representative that will provide you with viable Mortgage Life Insurance options.

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

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With plenty of activity in the real estate market and more new building slated over the next few years, here is my list of “Things to Consider When Buying in a New Development”.

Representation

Some buyers attend the display suite and consider a purchase directly with the developer sales person or the developers Realtor. Regardless of which kind of property you choose to purchase – new or existing – I always suggest you have a Realtor represent you. I have seen contracts where the buyer has not reviewed the details properly and they are not fully informed before they sign. The developer’s agent or Realtor is acting on behalf of their client – the seller. You should also have your own representation.

Interest Rates

If you are buying a home more than a year or more before completion, you may not know your actual fixed costs for the mortgage until well after you have signed your purchase agreement and paid your deposits. Depending on the lender and timeline, your costs may be unclear for several months. Even if you have a rate hold – things can change along the way with financing rules or the market. I always keep in touch with my clients and within a few months of completion we revisit the overall plan and make some decisions. Your down payment may need to change, the property value may shift or you may have experienced a life changing event (please don’t quit your job). Remember: Keep your mortgage broker in the loop.

Goods and Services Tax (GST)

When you buy a newly built home pay special attention to the contract price. In Canada Goods and Services Tax (GST) of 5% is payable on the purchase of a new home. In many cases the purchase price is set excluding GST so you need to add that tax amount to determine the total purchase price. If the home price is under $450,000 and will be your primary residence, you are eligible to receive a rebate equivalent to 36% of the GST. The rebate will be deducted and the new purchase price will be set Net of GST. There are many online calculators to determine this number and it should also be clear on the purchase agreement. Your mortgage broker will also calculate to confirm. For example a $400,000 purchase price excluding GST will result in an actual purchase price of $416,850. ($20,000 in GST minus the rebate of $3150). A purchase price of $500,000 excluding GST will result in an actual purchase price of $525,000 ($25,000 GST and no rebate).

Allowances and Discounts

In some cases you will have the option to upgrade the home with higher quality items such as flooring or a basement. These items can be included in the purchase price with no additional cost. The agreement will clearly outline the details and no cost will be associated for these items. However, if the contract states there was an allowance as a credit with a cost associated this will be considered a buyer credit and the amount on the contract will be deducted from the purchase price by the financial institution. There will be no financing on these items and the buyer will be responsible for the additional cost. This is common when buyers want to include furnishings such as in a display home. This can be a surprise to buyers as they are not fully clear on the purchase price and what is really included. It is important to review the contract closely with your own buying agent (Realtor) and if any financing questions arise – with your mortgage broker – to ensure you know your options.

Property Taxes

When a developer applies to the local city for a building permit the city will set the municipal taxes for the entire development. Once the developer is near completion and applies to the city for occupancy permits or submits the strata plan (for condo developments) it can still take some time for the city to determine the property tax for each home or condo unit. More and more lenders are using a percentage of the purchase price to determine the property taxes at the time of application unless confirmation of taxes can be provided by the city. In some cases this can be .5%-1.75% of the purchase price which can make a difference to qualify for financing. Your Dominion Lending Centres mortgage broker can review options with you to select the best overall financing solution for your purchase and avoid delays in securing an approval.

Strata fees – start low and grow

Since the strata plan on a new condo development isn’t in place when you make an offer to purchase a new home the strata fees on the purchase agreement will be set low. I recently had a client purchase a condo for $750K and the strata fees were under $170 per month. My clients understood this strata fee will increase to a higher level once the operating budget is set by the strata council and they should set their personal budget accordingly to expect an increase. For more details on the process and to understand the responsibilities of the developer, the strata corporation and the new buyer, click here.

Assignments

When a developer sells their houses or condo units well in advance of completion some original buyers may decide not to complete on the purchase and choose to assign the property to a new buyer. In this case there may be a lower or higher new purchase price. If there is a lower price the GST on the original price will apply. If the price is higher the GST on the original purchase price will apply. The property purchase transfer tax will apply to the new purchase price. The final property purchase transfer tax will be determined depending on the details of the transfer and the value of the property within limits for exemption is typically set by provincial government. For financing purposes, not all lenders will consider an assignment as the new purchase contract is between the original buyer and the new buyer and not with the developer. Some lenders will only consider the original price and the new buyer will have to pay the difference between the two amounts as the down payment to complete the purchase. Lenders who consider the new price will require a full appraisal to confirm the current value of the property. They will also need the original contract in addition to the new purchase contract and want to know details on the relationship between the seller and the buyer. There are many things to consider when you purchase a new home. Always consult your professional advisers, including your Realtor, Mortgage Broker, Financial Planner, Accountant and Lawyer to ensure the purchase helps to meet your lifestyle and financial goals.

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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Did you know you can get a mortgage for renovating your home? Many home buyers and existing home owners are deciding to get more bang for their buck by purchasing a home that needs some improvements. Whether you are renovating at the time you buy or waiting for a few years, there are financing options available.

For home buyers, you may want to consider a “purchase plus improvements” mortgage when renovating your home. Many lenders offer these even if you only have a 5% down payment. The lender will require proof of the work to be completed in renovating your home. They will add this quoted amount to the purchase price, deduct the down payment and determine your mortgage amount. If you are buying with less than a 20% down payment, insurance fees by CMHC or Genworth will be added to the mortgage. The lender and insurer will typically allow a maximum of 10% of the value of the home to a maximum of $40,000-$50,000. If it is going to cost much more for renovating your home a construction draw mortgage would be required.

At the time of completion on your purchase, the lender will fund the mortgage proceeds to the lawyer and condition a hold back for the renovation funds. You will have to use your own funds (or borrowed from family or your line of credit) for renovating your home. The remaining funds will be released by the lawyer upon proof (appraisal) confirming the work quoted has been completed. There is typically a 90 day period for work to be complete but this can be extended if required. Of course, during this time you are making mortgage payments on the full mortgage amount.

Buy a home $500,000

Renovate $ 50,000

Down pay $110,000

Mortgage $440,000

For existing home owners the same financing option for renovating your home is available. The one exception is your maximum mortgage amount for the existing mortgage and new funds for renovating your home can’t exceed 80% of the value of the home.

For a complete guide to renovating your home check out http://www.bcliving.ca/home/complete-guide-to-managing-a-home-renovation

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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When shopping for a mortgage, many home buyers enlist the services of a Mortgage Professional. There are several benefits to using a Mortgage Broker and I have compiled a list of the top 8:

1. Saves you time – Mortgage Brokers have access to multiple lenders (over 50!). They work with lenders you have heard of and lenders you probably haven’t heard of. Because their relationship with lenders is ongoing, Mortgage Brokers know what is available in mortgage financing and will be able to advise you on what your lending options are without all the leg work that you would have to do in order to find a small percentage of information that a Mortgage Broker already has in hand.

2. Saves you money – Mortgage Brokers, if they are successful, have access to discounted rates. Because of the high volume that they do, lenders make available discounted rates that are not available directly through the branch of the lender that you go to.

3. Saves you from becoming stressed out! – It can be very daunting to find a mortgage. A Mortgage Broker takes on that stress for you. Your Mortgage Broker will make sure all the paperwork is in place. They will keep in good communication with you so that you know what is going on with your mortgage and will keep you up to date with any complications so that there are no surprises.

4. Gives you access to lenders that are otherwise not available to you – Some lenders work exclusively with Mortgage Brokers. In these circumstances, the layman does not have access to these lenders and, therefore, does not have the option to use discounted rates and mortgage products that these lenders offer.

5. Services are free – Mortgage Professionals are paid by the lender and not by you. This is not a disadvantage to you. A good Mortgage Broker will ALWAYS have the best interest of the client in mind because if you, as a client, are happy, you will go tell your friends about the service you’ve received from the Mortgage Professional you work with. Mortgage Professionals rely on referrals, which means that if you are a happy customer, and you got the best deal available, you will tell your friends and family about them which will result in referrals and potential future business.

6. Take on every challenge – As Mortgage Professionals, we see every scenario out there and work to make sure that every client knows what is available to them for financing options for a mortgage. Damaged credit and low household income might be a deterrent for the bank, but a Mortgage Professional knows how to approach the lender and has the relationship to make sure every client has a plan and strategy in place to make sure there is a mortgage in their future.

7. The Mortgage Brokerage industry is monitored by governing bodies – Nowadays, as Mortgage Brokers, it is extremely important to have principles and values that are based on the best interest of the client. In fact, in order to become licensed, the Mortgage Professionals need to be well versed in the ethical and upstanding values that are outlined through the Financial Institutes Commission, a provincial governing body that is a watchman for this industry. FICOM’s mandate is to make sure every Mortgage Broker walks in integrity and in the best interest of their client.

8. The Mortgage Broker has a better understanding of what mortgage products are available than your bank – Interestingly, a Mortgage Broker has to be licensed and cannot discuss mortgages with you unless they are licensed. This is unlike the bank who can “internally train” their staff to sell the specific products available from their bank. The staff at your bank do not have to be licensed Mortgage Professionals.

While this is not an exhaustive list on the benefits of using a Mortgage Professional, it is compelling to see the benefits of using a Mortgage Professional rather than putting a mortgage together on your own.

At Dominion Lending Centres, we have an excellent rapport with the lenders we introduce our clients to. Our customer service is reflective of our relationship with our lenders. We are always professional and we always make sure our clients know every viable option they have for mortgage financing.

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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When considering buying your first home, I am sure you will have many questions. I hope to give you some insight to what lenders are most importantly looking for when qualifying for a mortgage.

1. What’s the best rate I can get?

The rate that you receive depends on a number of things. I get a lot of clients that are what I like to call “rate sensitive” this means that they are fixated on the lowest rate and don’t understand why they may not be able to get the advertised rate.

A number of those rock bottom rates you see advertised have conditions to them. For instance they may be only for a 30 day quick close, or they may not be portable.

Some factors that determine rate are employment (self employed, full time, part time, etc.) credit score, down payment, income and more.

Until a full application’s been received and credit has been checked you cannot be guaranteed a rate.

2. What’s the maximum mortgage amount for which I can qualify?

This of course is going to be based on your income and liability circumstances. There are two calculations brokers use to qualify a borrower. The first is your Gross Debt Service (GDS) ratio. GDS looks at your proposed new housing costs (mortgage payments, taxes, heating costs and strata/condo fees). Generally this amount should be no more than 32% of your gross monthly income. For example, if your gross monthly income is $4,000, you should not be spending more than $1,280 in monthly housing expenses. Lenders and brokers calculate your Total Debt Service (TDS) ratio. The TDS ratio measures your total debt obligations (including housing costs, loans, car payments and credit card bills). Your TDS ratio should be no more than 41-44% of your gross monthly income (this is dependent on credit score as well).

Keep in mind that these numbers are prescribed maximums and that you should strive for lower ratios for a more flexible lifestyle.

3. How much money do I need for a down payment?

The minimum down payment required is 5% of the purchase price for houses under $500,000. For homes over $500,000 10% down payment is required on the amount over $500,000. If you want to avoid CMHC mortgage insurance than 20% down payment or greater is needed.

4. What happens if I don’t have the full down payment amount?

There are programs available that enable you to use other forms of down payment. Your RRSPs can be used without being taxed if you pay back within 15 years, gifted funds from parents are also accepted. Some lenders will also allow a flex down program to be used. This is where based on qualification you can use a line of credit towards your down payment.

5. What will a lender look at when qualifying me for a mortgage?

These are the most important factors a lender will look at when qualifying for a mortgage such as employment history, income, debt, credit history and the value/kind of property.

Most importantly, the lender is looking to make sure you can afford the home you’re wanting to purchase. Second most important thing they consider is the value in the home. The lender wants to make sure that if you default on payments that they have security in the home.

Overall lenders are looking for stability. They want to see this with employment, debt re-payment, and credit history. It’s important for you to have good credit, and minimal liabilities. Make sure you’re never late never late on any loan or credit card payments. This shows you are responsible and less of a risk for the lender.

6. Should I go with a fixed or variable rate?

This ultimately depends on your risk tolerance. If you’re a first time home buyer you may feel a lot safer going fixed as you know what you’re expected to pay for the term of the mortgage.

However, variable rates can save you a lot of money, I mean thousands.

If you want to choose a variable rate and qualify for one (as it’s a bit tougher) just know and understand that you run the slight risk of it possibly rising while in your term if the prime rate moves up, but you can never predict this. There are much smaller penalties with a variable rate than a 5 year fixed.

Your Dominion Lending Centres mortgage professional can discuss all the differences and benefits for you.

7. What credit score do I need to qualify?

A credit score of 680 and up is a good credit score that can offer you the discounted rates. There are lenders that lend on lower credit scores but usually at a bit higher rate.

8. What happens if my credit score isn’t great?

If your credit isn’t the greatest there are ways to increase your score. Most credit reporting companies report every month. So luckily you can change your score within a few months time if you do the right things. The most important thing is to pay down your credit cards so the balance is no more than 30% of the limit.

Even better…pay off your credit card balance in full, if you can have a $0 balance owing that’s the best!

Don’t go taking out any large loans before a mortgage approval. It’s best to wait till you’ve actually got the property in your hands. You don’t want to do anything that could jeopardize your approval or have a lender pull an approval from you as they re-checked your credit prior to closing and now see an expensive car loan.

Make sure everything is up to date. No overdue collections still showing or an old bill showing up on there when you paid it ages ago, but never got removed for some reason.

9. How much are closing costs?

Closing costs on average are 1.5% of the total purchase price. This is a guideline to go by, but not exact. Closing costs will cover things like, inspections, lawyer fees, property transfer tax, appraisals, and title insurance.

10. How much will my mortgage payments be?

This is going to depend on many different things. The size of your down payment, the interest rate, the purchase price, amortization chose, whether or not you’re paying mortgage insurance (CMHC) and also the frequency of payments ( bi-weekly accelerated, or monthly).

If you have any other questions, please feel free to contact any of the Dominion Lending Centres mortgage professionals from all across Canada!

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

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Statistics Canada in conjunction with Canada Mortgage and Housing Corporation (CMHC) released their first report this morning from the Canadian Housing Statistics Program (CHSP), providing data regarding the non-resident ownership of Canadian housing. This program was mandated by the last federal budget, filling in a significant data gap in housing statistics. For years, many have speculated that foreigners were the major culprits driving housing prices into nosebleed regions in Vancouver and Toronto. Today’s release shows that non-residents own less than five percent of housing in both cities.
Immigration remains a significant driver of housing activity in Canada. Canada has the most robust population growth in the G7, three-quarters of which is attributable to immigration and foreigners moving to Canada will be of growing importance in the future. But the report showed that non-residents – defined as both foreigners and Canadians whose principal residences are outside of Canada, irrespective of citizenship – are not the primary cause of the housing affordability problem in Canada’s two largest cities.
Many have blamed foreigners– mainly the Chinese–for the sky-high prices that have surged in the past three years–pricing many Millennials out of the housing market. A voter backlash spurred provincial governments to introduce a 15% tax on non-resident buyers in Vancouver (August 2016) and Toronto (April 2017), though earlier available data showed that foreign purchases were only between 5 and 10 percent of all home sales. In both regions, the tax slowed housing activity mainly by changing psychology. New listings surged, and buyers became more cautious as their options improved with more supply and lower prices. Other measures to slow housing activity by government and financial institution regulators have led many to assert that “boomers have priced millennials out of the housing market.”

Data revealed that non-residents (individuals whose principal dwelling is outside of Canada) owned 3.4% of all residential properties in the Toronto census metropolitan area (CMA), while the value of these homes accounted for 3.0% of the total residential property value in that metro area. In the Vancouver CMA, non-residents owned 4.8% of residential properties, accounting for 5.1% of total residential property value.
Estimates of non-resident ownership varied by property type. In both metropolitan areas, non-resident ownership was more prevalent for condominium-apartments. Non-residents owned 7.2% of condominium-apartments in the Toronto CMA and 7.9% of these units in the Vancouver CMA. By comparison, non-residents held 2.1% of single-detached houses in the Toronto CMA and 3.2% of single-detached homes in the Vancouver.
Over the past decade, home prices have accelerated markedly in Canada’s largest urban areas, particularly in Vancouver and Toronto. Data from the Canadian Real Estate Association Home Price Index show prices increased 173.7% in Vancouver from January 2005 to November 2017, while they rose 145.0% in Toronto over the same period. The last three years have been particularly telling, with house prices in Vancouver increasing by more than 60% and in Toronto by more than 40%, triggering great concern about housing affordability.
Below are two infographics produced by Statistics Canada giving more regional detail on non-resident ownership in Vancouver and Toronto. Breaking down the metro regions by municipalities, across the Vancouver CMA, non-resident ownership was most concentrated in the City of Vancouver (7.6%), followed by Richmond (7.5%) and West Vancouver (6.2%). In the Toronto CMA, the shares of non-resident owned properties were most substantial in the municipalities of Toronto (4.9%), followed by Richmond Hill (3.6%) and Markham (3.3%).

Largest Share of Non-Resident Ownership Is High-Price Condos
The most significant share of non-resident ownership in both CMAs was for condominiums, at 7.9% in the Vancouver and 7.2% in the Toronto. (See table below).
In Vancouver, almost two-thirds of non-resident owned properties were condominiums, while in Toronto, this share was close to half. Although the majority of condos were apartments, some were also single-detached houses, semi-detached houses and row houses.
Across the Vancouver CMA, 50.1% of condominium-apartments owned by non-residents were in the City of Vancouver, while 14.9% were in Richmond. In the Toronto CMA, non-resident owned condominium-apartments were primarily located in the City of Toronto (82.8%) and Mississauga (8.6%).
In the Vancouver CMA, the average value of a condominium-apartment owned by non-residents was 30.4% higher than that of a resident held condo-apartment. The City of Vancouver had the highest rate of non-resident ownership of condo-apartments within the CMA. The average value of these apartments was approximately $930,600, which was 25.6% higher than resident-owned.
The relative disparity between non-resident condo prices and resident condo prices in Toronto was much smaller than in Vancouver. In the Toronto CMA, non-resident owned condominium-apartments were on average 8.7% more expensive than resident owned. The City of Toronto had the highest concentration of non-resident owned condo-apartments in the CMA, which were on average valued at $439,000, or 7.6% more expensive than resident-owned.

Same is true for Non-Resident Owned Single-Family Homes–More Expensive Than Resident-Owned
For the Vancouver CMA, the average value of a single-detached house owned by non-residents was approximately $2.3 million compared with $1.6 million for resident held. These differences were most pronounced in the Greater Vancouver A subdivision, the City of Vancouver and West Vancouver. In Greater Vancouver A, single-detached houses owned by non-residents had an average value of nearly $8 million, while those owned by residents had an average value of $5.3 million. The average size of a single-detached house held by non-residents in this district was close to 4,800 square feet, 32.2% larger than the average size of single-detached dwellings owned by residents.
In the Toronto CMA, single-detached houses owned by non-residents were on average 12.3% or $103,500 more expensive than homes owned by residents. Differences in average values for single-detached dwellings were most marked in the municipalities of Markham, Richmond Hill and Toronto. In Markham, the average value of single-detached houses owned by non-residents was close to $1.1 million compared with $997,500 for resident owners. In Richmond Hill, non-resident held single-detached homes were, on average, valued at $1.2 million compared with $1.1 million for resident owned houses. In the City of Toronto, a non-resident owned single-detached house was, on average, valued at just over $1 million compared with $965,800 for a resident owned home. These differences, once again, are much smaller in the GTA than in the GVA.

Bottom Line: Non-residents represent a significantly more important factor in the Vancouver region than in the Toronto CMA, as expected. Moreover, non-residents purchase markedly more expensive properties compared to residents in Vancouver than in Toronto.
Wealthy Chinese nationals are a more significant factor in Vancouver than in Toronto, which has been the case for many years–not surprising given the geography. Moreover, many Chinese nationals began buying properties in the Vancouver CMA well in advance of the July 1997 handover of Hong Kong from the United Kingdom to China. Chinese have continued to find the Vancouver region an attractive haven for capital despite the imposition of capital controls in China.
Many are non-residents and have not rented their properties. In consequence, there are relatively more vacant properties in Vancouver than in Toronto. The Vancouver city council approved a tax on empty homes, the first of its kind in Canada, in early 2017, with the first payments due in 2018. Self-reporting owners will be assessed a one percent tax on homes that are not principal residences or aren’t rented for at least six months of the year. Though a similar tax has been discussed by the Toronto city council, to date, it has not had legs.

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

#trinamortgages #mortgages #ndlc #freedomofchoice

#bestmortgageforme #executive #firstimehomebuyer

If you found this information valuable, I only ask that you share with your friends and family.

Copyright DLC

DR. SHERRY COOPER

Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.