Tag Archives: best mortgage rates BC

What Happens Next …… Now that you have found the home you want to buy?

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Congratulatons! It is an exciting and sometimes turbulent time when you make that offer to purchase and then wait for the final approval for your mortgage loan.

I prepared a video that I send to my clients when I get the good news that they have found the new home they want for themselves and their family. I walk you through the process from when I submit your application to the lender for approval, until you are the owner of your new home.

In the video I refer to a document that I’ve called, What Happens Next. I want to share this document with you, please send me an email Karen@mortgagecentrebc.com or Facebook http://www.facebook.com/MortgageForDivorce.KarenBoies I will forward the document to you.

If after watching the video you have any questions, please call me 604-726-9550 or send me your questions via email or Twitter @KarenBoies.

Thank you for viewing the video and leaving your comments.

Applying for a mortgage loan – what do I need to know?

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When I speak to prospective clients they ask me what information will they need to prepare, in order to complete their mortgage loan application. I have prepared this blog article as I thought it would help you prepare for our meeting.

The mortgage loan application requests information about the type of mortgage loan you are applying for, as well as your personal financial situation.
To fill out the Mortgage Application , you (and the co-borrower, if you have one) need to provide the following information:

Employment history – I require 3 years history of where you work, (have worked) including address, your job title and income

Income – how are you paid?
• Hourly
• Salary
• Do you earn overtime or bonuses
• 100% commission
• Self employed
• Permanent pension income

Where do you live now – I need 3 years history of where you live (have lived). Do you rent? Or Own?
Do you own your current property? I need the details of the residence plus the information on the current mortgage holder.

Debts – What are your current debts / liabilities. Your own debts plus any you might have co-signed
• Credit cards
• Bank loan, car loan or lease.
• Alimony or child support obligations
• Any bankruptcy history
• Any legal actions you are involved in
• Foreclosure history

Citizenship status – there are a variety of lending programs depending on if you are New to Canada, permanent resident, non-permanent resident, U.S. non-permanent resident

Assets
• Current value of RRSP’s
• Stocks & bonds, mutual funds
• Tax free savings
• Savings
• Value of the automobiles you own
• Value of other major assets (big boat)
• Value of other properties you own

Down Payment – What is the source of your down payment and closing costs. How much will you put down?
• Will you provide it from your own savings?
• RRSP’s
• Receiving a Gift from your immediate family member?
• Borrow it from your line of credit?

Paperwork – What is the minimum you should have available when we meet?
For our initial meeting it is ideal if you have your last two years of income tax returns and/or notice of assessment and a current paystub. I want to accurately establish what is your gross income, as this will avoid stress and frustration when you have found the home you want to buy.

The reality is that in order to do my best for you as your mortgage planner, to ensure you get approved and I get you the best available mortgage terms, conditions and rates, I need to KNOW YOU. Once I know you, your needs, goals, financial background, I am in a better position to help you reach your goal of owning and investing in your home. I will advice you of your options and the best mortgage rates, terms and conditions available to you.

If you don’t quite qualify today, I will use the information you shared to create a plan of action so you can meet your goal in the near future.

You can get started now, by accessing our secure Mortgage Application
If you have questions about planning for your mortgage or you are ready to get the process started, call me 604-726-9550. I look forward to helping you achieve that goal!

Guarantor or not?

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I recently had the opportunity to work with a client who really wanted to take the step to buy her own condo instead of paying off her landlord’s mortgage. She had completed the application process, then after checking her credit rating I found out she had previously declared bankruptcy.  

That prior bankruptcy adversely affects her ability to get a mortgage on her own today. She has a good explanation for the bankruptcy. She suffered a life threatening illness and did not have a job where she was paid disability benefits.  While she recovered from the illness, she did not have an income and could not pay her debts. At the time she was younger and did not understand the ongoing impact declaring bankruptcy would have on her ability to obtain mortgage financing.   Today, she is healthy and has an established good paying career/job and pays her credit card off each month and on time.

Because of her prior bankruptcy the mortgage lender requested a guarantor. Luckily her parents were more than happy to help out and they were great candidates to be guarantors.

I thought a quick blog on the role of guarantor would be helpful.

A guarantor is a person who promises the lender they will repay a debt if the principal borrower should default on the mortgage repayment commitment (fails to pay).  A guarantor will be requested by the lender, if the principal mortgage applicant is unable to qualify for financing on their own. Examples of when this could happen are insufficient employment history or a history of poor debt repayment.

The guarantor does become part of the mortgage application and approval process. They will have to disclose their assets, liabilities, income and a credit check is done.  Then the lender looks as the complete picture of the applicant and their guarantor.

Once the application is approved, the guarantor will have to sign the mortgage documents including the mortgage commitment, confirming their obligation to the lender that they will be responsible to pay this mortgage, should their daughter fail to do so.   

The guarantor should obtain “independent legal advice” from a lawyer who is not part of the real estate transaction so they know what their responsibilities are should the primary debtor default on the mortgage repayment.  The lender (creditor) has no rights against the guarantor until the primary debtor defaults on the mortgage payments. Should the primary applicant miss one payment, the lender could enforce the guarantee and take action to have them pay the mortgage payments.

My client has sufficient income to support the mortgage on her own. Once she demonstrates at least 12 months of paying the mortgage payments on time and keeps her credit history in excellent condition, the lender will review the file and consider removing the guarantor.

I am happy to be the one to help you through the home buying and mortgage planning process.  When you or someone you care about, is buying a home, call me 604-726-9550! I want to help and make this a positive experience for all my clients.

If you have any mortgage related questions, please call me or email me at Karen@mortgagecentrebc.com

Karen Boies Mortgage Planner

Radio Real Estate Show June 3 2010

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Hi, I had the pleasure of appearing on Radio Real Estate Show, AM650 Saturday morning from 10-11:00am, this is what I had to say……

Good Morning Tom, Good Morning Sheri,

The Minister of Finance recently announced changes to high-ratio government guaranteed mortgages. I am talking about a mortgage where you are putting less than 20% down and the rate used to qualify you for a VRM.

This week I worked with a client who has been impacted by these changes.  She had full intentions of securing a variable rate product for her first ever mortgage. She had done her research and was confident in her financial decision.  The only problem she went out and committed to a new car lease before buying the home.

Prior to April 19, the lender would have used their 3 year rate to qualify her and she would have qualified for the variable rate product.  With the higher qualifying rate, today it is 5.99%, she no longer qualifies for a variable rate mortgage.  She has been approved for a  5 year fixed rate  mortgage of 4.39% which is a great rate, that’s  2.49% higher than the VR.

If you are thinking about buying a home, do not go out and buy or lease a car! It could cost you more than you had planned!   Call me first,  let’s develop your mortgage plan !

This is Karen Boies for Radio Real Estate

I am a mobile mortgage planner in Greater Vancouver. I am honored to work with you to help you understand the home financing process! I want to help you make financial decisions that you are comfortable with and that save you money in the long run. If you have any mortgage related questions, please call me at 604-726-9550 or email me at Karen@mortgagecentrebc.com

09.mortgage centre-karen boies jun 5

What happens to my deposit? When do we get the keys?

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Last night I met with a wonderful young couple who are in the process of buying their first home. I am arranging their mortgage financing for them.

The wife is already seeing herself living in their new home, enjoying the convenience of in suite laundry, hardwood floors for her baby to crawl on and additional living space. Her husband is still thinking about the contract details, asking me many great questions about the next steps in the home buying process.

They have an accepted offer and we are going through the process of getting all the documents in order to meet the lenders conditions for financing approval.  They have already prepared the 5% deposit cheque to be given to their Realtor “In Trust” when the subjects are removed.  He wanted to know if he gets that money back? If not where does it go and when do they pay the rest of the down payment? When do they get the keys to their new home?

I explained that once the lender is satisfied  they have the employment income to support the mortgage loan, the proof they have the down payment from their own savings and approval is provided by CMHC for the default loan insurance, I will give them a letter to confirm they can remove the “subjects” for financing. At that point if they are satisfied with the other conditions they identified (home inspection) they will sign a contract addendum to remove the subjects.  Once they remove the subjects they are bound by the contract and they will be buying that home.  They will provide the deposit of 5% of the purchase price, to their Realtor. This will be deducted from the total down payment they agreed to provide. (Purchase price less down payment equals mortgage amount)

Approximately one week before the sale is to complete they will meet with their solicitor.  They will pay the balance of the down payment (subtracting 5% deposit they already paid) and the remaining closing costs, such as property tax adjustment and the legal fees. Once this part of the transaction is completed, the lender (in this case a Credit Union) will forward the money they have borrowed (the mortgage amount) to their solicitor, who will in turn pay for the property they have purchased on the “closing/completion date.”  The following day they will meet with their Realtor to receive the keys to their new home.

My client’s questions last night reminded me to break down the steps.  Now that they have found their home and they are going through this in real time,  it is important to break the steps down for the home buyer so this is  a positive experience, as stress free as possible (considering they are making their biggest financial purchase of their young lives)!

We talked about this process when we first met two months ago.  I left them with a Home Buyers Information Kit and an information sheet on the Costs of a Residential Purchase.   We communicated via email and on the phone several times before they found the home they wanted to buy. 

This was a great reminder for me about knowing my client, understanding their need to know.   

 I am happy to be the one to help you through the home buying and mortgage planning process.  When you or someone you care about, is buying a home, call me 604-726-9550! I want to help and make this a positive experience for all my clients.

Enjoy your spring days and nights.

Karen Boies   Mortgage Planner

Boies.k@mortgagecentre.com

Flexible Down Payment Options

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Many renters feel they cannot afford to purchase a home because they have not saved for a down payment.  There are solutions available today that can help first time buyers with their down payment.

The minimum down payment is 5%. Many lenders allow for a gifted or borrowed down payment.  Some lenders offer a cash back option that can be used for your down payment.  

Gifted down payments are provided by an immediate family member. The family member must sign a letter showing the amount of the gift and that no repayment is expected.

If you have excellent credit and very little debt, but have access to a line of credit or a personal loan, you may be able to borrow the down payment. The loan will have to be accounted for in the debt servicing ratios.  You will need to have 1.5% of the purchase price saved to show you can cover the closing costs.

Some financial institutions offer a “free down payment” or “flex down” program. This covers your down payment. You do pay a slightly higher interest rate. But this program will allow you to invest in home ownership and start accumulating equity earlier. You must remain with the original lender for the full initial five year term or you will have to pay back the down payment.

There is also the RRSP Home Buyers Plan option.  If you are a first time home buyer you can withdraw up to $25,000.00 from your RRSP tax free to purchase a home.  This is for owner occupied property purchases only. You must repay the RRSP within 15 years, commencing no later than the second year in which the withdrawal was made.

There are many options available to those wanting to buy their own home.  It is important to speak to me, a mortgage professional. I will provide you with the education and support to help you make an informed decision.

I look forward to working with you soon.  Enjoy your spring day, Karen

Mortgage rates on the rise

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March 31 2010, I had the great privilege of being invited to speak on the Radio Real Estate Show on AM650, at 10:00am, Radio Real Estate
This is what I had to say:

Good Morning Tom, Good Morning Edith,
Mortgage rates rose this week due to the strong economic conditions in Canada. The biggest one day increase since 1996. One big banks’ best 5 year fixed rate went from 3.64% to 4.39%.

The bond markets, that affect long term mortgage rates, priced in an anticipated Bank of Canada rate increase. The financial markets are anticipating that the BOC will increase their funding rate in May, this is earlier than the commitment from the finance minster to wait until July 2010.

If you are planning on buying a home or renewing your existing mortgage and you are interested in a fixed rate mortgage, we recommend securing a 120 rate hold now, as their will be continued pressure on rates to increase. We still have 3.79% for a 5 years fixed rate available.

If you have a variable rate mortgage and you are thinking about locking in, call me today to discuss the options available to you.

This is Karen Boies for Radio Real Estate

37.Mortgage Centre-Karen Boies Apr 3

Renewing your mortgage-Why don’t you exercise the same due diligence at renewal time as you did when you shopped for the initial mortgage?

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Do you know when your current mortgage is up for renewal? Do you know what happens if you do not take active steps to renew your mortgage?  Many Canadians do not.  Unfortunately many Canadian homeowners fall into the auto-renewal trap and therefore do not take advantage of the savings inherent in securing a better mortgage rate and product.

In 2009 ING DIRECT commissioned an Angus Reid poll and found that 40 percent of Canadian mortgage holders waited only 30 days or less in advance of a home closing (or renewing an existing mortgage), in securing a rate hold guarantee.  A rate hold guarantee is available as early as 90 to 120 days before your mortgage comes up for renewal.

The survey noted that those with existing mortgages are the ones who could benefit most from a rate hold. The survey found that of the 64% of Canadians whose mortgages have come up for renewal 27 percent indicated they let their mortgage automatically renew. 

Banks typically offer anything from posted rates, up to 1 percent off of the posted rate, at mortgage renewal time.  Not negotiating a better rate than what is offered or looking at alternative lenders for a best available mortgage rate and terms, means Canadians could be missing out on savings and therefore money in their pocketbook!

So how much extra are you paying on your mortgage by simply auto-renewing? …..between $7388 and $3173.00!!

Example:   Using $300,000.00 mortgage with a five year fixed term, amortized over 25 years, making monthly payments, the balance on your mortgage in 5 years is:

  • Current bank posted rate for 5 year term 5.39% the balance in 5 years is $26721.67
  • Negotiating 1% off of the posted rate 4.39% the balance in 5 years is $262907.22
  • Our best 5 year rate 3.69% the balance in 5 years is  $259733.35

Posted rate vs. our best rate, you are paying $7388.32 more than you should have

1% off of posted vs. our best rate, you are paying $3173.87 more than you should have

 What do you need to do to put that savings in your pocket when your mortgage comes up for renewal?

Don’t wait until the mortgage renewal letter arrives in the mail box. Pay attention to your mortgage term and when it is coming up for renewal.

  • You should have received your annual mortgage statement in the mail in the past month. Look at it, when does your mortgage come up for renewal? You can usually check your renewal date online.   Make a note in your electronic calendar right now – 120 days out from the renewal date, along with my contact information.  
  • Remember you are in control of your mortgage at renewal time, not your lender. It is your opportunity to make changes to your mortgage that will save you money over the long term.
  • Work with a Mortgage Planner – We work for you to negotiate a mortgage rate and product that fits your goals and budget.  What are your future plans? Are you staying in your current home for the next 5 years? Will your financial situation change?  We will recommend a mortgage term, product and amortization is the best option for you.
  • Some lenders offer a “no-fee” refinance or  they will reimburse you some of the minimal costs associated with switching your mortgage.  By working with a mortgage planner we can switch your mortgage taking advantage of these no-fee options

 Bottom line you when it comes to renewing your mortgage, it is important to exercise due diligence.  Know what your options are! Do not simply go with the auto-renewal because you are too busy or not sure what your options are.

One hour of your time with a mortgage planner is money in YOUR pocketbook and long term savings on your mortgage.  

Now go find your renewal date and mark it in your Outlook calendar .. :)

Pay yourself first

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The unsung hero of wealth creation: Pay  yourself  first.

 One of the most powerful strategies for building wealth is to pay yourself first. What this means is taking your pay cheque and setting aside money for your future BEFORE you pay any bills. Of course, this can be difficult if you’re living from pay cheque to pay cheque. But the reality is, if you want to build financial security, you have to start investing for tomorrow—even if it means taking a part-time job, starting a home business, reducing expenses or clipping coupons.

 Here are some helpful tips:

  • Start small. Start with an amount you’ll hardly notice, like 5-10% of your income, then work toward 20%.
  • Make a budget. Only by knowing where your money goes can you see where savings can be made.
  • Automate your saving. Transfer it automatically from your chequing account into a separate account. Or buy a Canada Savings Bond and make monthly payments.
  • Lock it into a RRSP. Take away temptation by putting the money into an account that charges a penalty for early withdrawals.
  • Increase your mortgage payments. By dedicating it to your mortgage, you’ll enjoy huge savings over the long run.
  • Invest in a revenue property. Once you’ve saved enough for a down payment, buy an investment property and use the rental income – and if need be, a portion of your “pay yourself first” funds –  to cover your mortgage payments. After a few years, you’ll have the financial security you’ve always dreamed of!

 Make a commitment today to you and your financial future, start paying yourself first!

Use your RRSP for your down payment

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Radio Real Estate Interview February 6 2010

On the weekend I had the great privilege of being invited to speak on the Radio Real Estate Show on AM 650.

This is what I said …. “ There are a number of financial incentives for First Time Home Buyers.  As this is RRSP season, I am going to talk about using your RRSP contributions towards buying your first home.

First-time homebuyers who are Canadian residents can withdraw up to $25,000.00 from their RRSP tax free.  Through Canada’s home buyers plan you and your spouse can each withdraw up to $25,000 to build or buy a qualifying home.

You can still make an RRSP contribution TODAY!  You will get the income tax deduction for 2009  and then use that RRSP contribution 90 days later towards your down payment on the purchase of your first  home.

Make sure you are not locking in your RRSP savings into a fixed term investment, such as a 5 year GIC. You need know you can have access the funds when you do buy.

RRSPs are great way to save for your first home purchase and a great way to get yourself into the real estate market”

If you have questions about planning for your first mortgage, call me. I look forward to helping you achieve that goal this year!