Tag Archives: mortgage broker Vancouver Island

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!

Your Credit Score

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I had the pleasure of meeting with a young professional woman this week who was interested in seeing if she would qualify for a mortgage so she could invest in her own home. During our meeting she expressed concern about having her credit checked and the impact on her ability to get a loan. When I pulled her credit report she had a great credit history and excellent credit score of 801. So I thought an article about your credit score and how it is determined would be helpful for my readers.

Credit Score
Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.

There are many different ways to work out credit scores. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay.

Which parts of a credit history are most important?
35% – Your Payment History
30% – Amounts You Owe
15% – Length of Your Credit History
10% – Types of Credit Used
10% – New Credit

Top 5 tips for improving your credit
1. Pay your bills on time. Pay your bill in advance of the due date, ensuring it reaches the creditor before the payment is due. Pay off debt, don’t move it around. Owing the same amounts, but having fewer open accounts, can lower your score if you max out the accounts involved.
2. Contact your creditors as soon as you know you will have a problem paying bills on time. Try to work out a payment arrangement and negotiate with them to keep at least a portion of the late notations off of your credit reports.
3. Reduce the number of active credit cards to 2 or 3 accounts. Revolving credit includes department store cards, grocery store cards and gas cards. Establish a minimum of 2-3 trades with good repayment history for 24 months
4. Keep account balances within 50% of the available credit limit – Keep your credit card balances low. High debt-to-credit-limit ratios drive your scores down.
5. Pay or satisfy all outstanding collections and judgements

It is advisable to avoid applying for credit and having your credit report checked unless you have a genuine need for credit. The risk to consumers with a lot of activity on their credit report over a short period of time is that a lender may interpret this as a sign that you are in financial difficulty or taking on more debt than you can manage.

Your credit score is important and you need to take action to make sure that you will be able to borrow money when you need it. If you currently have a low credit score don’t be discouraged. Take action. Start doing the things that will cause your credit score to improve. Be consistent and before you know it you will have better credit.

When you are ready to pursue home ownership, call me for your mortgage! I pull your credit report once and submit it to the lender. If there are some issues on the report that needs to be addressed, I can guide you through that process.

Enjoy the summer!
Karen Boies, Mortgage Specialist 604-726-9550

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