23 Mar

Do I Have To Change My Banking?

General

Posted by: Kristin Stauffer

Many times the mortgage lender that best suits a clients needs is operating under a name that the average Canadian has not heard of.

 

The next logical question from clients is then, “Do I have to open up a new bank account with them as well?”.

 

The answer is no. The lender your new mortgage is with will more than likely offer only mortgage financing products and no other banking services. Gone are the days when you had to pick a bank and have all of your finances with that one institution. Online banking, email money transfers and pre-authorized debits make it simple to transfer money from bank to bank so that you can choose all of the products that are the best choices for you no matter which lender they are with.

 

If the lender your new mortgage is with does not offer banking services it is known as a Monoline Lender. There is no branch to visit and any changes or questions you have in regards to your mortgage can all be directed back to your mortgage broker who will service your mortgage for you as long as you are with that lender.

 

Your mortgage payments will be automatically withdrawn from any chequing account you currently have set up on the day of your choosing, with no extra work required from you!

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com

9 Mar

What a 30 Year Amortization Can Do For You

General

Posted by: Kristin Stauffer

The maximum amortization for a traditional residential purchase in Canada that has less than 20% of a down payment is currently at 30 years.

 

Who wants to have a mortgage for 30 more years?! For most owner-occupied homeowners the answer is “I don’t, thank you very much!”. Well, there are some reasons to take an amortization slightly higher than what you qualify for.

 

The first reason is to get used to your new payments and your new house. More often than not your payments will now be higher than where you were living before. This is especially true for first-time home buyers who were used to renting. You now have a lot of extra expenses to pay and that can be overwhelming, particularly in the first year. Then there’s the added costs of your new home. Did the furnace break in the first month? Do you need to buy
a lawnmower for your new backyard? Taking a 30 year amortization to lower your payments for that first year is often the best idea to free up your cash flow.

 

The second is something that is very relevant today in our unsteady and slowly recovering economy, which is job loss. Let’s say you’ve taken advantage of some prepayment privileges for your mortgage. You filed your tax return and received a refund, so you put it all towards your mortgage to pay down the principal. Or you increased your payments by $50 bi-weekly because you had some extra cash flow. Now you’re sitting at a much lower amortization than what you started at, maybe closer to 20 years. If you lose your job and need to decrease your payments you can do so with a majority of lenders back up to the original amortization or very close to it.

 

One thing to keep in mind is that taking a 30 year amortization typically does not mean you’ll have your mortgage for life – even though it may feel that way at first. With all of your options available to you to make lump sum prepayments or increase your payments to lower your amortization, we can get you mortgage free faster.

 

An annual review is key as well to ensure you’re on the right track – if your current mortgage provider does not do this maybe it’s time to find somebody who will take that time for you.

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com

29 Feb

Down Payment – Gift from Family

General

Posted by: Kristin Stauffer

One way to come up with the minimum down payment of 5% required for your new purchase is with a gift from family members. Most lenders allow this and it’s a great way to get into the housing market.

 

Often the family members are required to be an immediate family member. This is usually defined as being one of the following:

 

  •   Parent
  •   Grandparents
  •   Siblings
  •   Child
  •   Legal Guardian

 

The list is very lenient however, as not all families are alike. The family member can be biological, adoptive, stepfamily, in-laws or they could not be related at all but be considered family based on your relationship with them.

 

For this to be proven to the lender all that is required is a signed gift letter and proof of the funds being deposited into your bank account. Often the gift letter is provided by the lender and simply needs to be filled out and signed, and the funds are to be in your bank account a minimum of 10 days prior to your closing date.

 

So if you have family that have indicated they would like to gift you money for you to buy your home, get a pre-approval based on the amount you now have for a down payment, find a realtor and it’s time to go on a house hunt!

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com

27 Feb

Cash Back Mortgages

General

Posted by: Kristin Stauffer

Are you ready to buy your first home but don’t have the minimum 5% down payment that is required? Maybe you decided to use any extra cash you had to pay down some debt or haven’t had time to save enough – in that case this type of mortgage may be right for you.

 

The typical term offered for a cash back mortgage is for 5 years, with the cash given by the lender ranging from around 3% – 5.5%. The interest rate is higher than a standard 5 year fixed mortgage as this is how the lender recoups the cost for lending you those extra funds on your closing date. Although the lender is giving you the funds towards your down payment you will still need to come up with the closing costs associated with your purchase from your own funds as these cannot be borrowed from other sources.

 

If you already have enough funds for the down payment you could also use the cash back from the lender for other purposes such as buying some new furniture or paying a penalty on an old mortgage you are paying out. Each lender has their own guidelines over what you can use the cash back for, always make sure you know the rules to avoid any problems when finalizing your mortgage.

 

One thing to keep in mind is that if you decide to pay back your mortgage early before the term is up, not only will you need to pay the mortgage penalty but you will be required to pay back all or a percentage of the cash that the lender gave to you on your closing day.

 

A full financial review with a mortgage agent is always a good idea to see if this program is a good fit for you and your current scenario, and it may just be the ticket to get you into the housing market sooner than you thought!

 

Got a mortgage question? I have your answer!

http://angrybirdsgamer.com
http://angrybirdsgamer.com

22 Feb

Is your mortgage up for renewal soon?

General

Posted by: Kristin Stauffer

A question I hear often is in regards to mortgage renewals – how long before my maturity date should I be shopping for a new mortgage?

 

First – I can do the shopping for you! I encourage clients to look around and see what is available, especially from their current lender, just to get a feel of what kind of mortgage rates and products are being offered at that time.

 

The best rates can be held 120 days prior to your maturity date. Since we want to ensure the rate is locked in as soon as we are able to, it’s best to have the application completed and ready to go prior to this date. Then, once we hit that 120 day mark, we can secure that great rate and keep shopping for the next 3 months to see if rates drop. Remember to keep in mind that the lowest rate is not necessarily the best product to suit your needs, I’ll keep your needs and wants at top priority to get the perfect mortgage for you.

 

Many lenders offer what are called ‘Quick Close’ specials, where if the mortgage is funding in 30-45 days the rate is much lower than other published offers. An approval can always be obtained from a different lender and we can move as many times as required, as long as you’re locked in you can relax and leave the work to me!

 

Got a mortgage question? I have your answer!

 

Kristin

http://angrybirdsgamer.com
http://angrybirdsgamer.com

22 Feb

Condition of Financing? It’s up to you…

General

Posted by: Kristin Stauffer

“But I qualify for so much more, I know I’m going to be approved, why do I need that condition of financing?”

 

My answer to that? You don’t. However, if you don’t have it and financing is not approved, can  you still purchase the house? If your answer to that is no, you may want to think long and hard before not putting in that clause.

 

Even if you as a new and potential client look fantastic to the lender, there is no way to know what they will think of the property until an approval is obtained. What if the property value isn’t there, can you come up with more down payment? A past collection suddenly appears on your credit bureau, can that be fixed before the closing date?

 

A discussion with both your Mortgage Agent and Real Estate Agent is an important piece to this puzzle, only they can present you with the scenarios relating to your specific situation to help you make a decision.

 

Got a mortgage question? I have your answer!

 

Kristin

http://angrybirdsgamer.com
http://angrybirdsgamer.com

22 Feb

Ask that mortgage question – that’s what I’m here for

General

Posted by: Kristin Stauffer

There are a few reasons why I’ve decided to start blogging, at first it was to get the basics down on paper (screen?), but then I realized that there is so much information to share that I couldn’t stop! Plus I’m now addicted to trying to master html code, so bare with me if I try some flashy code that ends up failing…

 

But the biggest reason is to answer questions. All questions. ANY question. With many client meetings at least one time I get “This is probably a really stupid question but…”, and you know what? It’s never a stupid question. Ever! Most of the time it’s something that I was leading into from the current subject, and the only way to truly become the master of your mortgage is to ask all of those questions to get the answers.

 

So the next time you think to yourself “I’d really like to ask Kristin but I don’t want her to think I’m stupid”, just ask. I promise you I’ve heard that question before or a variation of it. If you think of something you’d like covered in a blog let me know as well – a quick email, text, voice mail, whatever is easiest for you – and I’ll get that answered for you and everybody else who was wondering the same thing.

 

Got a mortgage question? I have your answer!

 

Kristin

http://angrybirdsgamer.com
http://angrybirdsgamer.com

22 Feb

How is my credit score calculated?

General

Posted by: Kristin Stauffer

In Canada if you have outstanding personal credit or open and available credit, this is reported to both Equifax and Transunion. These two companies then use the information received to determine what is called your ‘Beacon’ score.

 

Beacon scores range anywhere from 300-900, and this number will tell the mortgage lender how much of a risk you are based on past history – the higher the score, the lower the risk. The average score usually hovers around 700.

 

The criteria and scoring percentage to determine your score is:

 

Credit Performance *Payment History* 35%
Current level of indebtedness *Credit Utilization* 30%
Amount of time credit has been in use *Age of File & Number of Trades* 15%
Pursuit of new credit *Inquiries (Number of Inquiries & Product Mix)* 7-10%
Derogatory References *Public Records, Collections, Judgments, Bankruptcies* 10-13%

 

Don’t be discouraged if your score isn’t as high as you thought it would be – a few simple changes and in a matter of months your score can rise drastically. It’s always a good idea to check this before house hunting as well, in case changes need to be made.

 

Got a mortgage question? I have your answer!

Kristin

http://angrybirdsgamer.com
http://angrybirdsgamer.com

11 Dec

Before you find your dream home

General

Posted by: Kristin Stauffer

Have you decided that this is the year you want to buy your first home? Maybe you are going to upgrade or move to a different part of the city. A rental property perhaps?


Before you start scouring the internet, get pre-approved!


A mortgage pre-approval will do a few things for you that could end up saving you a lot of stress and disappointment later on. The first thing it will do is give you a good idea of what you can afford. Your maximum purchase price will be calculated so that you do not end up falling in love with a house that you cannot afford to purchase.


The pre-approval will also lock in a mortgage rate for 120 days. This saves you from worrying about rising interest rates and free to focus on finding that house you have in mind.


It will also give you a chance to see if any changes need to be made prior to your new purchase. Maybe there is an error on your credit bureau that requires an update, or some credit cards that need to be paid off in order to make your qualifying ratios work – if you find these details out prior to making an offer on a house this leaves you plenty of time to make the changes and get everything in order.


There are nothing but benefits to doing a mortgage pre-approval. The pre-approval can then be extended as long as you like, everytime rates drop you’ll benefit from those as well – without even having to lift a finger.


Got a mortgage question? I have your answer!


Kristin