Are you new to Canada and looking to buy here?

I hope everyone’s had a great week. The days seem to fly by don’t they? No doubt havinga mild winter helps. Lately, I’ve come across new immigrants andindividuals on work permits that have been looking to buy in Canada. Oftentimes it is not straight forward to find a mortgage. Using a mortgage brokercan help to quickly access your situation and choose the right mortgageproduct. Often times such families or individuals have no or little credithistory in Canada, or may be on be on contract rather than full time salariedemployment.

Some banks have issue with contract employment but don’t get discouragedas options do exist.  In cases like this youmay be required to put between 15% and 35% down depending on your specificcredit and employment circumstances. Something to keep in mind, if you aremoving down payment funds from abroad to Canada you will want to have the fundshere in Canada prior to having an accepted offer on a property. In most cases,you will not receive a final mortgage approval until the funds are in aCanadian bank account. Simply demonstrating that you have the funds abroad maynot be sufficient and you run the risk of losing that property.

If you have a mortgage, debt-related question or would like to share anexperience feel free to contact me. 

Homeowner Assistance Programs

Hope everyone’s had a good week. In this week’s blog, I’dlike to talk a little about mortgage assistance programs. Mortgage assistanceprograms are aimed to help Canadian homeowners who are having temporary trouble making their mortgage payments. Common situations like job loss,reduced income, marital separation, or unexpected illness and disabilityclearly contribute to one’s ability to their mortgage. In order to qualify forsuch programs you first need to have had bought or refinanced your home witheither the Canadian Mortgage and HousingCorporation (CMHC) or GenworthFinancial which are the two major mortgage insurers in Canada. In otherwords, you needed to have picked up some mortgage or aka default insurance inthe past.  

If you find yourself having trouble paying your mortgage dueto one of the reasons listed above then its best you speak to your bank aboutyour options. I suggest this be done before you becomes late on payments and itbecomes a problem. Together your bank and your insurer will discuss yoursituation and if possible create a plan that helps you out. The mortgage insurershave specialists that deal with such matters. Some options permit you toincrease your amortization, defer payments or even create a shared paymentplan.

I don’t think enough homeowners are aware that such programsexist.  If you feel you need assistancewith your mortgage I would be more than happy to guide you to the best of myabilities regardless if you become a client or not. I am more interested inhelping you get back on track. After all there are bigger things to worry aboutin life.

If you have any specific questions or good and badexperiences you’d like to share please feel free to contact me. I welcometopics for next week’s blog.

Ready for 2012 & Habitat for Humanity Announcement

I hope everyone has slowly gotten back into gear and that2012 is off to a good start. I took some time over the holidays to relax but also met with a few clients. One family that I met with had decided to take the plunge and build their own house five years ago in Saint Lazare. Now they were looking to renew their mortgage and pay off some debts. Let me tell you the house was very impressive and a good example how building your home with a contractor is possible! My client went to the bank herself to get the construction mortgage. She said her experience was mixed and she didn’t get the guidance she expected nor was the process clear.  Speaking to a mortgage broker about a new construction helps with not only planning but understanding all the steps involved in building a home in phases. 

Secondly, I wanted to take a second to announce a new initiative that we at North East Mortgages are working on. We have partnered with Habitat for Humanity Montreal and the Habitat for Humanity Montreal ReStore(http://habitatmontreal.qc.ca/en/restore).Many people know about the valuable contribution Habitat does in building homes but few have heard of the ReStore. Yes, I know it’s based near Atwater Market in Montreal but it’s worth the drive from the West Island, Saint Lazare or even Hudson. The ReStore is one of Montreal’s best kept secrets where manufacturers and hardware stores donate hardware goods from paint, sinks, and anything else you can think of when renovating.  The prices are incredible low and proceeds get pumped back into Habitat so they can keep helping people. Please check out their website and location.

Habitat for Humanity

Hey everyone wanted to announce that North East Mortgages is now partnered with Habitat for Humanity Quebec and their awesome ReStore (http://habitatmontreal.qc.ca/en/restore). The ReStore is a retail hardware store thanks to the generous donations from distributors, retailers, manufacturers, and construction companies to support Habitat for Humanity's mission. The ReStore carries everyday construction materials and products we all need for our home. You will be shocked by the low prices! The ReStore is really the city's best kept secret.

I am really excited to work with this cause as I have seen the benefits of their work when I lived in Maine. Please stay tuned to more announcements and events.

What do I need to think about when selling my home and buying a new one?

The holiday season is fast upon us. Good luck to us last minute shoppers this week! Wow this year has totally flown by. I wanted to send my best wishes and happy holidays to all the vistors to the North East site and all our clients.

In true holiday spirit, we all will eat a lot, find great gifts for those we care about but also have dreams of Santa getting us that new home. Okay well maybe not Santa... If you’re thinking about putting your home on the market in January or February and in the hunt for a new home then take a minute to plan ahead a little. It’s not a bad idea to first figure out how much your home may realistically fetch and how much you will have net left in your pocket after repaying the mortgage, mortgage penalty (if any), real estate broker fees, lowering personal debts, etc.

With an idea of down payment in mind then it’s a good idea to get pre-approved for a mortgage. Make sure your mortgage pre-approval holds the rate into spring or early summer. Together this will give you good idea about budget and what’s reasonable to expect. What’s important is not be financially over-stretched. The step after that is the fun part, start the house hunting process with a good real estate broker.

If you have any questions or experiences you’d like to share please feel free to contact me even over the holidays.

Residential Mortgage ABC’s

I hope that everyone’s had a great week. I’ve decided tofocus this week’s column on a couple mortgage basics. I often hear thatterminology and mortgage options are not properly discussed at the bank.Hopefully this helps...

Interest rate: isthe rate of return a lender receives for permitting you (the borrower) for aspecified term (or duration). 

Term: when yousign for a new mortgage you can usually choose the duration of your term (1, 2,3, 4, 5 years or more). If you decide to sell or refinance within your term youcan usually expect to pay a penalty to the bank. Upon completing your term, youare permitted to refinance or change banks without penalty. 

Fixed and variable: Fixedrates remain set throughout your mortgage term. Variable rate mortgages arealso set to a term but fluctuate based on the Bank of Canada. Choosing betweeneither is based on your personal risk tolerance and you must qualify. 

Amortization period:is the number of years it takes to pay back your mortgage. Maximum amortizationis currently 30 years but some lenders still offer 35 years but you need toqualify.   

Frequency:  refers to frequency of your mortgage paymentsuch as weekly, accelerate bi-weekly, and monthly. What frequency you choose isimportant as it help pay your mortgage down quicker.

Closed versus an openmortgage: If you are looking to buy a property and “flip-it” within 2-3months then an open mortgage may be what you’re looking for.  The rate is higher but you can break yourmortgage at any time without penalty. A closed mortgage is exactly how itsounds closed for the duration of your term and there are generally penaltiesfor breaking it.

Cash back: A cashback mortgage is great if you’re a first time buying and need a little helpwith your down payment.  If you have goodcredit then you could qualify to get up to 5% cash back to supplement yourexisting down payment.  Make sure youwill keep your home for your term otherwise you will have two penalties, themortgage penalty and you will also be expected to repay the cash backportion.  

Secured line ofcredit: is a line of credit attached to your home which is based on thesame principles as a variable mortgage. I would suggest that you use it as a short to medium term financial toolbecause the closer you get to your limit the more it could affect your creditscore. Lines of credit compound monthly.

If you have any specific questions or good and badexperiences you’d like to share please feel free to contact me.

What is a mortgage pre-approval?

Welcome to the calm before the upcoming buying storm. If youare thinking of buying between now and next summer then its good idea to getpre-approved by a bank. The mortgage pre-approval process is not that complexbut quite valuable. Think of it like a doctor’s check-up where your income,credit and downpayment are reviewed and “qualified.” All three factors areimportant considerations when a mortgage application is analyzed by not onlythe financial institution but also the mortgage insurer.

Some clients place ahead which is great but at times I havemet with clients after they have an accepted promise to purchase in play. Inmost cases that’s fine but I have seen more and more situations where the clientsrealize they are either over-budget, or don’t qualify due to other controllablefactors (that could have been fixed prior). It’s never fun to find out that inthe midst the financing deadline that you cannot qualify for a mortgage with anA-lender.  A pre-approval is also importantas it shows the real estate broker representing the vendor that you are aserious buyer.   

If you have any specific questions or good and bad experiencesyou’d like to share please feel free to contact me.