Quick mortgage and buying tips for first time buyers

Are you thinking of upgrading your home? Are you tired of renting? Wellit’s definitely not too late as the buying season is upon us. Here are couplequick tips to keep in mind:

Tip #1: Make a personal budget. If you’ve been renting all yourlife and now looking to buy then it’s not a bad idea to put pen to paper andget an idea your monthly expenses.

Tip #2: Get a mortgage pre-approval with a mortgage broker.  A mortgage pre-approval will give you a good ideaof your buying power. Look closely at your future mortgage payments, taxes,heating, and new home insurance costs. Ask yourself, does this make sense? Doesthis fit within your personal budget?

Tip #3:  Save for a downpayment. Try to save at least 5-10% of your purchase price. You also canconvert your RRSPs to help you with that down payment. Did you know you can useup to $25,000 per applicant? If you only have a little aside but not enough fora full 5% then consider a "cash back mortgage" but look at the fine print.

Tip #4:  Build good credit.Credit is very important. As a first time buyer it’s a good idea to have atleast two major trade lines for good two years. Hmm I think I've said this before...pay your credit cards on time. Watch your limits. And keep those creditinquiries in check. Too many can definitely effect your credit score.

If you have a mortgage, debt-related questions or would like to sharean experience feel free to contact me.  Havea great week.

Genworth and CMHC Mortgage Assistance Coordinates

Hey everyone, I had a quite a bit of feedback and calls in response to my blog post related to Home Owner Assistance Programs. Thanks for the feedback and glad to hear that the information was useful. I got a couple calls requesting Genworth's and CMHC's mortgage assistance coordinates. I thought I'd post them in case others might need them too. If you don't remember if you are insured with the CMHC or Genworth then simply call your bank and ask. They will know.

Genworth Financial Canada
1-800-511-8888
http://www.homeownerassistance.ca

Canadian Mortgage and Housing Corporation (CMHC)
1-866-358-9999 and ask for a default agent or "agent gestion défaut"

Tips on how to improve your credit score

Managing your personal debts is often on our minds but have you thoughtabout your credit report? I met with a client over the weekend who told me he’snever seen his credit report. So we pulled it together and had a look. To hissurprise his score was in the 640s which is decent but clearly he could havebeen over 750. The credit system in Canada is an algorithm that tracks ourconsumption of credit. This “points system” ranges from 300 to 900 points. Ideally,to get mortgage with a top bank, meaning best rate but also favourable conditionsshould be generally above 650.

Tip #1: Watch your credit limits. In this gentleman’s particularcase he had maxed out all his lines of credit personal and secured. I am not afan of lines of credit as it’s very easy to spend the money and once you exceed50% of your limit then your score begins to drop over time.

Tip #2: Watch out for those pesky credit checks. Every time you applyfor a cell phone, satellite TV, a retail card, and even your contractor maypull a credit check on you. They need your permission but they don’t alwaysask! Too many checks in a concentrated period of time can drop your scoresignificantly.

Tip #3: Pay on time and pay at least your minimum. Sounds simplebut pay all your credit cards, car lease, lines of credit and even that cellphone bill on time. Remember even a wire transfer of funds can take 3-5business days to clear. The credit report tracks payment history for 6-9 years. If you have any collections take care ofthem ASAP.

If you keep all three factors in check then your score will increase butkeep in mind positive results are not real time rather can take 2-4 months adjuston your report. If you have a mortgage, debt-related questions or would like toshare an experience feel free to contact me. 

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.