18 Oct

How Easy It Can Be To Reduce Monthly Expenses- Mortgage Restructure

General

Posted by: Angela Calla

Many of us have had life experiences in which we have accumulated debt.   Maybe it was for a wedding, maturity leave, a sick relative, a slow patch in business, a lost job or job change, and sometimes all of these can even happen all at once!   It can feel like a crushing weight on your life and something that you can’t get out of when you have so many payments to make, including a mortgage, car loan, credit cards and lines of credit.

6 out of 10 Canadians are living paycheque to paycheque, so the feeling of being “stretched” is quite common. If you own a home, you may have an opportunity to completely change your situation for the better with a simple restructure of your finances.

Something to consider:  

Mortgage of $400,000.00 2.99% for $1,895.00/month,

$25,000 line of credit at 3.2% for $67.00/month (interest only),

$30,000 Car loan at 0% for $600/month,

$20,000 Credit card at 19% for $400/month,

$15,000 Credit card at 11% for $300/month,

$30,000 Student loan for $700/month.   The Total Monthly Payments Combined are at $ 3,962.00.  

Why not consolidate all of these debts into a low rate mortgage?  The New Monthly Mortgage Payment would be $2,466.00!   THAT’S SAVINGS OF $1,496.00 EACH MONTH!!!

*this is the net benefit after mortgage penalty and new closing costs and is subject to final approval by a lender*.

You might be thinking, “Why would I consolidate a loan that has a 0.00% interest rate?”.

It would be to improve your cash flow so that you can save money every month and cancel the cycle of getting into higher interest rate debt.

If you’re saving $1,496.00 per month, you can put money aside AND pay down your one debt faster (the mortgage), therefore creating a more flexible budget moving forward.

Do you, or someone you care about, want to see if this is a good option?  Our service is free! It’s as easy as calling 604-802-3983 or emailing us callateam@dominionlending.ca  so we can evaluate your options, which would involve a brief conversation and some documentation to confirm that you qualify for a restructure of your finances.

 

Angela Calla, AMP

DLC-Angela Calla

www.angelacalla.ca 

 

 

11 Oct

Understand How Your Mortgage Is Registered

General

Posted by: Angela Calla

Every mortgage secured by a property will be registered with the land title office.There are two ways your mortgage can be registered on title: Standard charge or collateral charge.  Not long ago, most lenders registered all mortgages as a standard charge.  In recent years, some lenders – mainly the major big banks – have moved towards using the collateral charge.

When choosing your mortgage it is vital you fully understand the terms you are agreeing to. Choosing the right mortgage can protect your interest now and in the future.  Let’s focus on the major differences between the two charges/liens that your mortgage can be registered as.

Know How Your Mortgage Is Registered

STANDARD CHARGE MORTGAGE

A standard charge mortgage is registered for the amount of your mortgage only.  A standard charge mortgage allows you the freedom to freely move lenders at renewal time without incurring legal fees.  As a borrower, you want to be in a standard charge mortgage because it gives you the leverage to shop options at renewal.

A standard charge mortgage allows you to borrow more in the form of a second mortgage or a home equity line of credit (HELOC).  As you pay down your mortgage you can access the equity you’ve gained. This is the preferred method. 

COLLATERAL CHARGE MORTGAGE

A collateral charge mortgage is registered on title for more money than you require to close.  For example, a $500,000 mortgage might be registered on title as a $600,000 charge.  The lender will tell you this is beneficial because it makes it easier to access the home equity without incurring legal fees. What is often ommited by the lender directly in this case is they still requalify you as with any mortgage change if you want more money than originally approved for.

The major downside of a collateral mortgage becomes evident at your maturity date.  If you want to change lenders in order to obtain a better product or rate, you are on the hook for legal fees.  This often deters borrowers from moving lenders and they can feel “forced” to take whatever renewal rate their current lender is offering.

With a standard charge mortgage, in most cases, the new lender will cover the charges under a straight switch(no new money) in order to earn your business.  This means no fees to you and the ability to shop for the best mortgage. For that reason and the fact that you have to requalify anyway if a change is needed this is our preffered option and is reviewed first for our personal applicants. You would only have a collateral charge if they lender required for your personal circumstances that was required at that timeof obtaining the mortgage.

Navigating through the mortgage process alone can be tricky. The Angela Calla Mortgage Team is here to help personally callateam@dominionlending.ca 604-802-3983 

7 Oct

4 Positive Considerations From The Federal Changes

General

Posted by: Angela Calla

The rule changes came as a surprise to some, but to us mortgage experts, this is the normal cycle in business that makes us grateful to be experts that lead with clarity. The reality is, the announcement is unpopular because it reduces options for some home buyers.   

 However, I must ask you to consider the following:

 1. If you were considering taking a variable rate or anything but a 5 year fixed term, you were already qualifying at the benchmark rate!  That’s right!  Until now, a 5-year fixed rate was the only loophole around the higher qualifying rate, so this change will not squeeze as many people’s qualifications as they think.  In fact, most of our personally pre-approved clients continue to shop as they were before because they were pre-qualified using the higher benchmark rate to begin with in order to allow for a fluctuation in the market such as this.  

2. Built in payment shock avoidance- here is how easy it is to crush your mortgage:

If your minimum payment on a 400k 25-year mortgage is only $1,793.00/month but the qualifying rate payment is $2,256.00/month, imagine this… Put that $463-per-month difference towards your mortgage and after 5 years you only have 13 years and 7 months remaining instead of 20.  

3. Don’t forget what happened in 2008!  Qualification rates AND the rate you paid were both an average of 5.99%! Today’s qualifying rate is still lower than this.  We have a massive opportunity right now to pay down our mortgages with this gift of low rates.  Check this out:

A mortgage of $250,000.00 in 1995 at a rate of 10.6% had payments of $2338/month and the total cost of borrowing was $701,361.00.

A mortgage of $500,000.00 today at 2.49% has payments of $2238/month ($100 less than in 1995) and the total cost of borrowing is $671, 203.00 ($30,000.00 LESS than 1995).

 

4. Opportunities will arise in any market, just as they’ve always done.  It’s the professionals and experts with which you align yourself that make all of the difference.  As your mortgage experts, we will always help you optimize any market with our ongoing mortgage management strategies.

 

If you want to learn exactly what opportunities are available for you, my team is personally here to help you with anything related to your mortgage.

 

Angela Calla, AMP

Dominion Lending Centres-Angela Calla Mortgage Team

Host of The Mortgage Show Saturdays at 7pm on CKNW AM980

Phone: 604-802-3983 Fax: 604-939-8795

“An introduction to someone you care about is a big responsibility…it’s also the biggest compliment a client can give us & it’s not taken lightly. We pledge to treat everyone that is referred to us with the utmost respect & professionalism”.

www.angelacalla.ca

6 Oct

Angela Calla Breaks Down Canadian Mortgage Changes for Point To Point Homes

General

Posted by: Angela Calla

On the 3rd of October 2016, Canadian Federal Finance Minister Bill Morneau presented a substantial list of changes to mortgage policy. While the argument has been made that the Canadian real estate market can benefit from new rules meant to temper the hectic influx of foreign money, these regulations will have an impact on local home buyers as well.

mortgage-blog-image

We’ve asked Vancouver mortgage expert Angela Calla how these changes will affect all sectors of the real estate market, including Canadian mortgage. Here are her insights on the matter:

What do the new mortgage rules mean?

The first and most important consequence of this policy change is the fact that borrowers now have to qualify at a higher interest rate than what they’re actually getting. Previously, the only “stress test” that was done this way was for variable rate mortgages and for any mortgage terms less than 5 years in length. Now, 5-year fixed mortgages will be qualified at the current benchmark rate of 4.64% (Bank of Canada 5-year Posted Rate).

This means it will now be just as difficult to get a 5-year fixed rate as it is to get a variable or shorter term mortgage. Also, all mortgages will now have to be qualified at a 25-year amortization, even if the borrower takes a 30-year amortization on their mortgage.

Long story short, getting a mortgage will be more difficult.

Who’s affected by the new mortgage rules?

Here’s a breakdown of how these new market trends will affect borrowers and lenders. The Canadian Department of Finance has published a technical guide on the new set of rules, which explains who will be impacted by them at length, but the gist of the issue is this:

  • Mortgage applications completed by the lender prior to October 17th 2016 remain unaffected;
  • Pre-approvals however, may be void after this set of changes comes into effect. You will definitely have to re-check your eligibility in terms of purchasing power.

For example, even if you have a 20% down payment, you may have to qualify using a 25-year amortization instead of the 30-year used to qualify you previously. This means that if you were pre-approved on a 30-year amortization, that pre-approval will be void after the changes come into effect.

The purchasing power needed to get mortgages is also addressed by these changes. Before, a household income of $80,000 would qualify you for a mortgage of about $500,000, using a 5-year Fixed Rate qualification. Starting October 17th, you will need a household income of $100,000 for that same mortgage amount.

What’s the bottom line on Canadian mortgages now?

If your mortgage application hasn’t been finalized yet, you’ll have to check whether these changes apply to you. There will be a ripple effect, which will affect property value and borrowers’ ability to refinance. However, interest rates for mortgages are still expected to remain near record lows – only the qualification requirements are rising.

The reason why these changes are being implemented is preemptive – if the market changes and rates increase, it will be harder for existing Canadian borrowers to say they can’t afford the mortgages for which they were approved. This is because from now on, they will be qualified for much higher rates than what they’re actually receiving from lenders.

The Moral of the Mortgage Story

In today’s market, when guidelines are changing at a blistering pace, choosing a mortgage application completion date of more than a month away can be very risky. In addition to that, it would be wise to consult an independent mortgage professional. They are at the forefront of industry changes and have access to multiple lenders and options. This allows for more clarity and better strategies for any mortgage that you’re looking to obtain.

Expert insights brought to you by Angela Calla, mortgage broker with Dominion Lending Centres, and host of The Mortgage Show on Vancouver’s CKNW radio news station.  

http://www.point2homes.com/news/canada-real-estate/expert-insights-new-canadian-mortgage-rules-impact.html 


6 Oct

Angela Calla Gives Sound Advise to 1st Timers As Seen in The Globe & Mail

General

Posted by: Angela Calla

How does a first timer get into the market? Start with sepaking with a mortgage professional.

Read the full article that was published here: http://www.therac.ca/content/sound-creative-solutions-for-first-time-homebuyers  

Summary below,

The same principles apply in the Vancouver region, says mortgage professional Angela Calla, who is also the host of The Mortgage Show on CKNW Radio. “A one-bedroom condo in downtown Vancouver can cost $500,000 on average, which would take a gross annual household income of approximately $100,000 to qualify for. If you look at Port Coquitlam or Coquitlam, which is a 30-minute commute from the downtown core, a one-bedroom condo can still be purchased for around $200,000, which takes a gross annual income of approximately $40,000 to qualify for,” she explains. “For the Coquitlam condo example, you would need to have a $10,000 down payment. Your mortgage payment is approximately $890 a month, plus $300 in strata fees and taxes. That puts your total monthly payment at around $1,190.”

An estimate like this can help potential homebuyers test their appetite for owning a place. “If you are paying over $1,500 a month in rent, why not take a look at what’s out there for you?” suggests Ms. Calla.

She adds that it’s never too early to seek advice. “Knowing your goals can help you map out the steps for getting there. If you are saving for a $10,000 down payment, for example, and you’re starting from zero, you would aim for saving $834 a month for a year by finding ways to reduce your spending or bringing in that money by selling an asset,” she says. “And if you have outside debt, it’s important to know which loans should be paid out to help your qualifications along.”

Mortgage Questions? Contact The Angela Calla Mortgage Team directly at 604-802-3983 or callateam@dominionlending.ca 

6 Oct

See How Much Mortgage You Get With Your Income

General

Posted by: Angela Calla

Oct 6th 2016

In today’s market many Canadian’s want to know, what options they actually have.

Below is a table of 11 examples of approximately what your income qualifies you for in mortgage.

Keep in mind if you carry debt outside your mortgage this will decrease your amount and if you’re self-employed you may show less gross income than you actually earn. Also, if your property has an income generating suite that will add income to your file.  

This is a general guide, to learn exactly what you personally qualify for or how to be positioned best contact The Angela Calla Mortgage Team directly at 604-802-3983 or callateam@dominionlending.ca

Income Amount Annually= Mortgage Amount
40,000.00= 200k
50,000.00= 250k
60,000.00= 300k
70,000.00= 350k
80,000.00= 400k
90,000.00= 450k
100,000.00=500k
110,000.00=550k
120,000.00=600k
150,000.00=750k
200,000.00=1 million
You can likely see the trend that every 10k in income amount generally qualifies you for 50k in mortgage. When budgeting for your payment every 100k in mortgage is on average $445/month
Providing clarity is what we do, we look forward to helping you personally.
Angela Calla

Mortgage Expert
DLC-Angela Calla
Host of The Mortgage Show CKNW AM980 Saturdays at 7pm
www.angelacalla.ca

3 Oct

Breaking News- New Mortgage Qualifications October 17th 2016

General

Posted by: Angela Calla

 Oct 3rd 2016

Federal Finance Minister Bill Morneau unveiled sweeping changes that will affect all sectors of the housing market, including rules aimed at slowing the flood of foreign money into the market and stricter borrowing qualification requirements from lenders.   The changes can be viewed here: http://www.fin.gc.ca/n16/data/16-117_1-eng.asp

This means that borrowers have to qualify at a higher interest rate than what they’re actually getting.   Previously, the only “stress test” that was done this way was for variable rate mortgages and for any mortgage terms less than 5 years in length.   Now, 5 year fixed mortgages will be qualified at the current benchmark rate of 4.64% (Bank of Canada 5-year Posted Rate).   This means it will now be just as hard to get a 5-year fixed rate as it is to get a variable or shorter term mortgage.   Also, all mortgages will now have to be qualified at a 25-year Amortization, regardless if the borrower chooses to take a 30-year amortization on their mortgage.

What This Means:
1. Mortgage applications completed by the lender prior to Oct 17th 2016 are
fine. See the roll out technical link here:
http://www.fin.gc.ca/n16/data/16-117_2-eng.asp
2. If You Have A Pre-Approval it may be void after the changes, so you definitely want to check how this will impact your purchasing power.
Even if you have a 20% down payment, you may have to qualify using a 25 year amortization instead of the 30 year used to qualify you previously.

As An Example:  Before the changes, a household income of $80,000 would qualify you for a mortgage of about $500,000 using a 5-year Fixed Rate qualification.   With the changes as of October 17th, you will then need a household income of $100,000.00 for that same mortgage amount.   
Bottom line: If you’re trying to obtain a mortgage that hasn’t
been finalized yet, verify what changes are applicable to you.
The ripple effect may mean a decrease in your property value and your ability to refinance. 
To place this into perspective, in 2008, fixed rates were 5.99%.  This is still much
higher than the current qualifying rate of 4.64%.   Interest rates
that borrowers will actually get are still expected to remain near record lows.
Why Is This Being Done?
If the market changes and rates increase, it’s harder for existing Canadian borrowers to say that they now can’t afford the
mortgages for which they were approved due to the fact that they were qualified using a much higher rate than what they were actually receiving.
Let this also be a reminder of how choosing a completion date that is more than a month away can be risky, especially in times like today when
guidelines can change very rapidly.
Rest assured, an independent mortgage professional is at the forefront of these industry changes and has access to multiple lenders and options. This allows for more clarity and better strategies for any mortgage that you’re looking to obtain. We are always here personally to help you navigate the market and get the best options

Angela Calla

Mortgage Expert

Dominion Lending Centres 604-802-3983 callateam@dominionlending.ca www.angelacalla.ca