Do you have a mortgage? So do I! Looks like we have something in common. Did you know that 6 out of 10 consumers break their mortgage 38 months into a 5-year term? That means that 60% of consumers break a 5-year term mortgage well before it’s due…but do you also know what the implications are of this? Let’s take a look!

People need to break a mortgage for a variety of reasons. Some of the most common include:
· Sale and purchase of a new home *without a portable mortgage
· To take equity out/refinance
· Relationship changes (ex. Divorce)
· Health challenges or life circumstances are altered

And a whole other variety of reasons. So what happens if you have one of the above reasons, or one of your own occur and you have to break your mortgage? Here is an example of what would happen:

Jane and John Smith have lived in their home for 2 years now. When they bought the home, they recognized that it would need some major renovations down the road, but they loved the location and the layout of the home. They purchased it for $300,000 and have 3 years left but would like to access some of the equity in their home and refinance the mortgage to afford some of the bigger home renovations. This refinancing would be with 3 years left on their current mortgage. So, what are Jane and John looking at for cost? There are two methods that are used to calculate the penalty:

POSTED RATE METHOD (used by major banks and some credit unions)
With this method, the Bank of Canada 5 year posted rate is used to calculate the penalty for Jane and John. Under this method, let’s assume that they were given a 2% discount at their bank thus giving us these numbers:

Bank of Canada Posted Rate for 5-year term: 5.14%
Bank Discount given: 2% (estimated amount given*)
Contract Rate: 3.14%
Exiting at the 2-year mark leaves 3 years left. For a 3-year term, the lenders posted rate. 3 year posted rate=3.44% less your discount of 2% gives you 1.44% From there, the interest rate differential is calculated.
Contract Rate: 3.14%
LESS 3-year term rate MINUS discount given: 1.45%
IRD Difference = 1.7%
MULTIPLE that by 3 years (term remaining)
5.07% of your mortgage balance remaining. = 5.1%
For the Smith’s $300,000 mortgage, that gives them a penalty of $15,300. YIKES!

Now, Jane and John were smart though and used their Dominion Lending Centres broker to get their mortgage. Because of this, a different method is used.

PUBLISHED RATE METHOD (used by broker lenders and most credit unions)
This method uses the lender published rates, which are generally much more in tune with what you will see on lender websites (and are generally much more reasonable). Here is the breakdown using this method:
Rate when you initially signed: 3.24%
Published Rate: 3.54%
Time left on contract: 3 years
To calculate the IRD on the remaining term left in the mortgage, the broker would do as follows:
Rate when you initially signed: 3.24%
LESS Published Rate: 3.54%
=0.30% IRD
MULTIPLE that by 3 years (term remaining)
0.90% of your mortgage balance
That would mean that the Smith’s would have a penalty of $2,700 on their $300,000 mortgage.

A much more favourable and workable outcome! Keep in mind that with the above example is one that works only if the borrower has:
· Good credit
· Documented income
· Normal residential type property
· Fixed rate mortgage

For Variable rates mortgages, generally the penalty will be 3 months interest (no IRD applies).
If you find yourself in one of the scenarios that we listed at the start of this blog, or if you just need to get out of your mortgage early, be smart like Jane and John—review your options with a DLC Broker! In the example above, it saved them $12,600 to work with a broker! It really does pay to have a Mortgage Broker working for you.

Geoff Lee
Dominion Lending Centres – Accredited Mortgage Professional

Angela Calla, Mortgage Expert, AMP of the Year in 2009 has been helping British Columbian families save money with the best mortgage strategy for over a decade from her Port Coquitlam office location. She is a regular contributor to national and regional media outlets and long-time host of The Mortgage Show on CKNW Saturdays at 7pm, and sits on many advisory boards for mortgage lenders & insures. For guidance with your mortgage we can be reached to help you or for media inquiries at callateam@dominionlending.ca or 604-802-3983

The Bank of Canada today maintained its target for the overnight rate at 1 ¼ per cent. The Bank Rate is correspondingly 1 ½ per cent and the deposit rate is 1 per cent.

Inflation in Canada is close to 2 per cent as temporary factors that have been weighing on inflation have largely dissipated, as expected. Consistent with an economy operating with little slack, core measures of inflation have continued to edge up and are all now close to 2 per cent. The transitory impact of higher gasoline prices and recent minimum wage increases will likely cause inflation in 2018 to be modestly higher than the Bank expected in its January Monetary Policy Report (MPR), returning to the 2 per cent target for the rest of the projection horizon.

Read More: Here

Angela Calla has been a licensed mortgage broker for 14 years. She has been with Dominion Lending Centres since its inception in January 2006. Residing in Port Moody, British Columbia, Angela is a regular expert guest on several news stations, television shows, radio programs and local and national publications. She was the AMP of the year in 2009, and has consistently been one of DLC and the industry’s top performers since 2006. She can be reached at callateam@dominionlending.ca or 604-802-3983

One of the toughest challenges for homebuyers is being able to save money at the rate of property price increases.

We know many high-income renters would like to be homeowners, but they’re just unaware of how to make the transition and are unable to save fast enough.

There are several options which are great for a down payment if you can use a combination or one of the traditional methods:
1. Savings
2. Gift from parents
3. RRSPs
4. Selling an asset
5. Inheritance

The B.C. government recently removed the equity partnership program, but there still is a remaining option.

Kindly keep in mind this option won’t be for everyone as the following criteria must be met; it’s simply to illustrate the opportunity to go from renter to owner as soon as possible.

The Flexible Down Payment program allows homebuyers to use existing credit facilities as their down payment.

DETAILS:
Minimum household income required is $200,000 combined
• Minimum 650+ beacon score
• Minimum 2 years history reporting on Credit Bureau
• Sources of down payment: line of credit, credit card, personal Loan
• Include borrowed down payment in the debt servicing of the deal. Example: Unsecured LOC at 3%, Credit Card at 3%, store brand Credit Card at 5%, Personal Loan at actual payments.
• No late payments in the past 36 months
• High Ratio Deals only: 90.01-95% LTV
• 25 year amortization
• Strong Employment History
• No previous bankruptcy or consumer proposal

We can walk you through the details, contact us today!

Angela Calla has been a licensed mortgage broker for 14 years. She has been with Dominion Lending Centres since its inception in January 2006. Residing in Port Moody, British Columbia, Angela is a regular expert guest on several news stations, television shows, radio programs and local and national publications. She was the AMP of the year in 2009, and has consistently been one of DLC and the industry’s top performers since 2006. She can be reached at callateam@dominionlending.ca or 604-802-3983.

People have a lot of different ideas on how they want their home to look. Some want a modern look while others like traditional cottages. But one thing that more and more people want is smart technology in their homes. This adds value and desirability to your home making it easier to sell for the asking price.

In a recent survey, 35% of first time home buyers put smart technology as a priority in their home purchase.

What is a smart home? A smart home is a residence that uses internet-connected devices to enable the remote monitoring and management of appliances and systems, such as lighting and heating.

Read more: 4 Smart Features

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advice with choice. We are here to help you personally with your mortgage at 604-802-3983 or callateam@dominionlending.ca

You’ve decided it’s time to buy a new home. Whether it’s your first home or 25th, you’re now seeking a mortgage. And one of the first steps to getting the financing in place for your dream home is getting pre-approved for that mortgage. But before you start hunting for your new home, you need to understand a few things about the pre-approval process.

We know going through any financing approval process can be stressful. While it will never be stress free, there are some steps you and your mortgage broker can take to make it less of a nail-biter.

You should never assume you’re going to get financing because you make a lot of money, or if you’ve had numerous mortgages over the years.

A good broker will ask for all the necessary documents up front, like your T4s and recent pay stub. The reason why you want to provide your mortgage broker with all the necessary documents in the pre-approval stage is so there won’t be any surprises once your application hits the lender. This will also provide a game plan for what you’ll need to do if there are any speedbumps in the application, while also utilizing your time and the realtor’s and broker’s time so they know what they’re working with and are able to finance. Getting all the documents early also indicates to the broker and realtor you’re serious and makes the pre-approval more firm.

Where most brokers and lenders go wrong is they do a pre-approval but fail to collect documents. All of the sudden, a live offer comes in, but it doesn’t work.

If you get “pre-approved” without a request for documents, it’s basically worthless. It’s also good to note, no lender will give you a firm approval until you get an offer that is accepted.

So, you’ve now found the home you want and have an accepted offer. You’re moving from pre-approval to actual approval of financing but you’re not out of the clear yet. Any final approval is pending the lender confirming the details. Just because you’re pre-approved, doesn’t mean you’ll eventually be approved for any property you want. In some cases, you could have all the right income and credit on your side, but the property is a mess and you get declined. There’s a lot more that goes into to being approved than just income. Items like strata documents and property details are all part of the ingredients in your final approval sauce.

Even with all the documents, you’ll likely be advised by your mortgage broker, they’re only good for 30 days and you could be asked to update them for final approval when the time comes. But unless you’ve lost your job, bought a new expensive boat or run into some type of financial difficulty, updating should be a lot less stressful.

And it’s better to be stressed out about financing at the beginning of the home-buying process, rather then once you’ve got your heart set on a home you might not be approved to buy.

Angela Calla has been a licensed mortgage broker for 14 years. She has been with Dominion Lending Centres since its inception in January 2006. Residing in Port Moody, British Columbia, Angela is a regular expert guest on several news stations, television shows, radio programs and local and national publications. She was the AMP of the year in 2009, and has consistently been one of DLC and the industry’s top performers since 2006. She can be reached at callateam@dominionlending.ca or 604-802-3983.

Does your credit score keep you up at night? For some, this one detail in their life doesn’t pop up in their mind very much, because they know they’re making good money and paying all the bills on time. When you’re in that boat, it feels pretty good. But when you miss a payment or you struggle to pay all those credit cards, lines of credit and even your mortgage, it feels instead like you’re on a sinking ship without a life raft to save you.

If you’re credit challenged but want to get into the housing market, it can be a tough road to hoe. But improving your credit to a point where a lender will give you chance, is very doable.

First, I won’t bore you with the detailed minutia of credit scores. Basically, what you need to know is a score above 680 puts you in a good position to get financing, while below will make it tough and improvement is needed.

Your credit score tells lenders some basic stuff about your credit: How long you’ve had credit, your ability to pay back that credit and how much you owe. And so your credit score is affected by how much debt you’re carrying in regards to limit, how many cards or tradelines you have and your history of repayment.

If you’re a young person and new to the world of credit, consider the 2-2-2 rule to help build up your credit. Lenders want to see two forms or revolving credit, like credit cards, with limits no less than $2,000 and a clean history of payment for two years. It’s also good to note, a great credit score will also include keeping a balance on all those cards at any given time below 30 per cent of the limit.

To ensure your score stays in playoff form, make sure to pay off any collections, like parking tickets, and correct any old or incorrect reporting on your credit score by contacting Equifax to have it removed. Some people also forget their credit cards have an annual fee and fail to pay them off too.

And if you’ve been given the advice to get a couple credit cards but lock them in a vault where they can only be accessed through a sorcerer’s spell, you’re going down the wrong path. It’s all about showing the lender you use them, so go buy a stick of gum and pay it off.

This cannot be stressed enough, if you want to keep or attain a good credit score, you have to pay your credit cards or tradelines on time regardless of whether you owe $1 or $1 million.

There is a tendency when things get really bad to consider declaring bankruptcy or a consumer proposal. A consumer proposal is a formal, legally binding process to pay creditors a percentage of what is owed to them.

You really want to avoid these two options. Instead, there are companies out there that will perform the same function and negotiate your debts, but it won’t impact your credit or carry the stigma of bankruptcy or a consumer proposal.

Lastly, if you already own a home and have some equity, but you’re still drowning in credit debt, consider refinancing your mortgage. Sure, you might not get the great rate you have now or you might get dinged for breaking your mortgage early, but using the equity in your home to get rid of high interest credit payments could keep more money in your pocket at the end of the day.

Angela Calla, Mortgage Expert, AMP of the Year in 2009 has been helping British Columbian families save money with the best mortgage strategy for over a decade from her Port Coquitlam office location. She is a regular contributor to national and regional media outlets and long-time host of The Mortgage Show on CKNW Saturdays at 7pm, and sits on many advisory boards for mortgage lenders & insures.

Having the support and guidance you need when making the largest purchase of your life is invaluable.  Listen and read Rosalia’s interview with Angela and Mannie of The Mortgage Show on CKNW.

1.      How did you hear about us?

I was looking for options as a new home buyer and I listen to CKNW everyday and thought I would give The Angela Calla Mortgage Team a call, I had nothing to lose and everything to gain. 

2.      What inspired you to call us?

When I started researching and talking with other people who have gone through the mortgage process The Angela Calla Mortgage Team always seemed to pop up and that solidified my comfort in calling her team.

3.      How was your experience?

I cannot tell you how nervous and scared I was about mortgages and trying to understand them! Angela’s Team was so understanding with all my questions and nervousness throughout the whole process. They basically held my hand throughout the whole process and with all the emails I had – there were many – and always got a quick and informative response. 

4.      How did it compare to consulting elsewhere prior to moving forward with us getting a mortgage?

I did consult with my bank to see if they had any deals for me since I have been banking with them my whole life. At first I thought they were looking out for my best interest and were going to give me the best deal possible. I was wrong about the banks, they were very against me going to a mortgage broker and said they they “would not be best for someone like me as a first time buyer”  The bank was trying to sell me other products and actually quoted me a .22% higher fixed rate than what I could get with Angela’s team. I am so happy that I chose The Angela Calla Mortgage Team to help me as they were very forthcoming and honest with information and encouraged me to inform myself, ask questions and to make the best decision for myself. 

5.      How much money did we save you and how will this help your current life stage?

The Angela Calla Team asked me about my future goals in home ownership, even though I am a first time buyer I have goals to purchase a bigger home in the next 3-5 years and we put a plan together to save my boyfriend’s first time buyer opportunity for our next purchase. This will save me thousands in the future for when we need the savings the most. 

6.      What advice would you have for others tuning into the program?

I have recommended The Angela Calla Team to other friends that I know who are also first time home buyers and currently have a mortgage, you have nothing to lose and everything to gain when dealing with them. Even if you are 6 months or a year away from buying, they can help you with the information that you need to be well informed with the mortgage process.They will also point out things that you would never think of, which is why they are the experts. 

Angela Calla has been a licensed Mortgage Broker for 14 years. She has been with Dominion Lending Centres since its inception in January 2006. Residing in Port Moody, British Columbia, Angela is a regular expert guest on several news stations, television shows, radio programs and local and national publications.  She was the AMP of the year in 2009, and has consistently been one of DLC and the industry’s top performers since 2006. She can be reached at callateam@dominionlending.ca  or 604-802-3983

Read the details of the budget here:  BC Budget 2018

The Angela Calla Mortgage Team will work with you personally to ensure you get the best mortgage options contact us directly at 604-802-3983 or callateam@dominionlending.ca it’s never too early or too late to start planning to position yourself best in the market.

Benefits of Home Ownership?

Pride of Home Ownership
Pride of home ownership is the number one reason why Canadians desire their own home. There is no landlord looking over your shoulder. You are able to make home improvements knowing that any appreciation that results, will be to your benefit. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.

Appreciation
In Canada, especially in the last few years, homes have appreciated considerably and in doing so have added substantially to owners net worth. Unlike stocks and bonds, you get to live in your real estate investment. Also, in Canada your principal residence is exempt from capital gains taxes.

Mortgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your home loan, which builds your equity. You can borrow against a home’s equity for a variety of reasons such as home improvement, sending your kids to university or college, or starting a new business. Why pay-off your landlord’s property when you can own your own?

Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they have can use, improve and sell. Their home is a safe haven for investment.

Are You Ready to Buy a Home?

First – do you have the financial resources? You should have five percent of the purchase price of a home for the down payment, but ideally even more. Are there other priorities in your life e.g. starting a new business, which require your savings? If not, buying a home should be on your radar.

Second – do you expect to stay in your new home for some time? Moving can be expensive and you will want to build some equity before having to relocate. Your job and home life should be stable.

What Can You Afford?

If you haven’t already gone through the mortgage pre-qualification process, you will need to meet with a mortgage broker- us at callateam@dominionlending.ca
We will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that they shop around for the best rate, terms and options to protect your credit score opposed to doing it on your own.

Our Mortgage Calculator will help you determine what monthly mortgage payment and the maximum mortgage you can manage. Note: if you are buying a condo, the amount of your monthly assessment has a direct impact on how much you can afford to spend on your mortgage.

First time homebuyers may want to take advantage of the federal government’s Home Buyers’ Plan. Under this plan, you may use up to $25,000 of your RRSP towards the purchase of a home. The money is tax-free as long as you pay it back in the next 15 years. Ask your Licensed Real Estate Agent for details.

Questions To Ask When Assessing Home Features
Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
Do you plan to have children? Downtown or suburbs? Proximity to recreation or work.
Do you need a substantial backyard? Pets?
Is there adequate storage space?
Will any remodeling be required to make the home move-in ready for you?
What service providers (cable, Internet, telephone, Satelite) are available in the area, and is the house completely wired for each? Can you hear me now – how good is the cell phone reception?
How much are the yearly property taxes?
How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
How old are the major appliances, and which are included with the house?
Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
Ever had problems with insects, such as termites and spiders, or rodents?
Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.

Location, Location, Location
How far will you be commuting and what is the traffic like? Factor in cost of fuel.
Where will your children attend school and how will they commute?
Are there recreational facilities and parks close by?
Are you close to family and friends?
Is safety or high crime an issue?
Is the property close to an obstacle or negative influence? (i.e. an apartment building, shopping centre, school, radio tower, power lines, LRT or railroad track, highway, airport or commercial project).
Access to schools, work, recreation, shopping centres, public transportation, cultural attractions, libraries, churches and hospitals
Adjacent undeveloped land – what is proposed for this or other green space?
Heavy traffic can be noise nuisance and hazard for children
Distance from the unit to amenities, parking, walkways, roads, public transit
Does the neighborhood reflect positively on the value of the condo and your lifestyle choice?
Does this neighborhood, for any reason, have a poor reputation?
Is the future economic climate for the area good? Are businesses moving in? Is there government investment?
Are people moving in or out of the neighborhood? What is their age, income level, family size?
Are there plans for this neighborhood that you may be unaware of (i.e. a future highway, a commercial development or a new housing development) that will provide competition on resale?

Noise and Privacy
Proximity to highways, driveways, parking lots, playgrounds, trains.
Proximity to elevators, garbage disposal, fire exits, heating and air conditioners.
How well is the building soundproofed.
Visit at different times/weekends to check noise levels and activity.

Home buying is an easy process when you are working with the right Real Estate agent. I’m here to help answer any questions you have an help walk you through the process with a free consultation.

Robert Boies Royal Le Page 604-341-3009
 

Questions on the best mortgage for you? Contact The Angela Calla Mortgage Team to help you personally 604-802-3983 callateam@dominionlending.ca

The Bank of Canada has raised it’s key lending rate .25% as we had projected it would in our previous email. This is the 3rd increase it has moved its benchmark rate from the once record lows last summer. Bank prime will follow to 3.45% (TD has a higher prime presently) The impact for borrowers is approx $13 per 100k in mortgage amount. If you have a mortgage rate of prme minus.50 this means your new rate will likely be 2.95%.

Here is the full release from this morning, and an articles to note.

https://www.bankofcanada.ca/2018/01/fad-press-release-2018-01-17/

http://www.cbc.ca/news/business/prime-interest-rate-increases-1.4201403

If you have any questions on reviewing your lock in optons or starting to secure your options for an upcoming renewal kindly contact us to help you 604-802-3983 or callateam@dominionlending.ca

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advice with choice. We are here to help you personally with your mortgage.