20 Jun

How to get a down payment for a purchase

General

Posted by: Angela Calla

We have seen a return of the buyers’ market and many people are asking, how long will this last? While some renters without a down payment might be asking, how can I put a plan in place to own?

With the cost of living so high, and student debts coming out of school, many consumers question how they’re going to come up with a down payment for a home

Here are some ways you can get it done:

1.  Decide how much you can save and pick a plan that works for you.

a) A 36-month plan saving $700/month will get you $25,200 (you will need about $2,000 for closing costs if you qualify as a first-time homebuyer)

b) A 24-month plan savings $600/month for $14,400

2. Get a gift from a family member

3.  Borrow the down payment or a portion (which may also help with credit building)

4.  A combination of all of the above

For those of you that want to partner with the government for a down payment and profit of home ownership, a new government program can be a helpful tool provided it stays past the October election. https://www.cmhc-schl.gc.ca/en/nhs/shared-equity-mortgage-provider-fund

You might be reading this and thinking, ‘yeah right, that is not reality.’ Or for some people, you know it might just be exactly what will help them move forward.

Perhaps you have graduated from school and your parents don’t charge you rent. Imagine if you could put one of your pay cheques every month aside and try living within those means and budget accordingly.

Or say you have a partner and one of you just started work in a specific trade and the other’s pay cheque went towards the “home purchase plan.”

Also, if you are within the qualifications to buy, you will be earning a combined household income of $125,000-plus per year, so taking those funds right from your pay cheque into your RRSP will have additional tax benefits too where you can use the refund for closing costs or amp up your down payment.

Here’s an example of how this worked for a lab technician and chef with a two-year old daughter.

They did a combination plan as they moved up to Canada from the U.S. two years ago, both got stable jobs and had no outside debt. They were paying $1700 a month rent. They used a $10,000 line of credit they took to put into investment to help establish Canadian credit. After getting the line of credit and placing it into a safe investment, they:

  1. Set up an RRSP and placed $600 a month on the loan and $700 a month into their RRSP
  2. Now this family is used to having a cash outlay of $3,000 per month which will be the actual expectation they have for when they buy a home
  3. With this plan, they take a mortgage for a test drive, save money on taxes, establish a great credit score and worked away toward their goal.

Are there holes in the plan? Yes, home prices may go up, there was interest on the loan they paid and they may have to adjust or modify their plan. Their employment can change, however, this practice will only benefit them no matter what life brings their way and there is a sense of empowerment when you have a plan and can see how you can get there.

Do you or someone you care about want to know how they can be set up with a multifaceted plan to help them move forward with a goal of owning a home?

Reach out today!

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

24 May

3 THINGS YOU MAY NOT KNOW ABOUT CASH-BACK MORTGAGES

General

Posted by: Angela Calla

About twice a year, one of the big Canadian banks likes to run an advertising campaign for their cash back mortgages. These are mortgages usually with 5 year terms where you receive a certain percentage back in cash. The percentage varies from 1% to 5% in most cases. You can use these funds to build a fence, landscape, buy window coverings etc. The idea is to be able to pay for some things that you would not be able to as you put all your money into the down payment and closing costs and need some help to get started.

  1. There are multiple lenders who have cash back mortgages. Don’t jump at the first one you see. They all have different terms and conditions.
  2. You are really getting a loan on top of your mortgage. The interest rate is calculated so that by the end of the term you will have paid the lender back the money they gave you and a little bit extra. Sometimes this little bit extra may be twice as much as you got in cash back.
  3. The average cash back mortgage is a 5 year term. Most Canadians move every 30 months. Therefore when you break a cash back mortgage you have to pay a penalty as per usual but you also have to pay back a portion of the loan that they gave you. If you are 36 months into a 60 month mortgage, you have to pay them back 2 years’ worth or 40% of the cash back. Combined with the penalty this can be a hefty sum. In addition, there are some lenders who require you to pay back 100% of the cash back if you want to break the term.

Before signing for a cash back mortgage it’s better to discuss your needs with your local Dominion Lending Centres mortgage professional. They can advise you on cash backs, line of credit, Purchase plus Improvements or Flex Down mortgages which may be better for your situation.

-David Cooke

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

9 May

GET TO KNOW TITLE INSURANCE

General

Posted by: Angela Calla

Are you officially Mortgage Free? CONGRATULATIONS! That is a monumental milestone to achieve!

With that significant accomplishment, you should look at obtaining a Title Insurance Policy. What most people don’t realize is that when you had a mortgage, the lender will likely have had this in place for you. Once your mortgage is paid out in full the insurance is no longer in place. It is crucial that once your final payment is made that you, as a home owner, now get a policy.

What is Title Insurance? Good question!

Title Insurance protects you, the homeowner. It’s not like traditional insurance in that it does not ONLY cover things that might happen, but it also covers things such as property defects that have already occurred in the past.

A title insurance homeowner policy will cover:

  • Forgery – If someone forges your signature on a registered document that entitles them to sell or mortgage your home.
  • Duty To Defend – If you experience title risk, the policy will cover the legal fees and costs associated with restoring and protecting your title.
  • Lack of Building Permits – Prior to purchasing the home, if there were renovations performed without the proper building permits you may be required to remove or fix the structure.
  • Fraud – If someone fraudulently transfers your property without your consent.
  • Encroachments – If a structure built by a previous owner is outside the property boundaries, or if a neighbour builds a structure that is on your property.

Title Insurance offers you peace of mind if anything should happen to your property once you are the owner. It is relatively low cost, on average coming in at $200-$400. It is a one-time purchase and does not need to be purchased each year. More than reasonable right?

If you are still on the fence about obtaining title insurance, we’ve recently had a client who experienced title fraud:

A woman went to her bank to make a payment on a line of credit that was secured by a mortgage on her property. When she arrived, she was told that her $30,000 line of credit had been paid in full and that according to the lawyer who sent the funds, her house had been sold.

This left her quite perplexed, so she followed up with the land registry office. They confirmed the sale of the property for $350,000 and that a new mortgage was registered on the property for $325,000. The woman was stunned to find out that she had been the victim of a title fraud scheme—and that the fraudsters had collected $350,000 on the deal.

Thankfully, in the above case the woman was covered by a Title Insurance Policy which fully covered all her legal fees to remove the mortgage from title and rightfully transfer it back to her. Having the coverage saved her approximately $12,000 in legal fees, time, and stress.

Your home is a sizable investment and one you worked hard to purchase! Title Insurance can protect you and your property should there be anything that comes up. For the $200-$400 it costs, we feel that’s a low-price tag for peace of mind. Ready to get a quote? Let us help you by contacting The Angela Calla Mortgage Team to set up your Title Insurance Policy!

-Geoff Lee

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

 

9 May

HOW TO IMPROVE YOUR CREDIT SCORE

General

Posted by: Angela Calla

When applying for any sort of loan, one of the most important metrics a lender is going to look at is your credit score.

But what really is a credit score, who keeps track of it, and most importantly, how can you improve yours?

There are a few simple ways to keep your credit score in good shape.

First off, prioritize paying your bills on time. Missing payments on your credit cards, lines of credit and so on, can have a very negative impact on your score.

You can spend an entire lifetime building up for good credit. All it takes is one mistake to negatively impact you.
Second, try to keep your credit cards at no more than 65% of their limit. This is the sweet spot that credit scorers are looking for.

Thirdly, you should avoid the “free credit score” services out there because they’re just looking to sell you credit, or sell your information to someone who does.

When you’re looking for credit, what they’re going to ask you is, ‘What are you looking for credit for?’ And you’re going to say, ‘Well, I’m looking to get a mortgage, or I’m looking to get a car loan.’ And then what they’re going to do is they’re going to sell your information to banks and mortgage brokers and people out there who are able to supply you with credit.

Instead, what you should do is go directly to the credit scoring companies. They’re required by law to give you your credit information directly, without affecting your score. TransUnion offers an online form. Equifax has multiple types of credit reports..

You also want to try to limit the number of credit inquiries by different lenders. When you’re shopping around at different banks, the number of inquiries can add up as each bank makes an inquiry to see what they can offer you.

But as a mortgage broker, we have access to multiple lenders all at once.

You could effectively come see a mortgage broker, get one inquiry done, and that inquiry is good for 20 financial institutions, as opposed to having to go directly to every bank. If you have any questions, contact The Angela Calla Mortgage Team today.

-Terry Kilakos

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

19 Mar

Today’s Underwhelming Budget

General

Posted by: Angela Calla

While many in the industry thought we might see increases to amortization or relief from the previously imposed stress test, none of those were taken into consideration in today’s underwhelming federal budget.

The announcements we saw in relation to home purchasers were:
RRSP’s
1. An increase to the amount accessible from RRSP’s from $25,000 (where it’s been for nearly a decade) to $35,000.
2. Easier access if a borrower has been through family crisis (looking forward to seeing more details on this).
Partnership program
1. Up to 10 per cent for Canadians earning less than $120,000 from CMHC for brand new construction (this is based on new home construction declining over the next 2 years)
2. 5% for resale homes
Example: If a first-time buyer wants to buy a home that costs $400,000, they’d have to come up with a $20,000 down payment, under both the new rules and the old ones.

Normally, they’d have to take out a loan for $380,000 to cover the rest of the purchase price — but under the new program (if it’s a newly constructed home), CMHC could kick in $40,000 toward the purchase price, in exchange for a 10 per cent stake in the home. That brings the buyer’s mortgage down to just $340,000 for the home, instead of $380,000. On a standard mortgage at 3.5 per cent interest, that translates into a monthly mortgage payment more than $200 lower than it would have been for the 25-year life of the loan. More clarity to come out in the fall, as no details were provided related to repayment terms and how the registration of the loan would take place. This area of the budget is far from clear.

Items to note:
• Provincially, B.C. had a similar program that had ended once the NDP were elected.
• In order to use the RRSPs, you still have to save it! Hard to do when most Canadians are feeling the burden of increased costs of living.
• RRSP’s still have to be paid back within 15 years

Here is an article further to today’s Budget
If you have any questions- We’re here to help.

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

6 Mar

ZERO DOWN PAYMENT MORTGAGE–DOES IT EXIST?

General

Posted by: Angela Calla

Did you know that you can buy a home with ZERO down payment?? If a home purchase is your goal this year but you aren’t able to save up enough of a down payment, you may qualify for a low or zero down payment mortgage. One of our Lenders is offering a great zero down program.

What is a Flex-Down Mortgage?
A Flex-Down Mortgage is a mortgage product that has a flexible down payment amount. There is still a down-payment required, but it will vary based on the property value.

-For a property valued under than or equal to $500,000, 5% down payment is required (sources available below)
-For a property valued at greater than $500,000 and less than $1 million –5% down payment is required up to $500,000 with an additional 10% down payment on the portion of the home value above $500,000.

Flex-down mortgages can only be on first mortgages, not second or third or used in refinance situations. As noted above, the total property value has to be less than $1 million. This type of mortgage will also have insurance included with it—the premium will be lesser of the premium as a % of the total new loan amount or the premium as a % of the top-up portion additional loan based on the rates at that time.

Those that choose to go with this type of mortgage product will have to meet requirements, just like any other mortgage. There are a few specifications with this product:

-You must show that you have standard income and employment verification papers
-A credit score of 650 or higher is highly recommended
-You must have no previous bankruptcies
-Some lenders may still require you to have some of the down payment from your own resources

Those considering this type of mortgage are recommended to have very little debt and be able to accommodate the additional cost of higher mortgage insurance (due to the higher risk to the lender on this type of mortgage). Typically, the insurance premium would be 0.2% higher on a flex down mortgage.

How it Works
You can borrow your 5% payment from a Line of Credit or even a credit card. This can then be used for your down payment. You have to disclose this to the Insurer and it will be on the application that goes to the Lender.

This is perfect for someone just getting into a new high paying job or for someone who is renting and can afford higher monthly payments but would take forever to save up the 5% down payment. This type of mortgage product can be an excellent option if you don’t quite have enough for the down payment. Are you interested in learning more about this mortgage product? Contact The Angela Calla Mortgage Team to show you how a Flex mortgage can make the home of your dreams happen sooner than you think!

-Geoff Lee

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

5 Mar

Insurance products when you own a home

General

Posted by: Angela Calla

When it comes to your home, big or small, be prepared to be bombarded by a number of insurance products to keep you protected. While it can seem overwhelming, it’s a good idea to get familiar with the basics of some of the insurance you will either need to have, or choose as an optional.

Title Insurance: Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership. It is not a requirement in many parts of Canada, but don’t dismiss it outright.

Title Insurance can protect you from existing liens on the property’s title, but it’s most common use is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him/herself, without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. Title Insurance is a one-time fee or premium with the cost based on the value of your property. You can purchase title insurance through your lawyer or title insurance company like First Canadian Title Company.

Mortgage Protection Insurance: Just before you sign off on your mortgage, your broker is required to tell you about mortgage protection insurance. While this insurance is also optional, don’t dismiss it outright. Almost every broker has a story of someone who passed on the extra coverage and tragedy hit. The majority of people skip over getting mortgage insurance for two reasons: they don’t want to spend the money, or they already have some type of life insurance policy through work.

But if you have spouse and kids, you need to think about whether they can carry on with the mortgage payment. If they can’t they’ll be forced to sell. For a few dollars a month extra, it may not be a bad idea.

There are also a number of different policies that could work for your budget. Manulife’s Mortgage Protection Plan offers you immediate insurance and can be canceled at any given time.

While you think you may be covered through your work, you need to take a closer look at the policy.

Mortgage insurance is a debt replacement while life insurance is an income replacement. You need to understand the difference. You also need to see just how much you’re going to get through your life insurance policy. Unless you’re a police office or firefighter, you may end up being surprised just how little you end up with at the end of the day.

Property/fire insurance: Before you close on your home, your lender is going to require you have home insurance. While there are different types of coverage, home insurance generally covers you from damage to the home that is accidental or unexpected like a fire. It can also cover the contents of the home depending on your insurance package. If you’re buying a condo or a strata, you’re also going to need similar condo insurance that covers you for your unit.

Consider this: Just because you have home insurance doesn’t mean you’re covered in the event of a flood or earthquake. Depending on where you live, you may need to purchase additional coverage to be protected from a natural disaster. It’s best to talk to your insurance provider to make sure you’ve got the coverage you need.

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

5 Mar

Going through a divorce doesn’t mean you have to split from your home

General

Posted by: Angela Calla

When we tie the knot with our soulmate, we assume it’s going to be forever. It’s pretty much written in the vows. Unfortunately not all marriages have fairytale endings. In fact, a very significant amount of marriages in Canada end in divorce. The most recent data suggests 38 per cent of all marriages in Canada don’t last until death. The average marriage lasts 14 years, with 42 per cent of divorces occurring in marriages lasting between 10 and 24 years.

The reasons for the divorce rate are many and complicated and not really necessary to discuss here.

What we do know is, divorces can get ugly and be costly for both individuals involved. And if the marriage is years old, there’s likely a home or property that gets caught in the middle.

A typical divorce scenario sees that when the couple breaks up, the matrimonial home is sold and what’s left over is split. In almost all cases, even when one party wants to keep the home, the lawyers, the banks and the professionals always suggest selling the home. It makes sense, since most couples get a mortgage they can afford together, not on their own. But if the home is full of memories, or children are involved, it can be an extremely painful situation.

There is a unique alternative very few professionals even know exists.

All three of Canada’s mortgage insurance providers, Canada Mortgage and Housing Corporation, Genworth Financial and Canada Guaranty, offer what’s called a spousal buyout program.

This program allows one party to refinance the matrimonial home up to 95 per cent of its appraised value, and pay out any debts related to the marriage.

Traditionally, you can only refinance on an existing mortgage up to 80 per cent of the appraised value.

The program is considered a purchase, so all the requirements and qualifications needed in a traditional mortgage still apply. In this case, you’ll also need a purchase agreement and a separation agreement with all the debts and payments spelled out.

The spousal buyout program is a one-time opportunity. It can be used to pay off other debts outside the separation agreement, but it depends on which one of the three insurers you use.

Even with a helpful loan-to-value ratio, some people still can’t afford to take on the home on their own. The program also allows people to bring on a cosigner, often a new partner or family member.

At the end of the day, divorce is unfortunate. The programs allows you to keep your home and your kids can stay where they’ve grown up. And that makes the situation at least somewhat more bearable.

If you do find yourself in a divorce and you’re not sure what to do about your home, contact The Angela Calla Mortgage Team before making any decisions. We can help you!

The best mortgage plan is one that is developed by assessing your goals and life stage. The Angela Calla Mortgage Team will help you personally. Call us at 604-802-3983 or email callateam@dominionlending.ca.

5 Mar

Welcome Back, Buyer’s Market!

General

Posted by: Angela Calla

Homebuyers are starting to see relief and the pendulum swing their way for the first time in years.

It’s no surprise, as we’ve have had a collision of circumstances that have both slowed the local real estate market and dropped prices down as much as 30 per cent.

We have the stress test forcing borrowers to qualify at two per cent higher, a speculation tax in B.C. and raised interest rates from record lows.

We had a seller’s market with less than four months of supply on the market, then four to six months of a balanced market and now a buyer’s market, where we have over nine months of product on the market.

With all of the supply available, sellers are having to set their price below the last sale if they are serious about selling.

Buyers are winning now, but for how long?

On March 19, we will see if there will be any changes in the federal budget. There have been rumours of a modification to the stress test by a percentage point and perhaps a 30-year mortgage option back for insured mortgages. Now with spring here and bank profits down from the normal increases due to less lending, we’ve seen a decrease in both the fixed and variable rates.

Watch the numbers once the housing supply drops to four months, and remember every neighbourhood is different.

If you have any questions, I’m here to help you and the people you care most about.

Angela Calla is a 15 year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from a sales will help build a new emergency room at Eagle Ridge Hospital. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

26 Feb

The Mortgage Code is now on Audible!

General

Posted by: Angela Calla


I just wanted to provide an update on a special project that’s been an exciting journey for me.

Last fall, my first book The Mortgage Code became a best seller on Amazon in four categories, both in Canada and the U.S.

An audible version of The Mortgage Code is available today. It’s an easy way to get all the information you need from my bestselling book.

As a mortgage professional for 15 years, I’ve helped bring clarity to Canadians seeking a mortgage, and The Mortgage Code will do the same.

In a fluctuating and uncertain market, it’s the perfect time for a book like this to help homebuyers understand the mortgage process, save money and make the right mortgage decisions.

While being a consumer advocate has been a passion of mine since the beginning, so has giving back to the community in which I live. That’s what makes The Mortgage Code such an exciting project. All proceeds from the sale of the book this year will go to the Eagle Ridge Hospital Foundation. The EHRF does amazing work raising funds for much needed equipment for Eagle Ridge Hospital in Port Moody. I’m proud to partner with such an amazing organization.

If you’d like to chat more about The Mortgage Code please feel free to contact me anytime.

In Canada, click The Mortgage Code to download today!
In the U.S., click The Mortgage Code to download today!