See how #AngelaCallateam helped a young couple from #Langley get the keys to their #firsthome 

Angela makes the top story on www.canadianmortgagetrends.com, Click Here to view a direct link to her article on Canadian mortgages trends-posted rates penalties pain!

One of the many important considerations to understand when sourcing the best mortgage is how different types of lenders – namely, banks versus lenders who only work with mortgage brokers – calculate penalties, as the market and your needs can easily shift throughout the term of your mortgage.

Does the lender charge a reinvestment fee as well?

Do they have hidden clauses about firm sales?

Do they charge a premium on top of the interest rate differential (IRD)?  

Below are two examples of how different lenders are calculating penalties. Which one would save you the most amount of money not only when you first get a mortgage, but also if you need to make a change?

Understanding the different available options and the terms lenders use to make more money from borrowers are some key differentiators that borrowers will benefit from only when working with mortgage brokers.

My first consideration when placing a mortgage is to look at lenders who don’t use posted rates!

I know that some lenders charge a high penalty – even when the mortgage term is almost over – as a retention tool leveraged to keep more mortgages on their books!

Following are two quick penalty calculators that compare typical banks versus broker lenders.

Penalty Calculator #1 – Broker Lender (applicable when not opting for a replacement mortgage)

 As you can see, there is quite a difference in the penalty amounts – $4,880.05. And this is a modest calculation comparison. Penalties can be tens of thousands of dollars higher depending on the lender’s specific calculation formula and how far into the mortgage term a borrower is at the time of breaking the mortgage.

 Another hefty cost can come in the form of additional clauses borrowers are usually unaware of if they deal with the lender. These include an additional 1-3% fee in above and beyond the IRD to pay out early.

 Imagine adding another $6,870.00 to the $8,238.72 for a total of $15,108.72 in penalties. This is certainly an amount that could potentially shut out moving as an option for many borrowers, as this amount is enough to eat up real estate commission and an extra bedroom in a home, to say the least.

 Some lenders may have a sale only clause in their mortgage as well. If you think, “Oh, that’s no big deal. I don’t plan on selling,” think again. Throughout every path in life, there are moving parts and uncertainties. When you get married, do you plan for a divorce? Likely not. Did you predict the company you were with for 20 years could downsize or your pension would be reduced or cut? Can you guarantee your health will never throw you a curve ball?

We all hope none of the above scenarios happen to us, but they can. And if they do, having options is extremely important.

You also have to consider that if the interest rate market changes 0.5-0.8% there are opportunities to optimize your mortgage to your advantage, but only if you have the most cost-effective mortgage in the first place, which, clearly, is not based on just your interest rate anymore.

Angela Calla, Mortgage Expert, AMP of the Year in 2009 and Host of The Mortgage Show on CKNW Saturday’s at 7pm. One of the most influential people in the mortgage industry for her sheer volume of people she helps save money on their mortgage, contributions she makes by consulting with Canadian’s national & regional lenders, insurers and media contributions. She and her Port Coquitlam, Port Moody & Vancouver team are here to help you personally at 604-802-3983 or callateam@dominionlending.ca

In hot real estate markets, it’s common for both buyers and agents to consider having no subject to financing when making a purchase offer.

It’s important to realize, however, that no professional is in a position to legally advise you to enter into a real estate transaction with no subjects, especially no subject to financing.

This is a personal choice that you must carefully consider. Understanding the risks involved will help you make an informed decision.

 Keep these three points in mind when making the choice with which you will be most comfortable:

 1. Regardless of whether you have secured a rate hold/preapproval, the lender has the right at any time to decline the property. This can occur for a number of reasons including, but not limited to: value, condition, wiring, tanks, strata documents, zoning, work completed without permits, full fix completed without proper documentation, rental components or remaining economic life. Lenders only review property details once an accepted offer is in place – not when you’re simply considering making an offer or during the time you’re going back and forth as part of the negotiating process. They then review the contract, PDS and anything else accordingly.

 2. Even if a lender has approved you based on credit and income, if your scenario has since changed and they request further documentation (eg, you haven’t received enough overtime, you spent more on your credit cards, your employment/credit has changed or there was something you may have forgotten to disclose), they have the right to alter or cancel the approval. All lenders only do a full review of your credit and income once you have an accepted offer in place. They only view an application for rate hold or preapproval purposes and verify once an accepted offer is in place with the right reserved to disregard the preapp or even an approval at any time for the above reasons while doing their due diligence right up until closing.

 3. Who is in the best position to go into a purchase with no subjects? Borrowers who:

– Are overqualified for the purchase

– Can afford a higher payment if the original plan doesn’t work out with any of the above points

– Have their own cash (not a gift pending qualifications) far in excess of what was intended

– Have income that far surpasses what is required

 As AMPs, it’s our responsibility/fiduciary duty to be honest and transparent, and give you the power of choice with clarity on all the considerations to anticipate scenarios that may arise, so you can make the best choices for your family. It would be much easier to be a yes person and cross our fingers that none of this comes up, but it’s not how a professional should guide you, as you come to trust in our clarity, knowledge and experience. When you have this expertise coupled with the right real estate agent, they too will ensure you take the emotion out of the purchase, and protect you accordingly with subjects you’re comfortable with for your personal circumstances so your choice is calculated, clear and comfortable long term.

Angela Calla, Mortgage Expert, AMP of the Year in 2009 and Host of The Mortgage Show on CKNW Saturday’s at 7pm. One of the most influential people in the mortgage industry for her sheer volume of people she helps save money on their mortgage, contributions she makes by consulting with Canadian’s national & regional lenders, insurers and media contributions. She and her Port Coquitlam, Port Moody & Vancouver team are here to help you personally at 604-802-3983 or callateam@dominionlending.ca

April sure has been a very busy month!

We have seen a substantial increase in the amount of purchases and increased insurance premiums were announced for when you have less than a 10% down payment.

This raises the question:  with all of the news about unaffordability, how can I or my loved ones possibly buy a home?

We are here to help you gain clarity, not speculation or “averages”, on what is actually applicable to you.

I have included 3 points of reference that you may find helpful:

1. Earlier this month I conducted a 7 minute interview on a local radio station 98.7 FM in addition to the regular Mortgage Show on CKNW to break down what it takes to own a home.  Listen here: https://www.youtube.com/watch?v=9U901l3sON4&feature=em-upload_owner

2. Hear it from a recent client named Rob that we helped.  Llisten/watch here:  https://www.youtube.com/watch?v=0WsCxtgIWzY

3. The mortgage insurers also increased premiums for lower down payment borrowers. Nothing of significant impact but still a notable $6/month for a 250k mortgage.  The other insurers have followed suit.   Read more here: http://www.cmhc.ca/en/corp/nero/nere/2015/2015-04-02-1605.cfm

The premiums are still lower today than they were just a decade ago when there was only one option for mortgage insurance (CMHC).

Part of living in any home is adjusting your budget accordingly to potential increased future expenses.  We can help you consider these changes when putting together a custom mortgage plan for you.

We are here to help you and those you care most about to gain the clarity required in having the best mortgage plan – contact us to help personally at 604-802-3983 or callateam@dominionlending.ca

Angela Calla, AMP

Dominion Lending Centres

DLC-Angela Calla

Click HERE and listen to Angella Calla debunking one of the most common myths of purchasing a home and breaking down how many AFFORDABLE options are available

https://youtu.be/9U901l3sON4