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CMHC Increase Premiums as of March 2017
General Angela Calla 17 Jan
General Angela Calla 17 Jan
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General Angela Calla 10 Jan
It’s official.
The B.C. government has announced a hefty increase for the homes owners grant threshold to match the large increase in property assessments in Metro Vancouver
Finance Minister Mike de Jong says the Homeowners Grant is being increased from $1.2-million to $1.6-million, an increase of 33% from last year.
See the full story here: http://www.cknw.com/2017/01/09/homeowner-grant-threshold-will-go-up/
What to understand how to use your increased property assesment to your advantage? COnsolidate your debts into your mortgage
Ccntact us directly to help you at 604-802-3983 or callateam@dominionlending.ca
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. She can be reached directly to help you.
General Angela Calla 9 Jan
Your Credit Score that the lenders use, not to be mistaken by the Credit Risk Score you see when you check your own credit, is one aspect of determining your borrowing power. The better your score, the length of established credit and your payment history the better when it comes to mortgage financing.
Let’s assume that all parts of an application are equal (available down payment, income, monthly liability payments etc.) except for the Credit Score. Established credit in this case would be any credit report that has at least 2 accounts reporting with a limit of $2,000 for 2 Years.
Comparing the credit profiles of Jane and John both who make a gross annual income of $50,000 the following would apply:
First Gross Debt Service Ratio (GDS) is the combined shelter expenses (heat, property tax, half of condo fees & mortgage payment) in relation to the borrowers gross income. And Total Debt Service Ratio (TDS) is the GDS plus all other monthly debt liabilities in relation to the borrowers gross income.
Jane has a Credit Score over 680
John has a Credit Score between 600-679
Each year Jane may allocate $19,500 towards GDS and $22,000 towards TDS.
And each year John may allocate $17,500 towards GDS and $21,000 towards TDS.
Lets assume heat and property tax combined are $300/month. This means that Jane with her excellent credit can allocate $1,325 towards her mortgage payment and John can allocate $1,158 toward his mortgage payment.
Using the current Benchmark Qualifying Rate of 4.64% to qualify Jane may qualify for a mortgage of $236,066 and John may qualify for a mortgage of $206,313, a difference of$29,735.
As you can see there is quite the difference in mortgage amounts allowed under each credit rating. If you’re thinking of buying it’s best to consult a Dominion Lending Centres mortgage broker who will check your credit, help you determine your maximum mortgage amounts and if necessary help you make credit decisions that may improve your credit score and buying power.
The Angela Calla Mortgage Team is here to help you personally contact us today at 604-802-3983 or callateam@dominionlending.ca
General Angela Calla 6 Jan
Life can definitely throw some challenging financial situations your way.
As independent mortgage professionals, we can provide solutions and
strategies during or after these challenging times in order to get you back
on track. We have access to banks, trust companies and mortgage companies
that specialize in this transitional period to help you move forward with
the best mortgage plan for you. We protect your credit by negotiating with
multiple lenders to find a solution for you. The best part of all is that
our service is free!
If you have never owned a home and have had a consumer proposal, the good
news is that you are already accustomed to the discipline of saving money
every month. Should you choose to continue to grow your savings, those
funds can then be put toward a down payment and re-establishing credit.
If you own a home already, there are lenders that will help you refinance and pay out your proposal
earlier in order to accelerate your transition period.
After bankruptcy, different lenders will issue mortgages based on the amount
of time since you were discharged, the amount of down payment on a purchase
and/or the current equity in your home if your already own. Lenders then
price their rates based on these aspects of your application. We look
forward to learning about your journey while protecting your credit and
guiding you through the best strategy on a moving forward basis.
The Angela Calla Mortgage Team is here to help you personally with your mortgage questions 604-802-3983 and callateam@dominionlending.ca
General Angela Calla 28 Dec
Lender Update December 22, 2016
Subject: BC HOME Partnership Program On December 15, 2016, the BC government announced a new initiative to assist eligible first-time homebuyers.
The BC Home Owner Mortgage and Equity (HOME) Partnership program provides repayable loans, to be secured by a second mortgage, up to a maximum 5% (capped at $37,500) of the purchase price.
The HOME Partnership program eligibility criteria and application process can be found on the BC Housing website: https://homeownerservices.bchousing.org/housing-assistance/bc-homepartnership.html
Genworth Canada will provide mortgage insurance for borrower(s) eligible under the HOME Partnership program, applications for mortgage insurance are to be submitted as follows:
Mortgages must be submitted as “Borrowed Down Payment” product. Product specific underwriting criteria can be found on the Genworth website: http://genworth.ca/en/products/borrowed-down-payment-program.aspx ï‚· The “Borrowed Down Payment” mortgage insurance premium rates are as follows:
LTV Premium Rate
90.01-95% 3.85%
85.01-90%* 3.60%
80.01-85%* 1.80%
* for 80.01-90% LTV, borrowed down payment must not exceed 5% of the property value. ï‚· For all applications received where a portion of the down payment is from the HOME Partnership program, repayment of the HOME Partnership loan must be included in the total debt service ratio by including the loan payment in the ‘other obligations’.
The Bank of Canada benchmark rate for the interest rate of the loan and a 20-year amortization period must be applied to determine the monthly loan payment. ï‚·
The Lender will be required to ensure the appropriate documentation is retained on file to confirm that the borrower(s) were approved under the HOME Partnership program.
Questions on getting pre approved for a mortgage? Contact The Angela Calla Mortgage Team directly at 604-802-3983 or callateam@dominionlending.ca
General Angela Calla 22 Dec
There are great advantages to having business for self. There are many extremely successful business owners that live great lifestyles but don’t have to pay for medical, all because they have great tax write-offs that bring their income down to a low tax bracket. The other side of this is that these great benefits actually make these same business owners work hard to qualify for a mortgage, all because their income is significantly reduced on paper. These business owners know that there is advanced planning involved in being able to qualify for conventional financing.
According to Statistics Canada, in 2015 there were about 2.7 million people self-employed in Canada which is about 14% of the total population of the country. These statistics reflect people that are continuing on in maintaining a significant lifestyle financed by self-employment and being able to be counted as such. In other words, being self-employed is a viable way of making income. It just doesn’t fit very well in the conventional lending “box”.
In order to fit in the conventional lending “box”, there is a measure that lenders require that each mortgagee(s) (the person(s) applying for the mortgage) must meet. Some of the documents that self-employed have to provide for the lender are two most recent years of tax returns that don’t always accurately reflect the actual take-home that a self-employed person has. Tax deductions related to business often reflect meals to rental space to credit card interest, etc. The result is that the income the self-employed business owner shows on their tax return is a significantly lower figure than what they actually take home. However, the “box” requires that tax returns show the required income to justify the mortgage.
So, how does one show enough income when they are self-employed? The following points are suggestions on strategies on how to plan ahead and be prepared when you, as someone who is self-employed, are ready to move forward in arranging a mortgage for property purchase.
Being self-employed does not mean that you have to show enough income on your T1 General in order to qualify for a mortgage. There are many factors involved in showing income when you are self-employed. And every lender has different guidelines as to how they view self-employment. If you are self-employed, plan accordingly and make sure you are well set up to show that the lender that you are a desirable candidate for a mortgage.
General Angela Calla 20 Dec
Premier Christy Clark and Minister Responsible for Housing, Rich Coleman announced on the 15th of December that the B.C. Home Owner Mortgage and Equity Partnership program will initiate a bold, innovative new program for helping first time home buyers afford the homes they desire.
We’ve reached out to our friend Angela Calla, expert mortgage broker and leader of the Angela Calla Mortgage Team, for an analysis of this new program, for an explanation of the requirements and for a prediction on the outcome. Her insights below are likely to bring clarity to the issue.
Full Article here: http://www.point2homes.com/news/canada-real-estate/new-opportunity-bc-first-time-home-buyers.html
Angela Calla has been a licensed mortgage broker for 12 years – since she was 22 years old. 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 604-802-3983
General Angela Calla 15 Dec
The Angela Calla Mortgage Team saved Margaret of Surrey and her husband $3000.00 per month by restructuring her mortgage at renewal. Her mortgage was up for renewal at the bank where they encouraged her just to renew directly, however it did not address her current life stage of her outside debt including credit cards and lines of credit that have been accumulated due to helping her adult children with school, and now there businesses.
Thank goodness she did not renew directly with the bank. That costly mistake would have costed her $36,000.00 per year where now she is saving that money by contacting The Angela Calla Mortgage Team. Feeling discouraged she happed to tune into The Mortgage Show one day while she was cleaning the house and decided to give us a call.
We were able to consolidate her outside debts not only saving her $3000.00 per month but helping her save money each month and pay down her mortgage at a highly accelerated rate. She had used a mortgage broker before but they had never reached out to her to help her with renewal. As a result of her contacting us we quickly helped her with the new mortgage and she will now be a part of our mortgage management program included with every mortgage we do so we will review her mortgage every year to ensure she has the best mortgage at all times. Hear her share her story live
Here is Margaret’s interview …
https://soundcloud.com/cknw/margaret-interview-121516-edit
Contact The Angela Calla Mortgage Team directly to help you with your mortgage or someone you care about at callateam@dominionlending.ca or 604-802-3983
General Angela Calla 15 Dec
Announced today by Premier Christy Clark and Minister Responsible for Housing, Rich Coleman, ‘the B.C. Home Owner Mortgage and Equity Partnership program contributes to the amount first-time homebuyers have already saved for their down payment, providing up to $37,500, or up to 5% of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years. Through the program, the Province is investing about $703 million over the next three years to help an estimated 42,000 B.C. households enter the market for the first time.’
This program not only helps first-time home buyers enter the market, but it can also help them save on interest by providing buyers with a larger down payment than they already have. The Province will contribute towards the buyers’ contributions up to five per cent of the home purchase price, meaning first-time buyers can exceed the minimum down payment required by the Canada Mortgage and Housing Corporation.
For example, a home valued at $750,000 requires a minimum down payment of $50,000. With contributions from this program, a first-time homebuyer can put $90,000 down and, assuming a three per cent interest rate, will save approximately $5,200 in interest during the first five years.
In a move to help BC citizens and residents buy their first home, the BC government announced today that it is launching a new program to augment down payments for first-time buyers. The B.C. Home Owner Mortgage and Equity Partnership program contributes to the amount first-time homebuyers have already saved for their down payment, providing up to $37,500, or up to 5% of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years. Through the program, the Province is investing about $703 million over the next three years to help an estimated 42,000 B.C. households enter the market for the first time. For more examples view here: http://www.angelacalla.ca/blog_post?id=18426
During the first five years, no monthly interest or principal payments are required as long as the home remains the homebuyer’s principal residence. After the first five years, homebuyers begin making monthly payments at current interest rates. Homebuyers will repay the loan over the remaining 20 years, but may make extra payments or repay it in full at any time without penalty. The loan must be repaid in full when the home is sold or transferred to another owner.
To be eligible, buyers must be preapproved for an insured high-ratio first mortgage (mortgage down payment is less than 20% of the home price). On completion of the sale, program funds will be advanced and the loan will be registered as a second mortgage on the property’s title.1Íž
Applications will be accepted starting January 16, 2017. This will be a three-year program with loans advanced from February 15, 2017 until March 31, 2020. https://news.gov.bc.ca/files/Housing_Campaign_HOME.pdf (this is a PDF of the process)
Eligible homebuyers
All individuals with a registered interest on title must reside in the home and:
• Be a first-time homebuyer
• Have been a Canadian citizen or permanent resident for at least five years
• Have resided in BC for at least 12 months
• Have a combined gross income of $150,000 or less
• Have saved at least half of the minimum down payment they will require
• Must be pre-approved for the first mortgage before applying
The first mortgage must be high-ratio insured from an NHA approved lender for more than 80% of the purchase price.
Eligible Properties
Any legal, self-contained, mortgageable residence located in BC
• Must be used as a principal residence for the first 5 years
• Rental properties and seasonal or recreational properties are not eligible
• The purchase price cannot exceed $750,000
Home Partnership Loans
• Up to 25-year term, registered as a second mortgage
• No interest or principal payments for the first 5 years
• Monthly principal and interest payments begin in year 6, amortized over remaining 20 years
• Interest rate for years 6 to 10 set near first mortgage rate at time mortgage is registered
• Interest rate reset to near first mortgage rate at years 10, 15, and 20
• Homeowner may repay in full or part at any time without penalty.
The loan is due and payable in full upon
• The home ceasing to be the primary resident in the first 5 years
• Default on the first mortgage
• Sale of home or change of ownership
• Any other default on the Home Partnership second mortgage
Bottom Line: This is a bold and innovative step to help potential new buyers to meet the greatest hurdle of first-time homeownership—the down payment. The Federal Government’s new mortgage regulations released in October hit first-time homebuyers hard, so this program will be welcome relief for B.C. residents. The B.C. government estimates that it will make more than 42,000 new loans over the three-year life of this program, amounting to $703 million in new funding available for qualified first-time homebuyers to come up with their down payments. This is particularly important for BC, which has the highest home prices in Canada.
Items of note:
Although this program is available, some homeowners may choose not to take it, as it is a loan that does have to be paid back, and we will not know what that rate of interest will be at the time of repayment.
With it being registered as a second mortgage no other loans can be registered against the property.
This does not address the supply issue and if anything will drive prices higher.
This is our taxpayers money that is being used to fund this.
The mortgage insurers (CMHC, Genworth and Canada Guarentee) have yet to comment on the program
The Angela Calla Mortgage Team is here to help you personally with clarity on any mortgage related matter, contact us at callateam@dominionlending.ca 604-802-3983
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”.
Reach my Team Johnny Hsu & Dave Holmes at 604-939-8777 & callateam2@dominionlending.ca
General Angela Calla 15 Dec
https://news.gov.bc.ca/releases/2016PREM0153-002759
Example #1: Home purchase price – $475,000
This first-time buyer has saved $11,875 towards their down payment, or 2.5% of the home’s purchase price. Through the progam, the Province will contribute $11,875, equal to the buyer’s 2.5% down payment. This brings the total down payment to $23,750 or 5% of the home’s purchase price, as required by Canada Mortgage and Housing Corporation. This loan is interest and payment-free for the first five years.
As a first-time buyer, this person can also qualify for the First Time Home Buyer’s exemption for the Property Transfer Tax, saving: $7,500.
The B.C. HOME Partnership program enabled this buyer to purchase their first home as this buyer did not have the minimum down payment saved to qualify for an insured first mortgage.
Example #2: Home purchase price – $600,000
This first-time buyer has saved 5% of the home’s purchase price towards their down payment, or $30,000. Canada Mortgage and Housing Corporation requires a 5% down payment for the first $500,000, and 10% for the remaining portion. This means the minimum down payment required for a home valued at $600,000 is $35,000. This loan is interest and payment-free for the first five years.
If this is a newly built home, the buyer can also qualify for the Newly Built Home Exemption for the Property Transfer Tax, saving: $10,000.
The B.C. HOME Partnership program will meet this buyer’s contribution of $30,000, bringing their total down payment to $60,000, and enabling this buyer to purchase their first home as they had not yet saved the minimum down payment required to qualify for a insured first mortgage.
Example #3: Home purchase price – $750,000
The first-time buyer in this example has saved 7% of the home’s purchase price as a down payment, or $52,500.
Canada Mortgage and Housing Corporation requires a 5% down payment for the first $500,000, and 10% for the remaining portion. This means the minimum down payment required for a home valued at $750,000 is $50,000.
The Province will meet the buyer’s contribution up to 5% of the home’s purchase price. In this example, the program will contribute $37,500 towards the down payment, allowing this buyer to put a total of $90,000 towards the down payment of their first home.
Assuming a 3% interest rate, this buyer will save $5,201 in interest payments during the first five years of their mortgage compared to if the buyer had purchased the home without the program.
In addition, if this is a newly built home, the buyer can also qualify for the Newly Built Home Exemption for the Property Transfer Tax, saving: $13,000.
Example #4 With Payment example
As an example, a first-time buyer of a $500,000 property puts down 5% ($25,000), with $12,500 coming from the buyer’s own funds and $12,500 from the BC Home Partnership Program. The structure of the financing would be as follows (assuming a current rate of 2.90%): $500,000 Purchase Price $ 25,000 Down Payment $475,000 Base Mortgage Required
$ 18,287.50 Non Traditional CMHC Premium (3.85%) $493,287.50 Net 1st Mortgage $12,500.00 Net 2nd Mortgage the repayment costs under would be:
|
1st mortgage at 2.9% |
2nd mortgage at 3.4% |
Total Monthly payments |
Years 1 to 5 |
$2,304 |
$ 0 |
$2,304 |
Years 6 to 10 |
$2,304 |
$ 72 |
$2,376 |
The Angela Calla Mortgage Team is here to help you personally contact us directly at 604-802-3983