Is the BC HOME Partnership Program Right For You? Courtesy of DLC associate Pam Pinkert 

The BC HOME Partnership Program was created for first time home buyers who have good credit and good income but do not meet the requirements for a minimum 5 percent down payment.  With at least 2.5% down payment the BC Home Partnership Program will allow you to purchase your home sooner than waiting to save the full 5% minimum down payment.

As a home buyer you can take full advantage of the program by paying back the loan amount within the first 5 years during the interest free period.  Between the 6-10 year time frame the interest rate is preset to 3.2% (current Prime rate of 2.7% plus .5%).

First step —get a pre-approval from your Dominion Lending Centres mortgage broker.

If you meet the eligibility requirements and have 2.5% for a down payment is the BC HOME Partnership Program right for you? 

The answer is “Yes”. Here’s why.

For example, consider a purchase price of $400,000 with total 5% down of $20,000.

The 2.5% loan portion from the BC HOME Partnership Program is interest and payment free for the first 5 years.  Then in year 6 payments based on 3.2% and 20 year amortization would be payable at $56 per month. In year 11-15 the rate would be reset based on the Prime lending rate plus .5% at the time.

For those home buyers with at least 5% down payment of their own funds is the BC HOME Partnership Program right for you?

The answer is “Yes”. Here’s Why.

For example, consider a purchase price of $400,000 with total 5% down of $20,000 and no money from the BC HOME Partnership Program.

The difference in using 5% of your own money versus 2.5% of your own money and 5% from the BC HOME Partnership Program will cost you $950 more in the mortgage insurance premium (rolled into your mortgage) and $2 per month more for your mortgage payment.

If you prefer to keep some of your down payment funds and take advantage of the BC HOME Partnership Program, after 5 years if you have not paid off the BC HOME Partnership loan you would have that additional payment of $56 per month. The overall cost of the mortgage and loan payments over the life of the mortgage would result in $1,080 more in interest by taking advantage of the program instead of using all of your own funds for down payment.

Note – the rates used for the first mortgage and the loan for down payment have been kept the same for this example for comparison only.  Rates are subject to change at the end of each term.

For those home buyers with 10% down payment of their own funds is the BC HOME Partnership Program right for you?

The answer is “Yes”. Here’s Why.

Consider a purchase price of $400,000 with total 10% down of $40,000 (5% from own resources and 5% from the BC Home Partnership Program).

The difference in using 5% of your own money and 5% from the BC Home Buyer Program versus 10% of your own money is $720 less in the insurance premium (as you have a larger down payment) and $148 per month less for your mortgage payment.  After 5 years if you have not paid off the BC HOME Partnership loan you would have that additional payment of $112 per month.  If you continue with the loan throughout the life of the mortgage the net overall savings in interest is $5,000.

The BC HOME Partnership Program provides a cost effective options for first-time home-buyers.

Your down payment portion can come from savings including RRSP or gifted money from a family member.

Note – the rates used for the first mortgage and the loan for down payment have been kept the same for this example for comparison only.  Rates are subject to change at the end of each term.

These are only an example of the options for you as a first-time buyer and subject to income, credit and residency qualification. 

To ensure you are clear about the opportunity for your specific situation contact your mortgage broker.

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

Hear Kim of #mapleridge & her family of 6 share how Angela Calla Mortgage Team saved them over $1,200.00 dollars each month by redoing their #mortgage. Their future is much brighter now. 4 teenagers & running a business & still doing charity work for others in there community & abroad. Such an amazing family, an honour to help #wehaveamortgageforthat News Talk 980 CKNW’s The Mortgage Show Listen here: https://soundcloud.com/cknw/kim-interview-102116-edit Contact us to help you directly with your mortgage callateam@dominionlending.ca 604-802-3983 Who do you knwo with a mortgage renewal coming up?

Hear from Sean & Lynn of #langley we helped save $800/month by redoing their mortgage. We helped them buy their 1st home. A wedding & 2 kids later & a few years, that savings sure comes in handy. Especially tax free and they didn’t have to work any more hours in the day (whch how could they, it would be impossible running a business and haveing 2 kids) How did they get so “lucky”? It’s not luck. It started started with the right #mortgage #wehaveamortgageforthat Angela Calla Mortgage Team and our ongoing management that is included with the mortgages we do. Listen to News Talk 980 CKNW interview here: https://soundcloud.com/cknw/tms-interview-sean-120118 Questions on if we can save you money on your mortgage? Contact us directly at callateam@dominionlending.ca or 604-802-3983 

Intelligently shopping for a mortgage is nearly impossible.  The terms all appear to be the same, you are bombarded with marketing, and in some cases you’re offered confusing bundle offers that sound amazing.  For years, clients have falsely thought it was all about the best “rate”.  Newsflash!!!  The rate is only a small part of a mortgage and what smart people have learned when seeking out a professional is that having a lower rate can actually cost you more.  Lenders are smart.   They will market their policies as advantages to customers even though the policies are very costly in the long run.  Unless borrowers gain clarity from a mortgage professional, they will never even know to ask about these mortgage details.   Below is what lenders will never tell you or quickly skim over:

1. Penalty Costs

Any lender that uses a posted interest rate and issues a discount off of that rate will cost, on average, three times more to exit the mortgage than lenders that do not use a posted rate.  If you go to the lender directly, they are there to sell you their product, so this is obviously not something that is brought to your attention.  Taking a mortgage like this can be financial suicide.   Borrowers learn about this the hard way when they sell their homes or when they want to take advantage of changes in the market or their lives.   At that time they learn that the higher costs will hinder or prevent their financial goals in a very bad way.  Provided that you and your property qualify with a monoline lender (a lender that doesn’t use posted interest rates), you would be crazy to get a mortgage elsewhere!   Only independent mortgage professionals have access to these types of lenders.   Their service is free and they place the mortgage with a lenders that best suit your needs rather than lenders that are trying to gain as much profit from you as possible.  HUGE difference. Don’t learn this the hard way. You don’t have to Google very much to see how people have been devastated by high IRD (Interest Rate Differential) penalties. It’s what lenders don’t tell you that ends up costing you.2.

2. Collateral charge

A collateral mortgage might be sold to you as something that magically allows you the ultimate flexibility to borrow more money later on.  In reality, it’s the ultimate trap. You still have to requalify for any future modifications to your mortgage and they register the mortgage for higher than your property value.   This means you can’t get secured lines of credit elsewhere or switch your mortgage at the end of the term without incurring exit fees!    Are you beginning to see how marketing and positioning doesn’t tell the whole story?  If you have a choice and your product needs allow it, don’t allow a lender to trap you.  This is where transparency is key, which is provided to you by an independent mortgage professional.

3. Lender History

How does your lender treat their existing clients? Is your lender constantly offering new clients all of the flash and dash with new electronics and free accounts but completely snubbing their existing customers with higher rates and fees?   Are they the first lender to raise interest rates and the last to decrease them? How do they handle changes in the market that may provide an opportunity for you to save money?   Do you think someone who is paid to work at a lender is going to bring this to your attention?  There are significant examples of this happening all of the time and if you qualify for a better lender, why would you take this abuse?

When you know better, you do better.  Mortgage professionals are here to provide you with clarity and the power of choice.   Don’t make the irreversible financial mistake of falling for a lender’s sales pitch.    As your mortgage professional, we are here to help save you from this and to help you achieve the lowest cost of borrowing.

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

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. 

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

• GDS allowed is 39%
• TDS allowed is 44%

John has a Credit Score between 600-679

• GDS allowed is 35%
• TDS allowed is 42%

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 

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 

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 

HOW TO GET A MORTGAGE WHILE BEING SELF EMPLOYED IN CANADA

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.

• The easiest way to plan is to write off fewer expenses in the two years leading up to the property purchase. Yes, this means you will pay more personal taxes. However, your income will be higher which will easily qualify you for the mortgage amount that you are looking for.
• Set your finances up through a certified accountant. Many lenders want to see self-employed income submitted through a professional rather than doing it yourself. The truth is that the time that you spend doing your own taxes will not be as efficient both financially and time wise as a professional. A certified accountant knows what to look for and has enough experience to understand the tax implications. Make sure you discuss with them what your goals are so that they can set up your taxes appropriately.
• Choose your timing carefully. If you are leaving on an extended holiday or sabbatical within the two years previous to purchasing, your two-year average income is not going to be great. Take all the time off that you want AFTER your purchase. Plan your timeline with INCOME in mind.
• Ask your Mortgage Broker about STATED INCOME. There are options with some lenders to State your income. This is based on you being in the same profession for at least two years previous to being self-employed. The lender looks at the industry and researches the mean income of someone in that same profession within a reasonable amount of time. STATED INCOME is a complicated approach to showing income. However, your Dominion Lending Centres Mortgage Professional will know what questions to ask and how to negotiate this kind of proof of income. Documents such as bank statements, showing consistent deposits, will be requested by the lender.
• BANKRUPTCY. Although some business people see bankruptcy as a viable option to get out of a bad deal and regroup, lenders generally do not like bankruptcy. Having said that, some lenders will overlook this if there has been consistent and excellent credit since the time of bankruptcy and you have been fully discharged from the bankruptcy for a specific time period. Make sure you keep ALL Bankruptcy papers easily available along with your discharge papers.
• Be prepared for higher interest rates. Lenders offer discounted rates to those that fit in the “box”. Those that are not conventional are seen as a risk and, therefore, are applied to a higher interest rate. There also could be lender fees attached to the mortgage.
• Offer a larger down payment. Lenders are somewhat handcuffed to the insurer when there is less than 20% down payment on a property purchase. But if you offer more than 20% down payment, depending on the lender, their flexibility increases and it is up to the lender or even the branch if they want to take you on as a client.
• As a last resort, you can do private financing. Even though it is an expensive option, it could result in the mortgage you are looking for. Rates are higher and there will be lender/brokerage fees. However, you could be in a private mortgage for 12 months or even less, whereby giving yourself time to improve your credit (if need be) or topping off a two year self-employed period to set yourself up to show STATED INCOME to the lender. The whole point of private financing is to use it as a short term solution for a long term plan.

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.