CMHC is cutting the types of mortgage insurance it offers, meaning the era of tighter rules for homebuyers hasn’t come to an end.
 
The Crown corporation said late Friday it will stop insuring mortgages on second homes, effective May 30^th. Anyone who has an insured mortgage will no longer be able to act as a co-borrower on another mortgage that CMHC insures. In addition, it will stop offering mortgage insurance to self-employed people who don’t have standard documents to prove their income.
 
CMHC said it does not expect the new rules to have a big impact on the housing market, but hinted more changes are on the way.
 
So far, Genworth and Canada Guaranty have not announced plans for similar changes.
 
Click here to read more from the Globe and Mail.
 

The constant in mortgages is change. The Angela Calla Mortgage Team is here to help you for the life of your mortgage at 604-802-3983 callateam@dominionlending.ca

Putting your full faith in a mortgage preapproval is like betting on a heavy favourite in a horse race. You’ll probably win but there’s room for major disappointment.
 
Sure, preapprovals have benefits:

• The best ones accurately measure your qualifications and how much house you can afford
• Their 90- to 120-day rate guarantees protect you if rates rocket up while you’re home hunting
• They make you seem more serious to sellers and real estate agents. (In competitive bidding situations,      they’re almost mandatory)
• They’re free and there’s no obligation to use the lender that preapproved you

But here’s the problem: preapprovals are not full approvals. So if you’re going to rely on one, you need to understand their limitations.
 
Click here for 10 preapproval facts every mortgage shopper should know courtesy of the Globe and Mail.

The Angela Calla Mortggae Team is here to help you with your mortgage contact us at 604-802-3983 or callateam@dominionlending.ca
 

There are many factors being overlooked by the media frenzy focusing on how unaffordable real estate is these days.

 Of course housing is more expensive than it was for our grandparents! Everyone has a similar family comparison of how a grandparent or aunt paid $50,000 for a home in 1954 and sold it for $600,000 in 2010! That’s a lot of years for home prices to rise!

 Have Canadians forgotten about the tax shelter that home ownership provides?

 We have TFSAs and RRSPs, but they can only help so much, especially when you have to invest, in most cases, after you have paid your housing expense.

 Real estate is often overlooked for tax reduction and deferral, let alone income generation and inflation protection.

 In the example above of the home purchased in 1954 and sold in 2010, there was $550,000 in equity that is Tax Free! Who can argue that doesn’t provide a good future lifestyle for whatever life can throw at you?

 Let’s take a look into the life of these homeowners who had four children and were able to help all of them with a down payment for their first homes.

 As they aged, they also ran into some health problems. They eventually ended up in long-term care, which cost $5,000 a month. No surprise that isn’t covered by a pension!

 They could go to their children. They have $5,000 a month to spare, right?! Not likely.

 Take a look at what you net on your income:

$50,000 gross = 40,465 net

 Are you depressed yet?

 To find your tax bracket, use the following chart: http://retirehappy.ca/marginal-tax-vs-average-tax

 How could you get that if you rent?

 Here is the profile of how to build this for yourself in your 20s in a year:

Earning $32,000/year ($16/hour full time).

Step 1: Save $12,000 – get aggressive by saving $1,000 per month! Live at home, take a bus, and do whatever it takes. If you have an excuse, you don’t want it badly enough.

Step 2: Buy a two-bedroom condo for $200,000 in either the Tri-cities, Surrey, Delta, Langley, Maple Ridge or Pitt Meadows. A member of our team will find one for you – and protect you with the best mortgage.

Acc Bi weekly mortgage payments = $478. MUST increase to $574 accelerated bi-weekly.

This mortgage paid off in approx 12 years!

Insurance and additional ways to pay your mortgage off faster:

Rent a room to your brother, co-worker, a student, etc, or even rent out your parking spot

Step 3: You now have $200,000 in Tax-Free money to build more wealth in your early thirties – Yes, please! (This is provided the property didn’t even increase in Value, which is unlikely over 12 years!)

Real estate is not a gamble long-term. Stop making excuses today! If you don’t make excuses, you can have it – I did this!

Many borrowers have been focused on the wrong details when it comes to their mortgage. It’s NOT all about the interest rate. To focus solely on the interest rate can be a costly mistake. The difference between 10 basis points (eg, 3.39% vs 3.49%) on a $350,000 mortgage is a savings of $556 in interest throughout an entire 5-year term, and can actually cost you more than $18,000 by taking the lower rate!

There is a significant list of items that contribute to a larger cost by opting for the lowest rate without taking other factors into consideration.

Below are a few examples that clients were most surprised with this month:

1. If they have posted rates – the fees are at minimum double if not triple to exit your mortgage or make a change. Even if the lender beats the rate you’re getting upfront, it’s going to cost you! Example on a 300k mortgage $12k to exit vs $4500.

 2. Semi-monthly payments benefit the lenders, not you.

This is a trick that doesn’t help the borrower pay down the principal at all. We see time after time borrowers who “think” they were doing the right thing (accelerated bi-weekly payments, which actually help you pre-pay your mortgage an extra month’s worth of payments per year).  The borrower then gets stuck with that lender as they don’t have enough equity to move elsewhere. This can cause significant payment shock at the end of your term.

3. Life and disability insurance through your lender isn’t “really”portable.

True portability means that the insurance will follow your mortgage from lender to lender. Bank products only allow for portability If you remain with them, so this is a “half truth”. They may not be as competitive or have a product that suits you in the future. This is just another sales capture tactic. If you want true freedom, be sure to get independent insurance!

 4. Most lenders prefer to register a mortgage as a collateral charge that costs you money down the road.

Sure it has its place – it’s sold as a convenience – but be sure to read the fine print. You have to re-qualify and pay fees to access additional funds down the road. How is that convenient for you?

 5. Want the lender to include property taxes with your mortgage payment? Did you know they charge you for that option?

They also only pay your taxes annually, which means they’re sitting on your money. If you opt for automatic withdrawal from the city you live in directly, there can be up to a 1% discount. With some insured mortgages it’s mandatory for a while for them to collect your taxes and pay on your behalf, but it’s always best to keep your money in your control whenever you can!

6. Did you know that if you bought a home with mortgage insurance (most commonly but not always for a less than 20% down payment that is portable and you can do a top up?) The lender’s policy is to apply for new insurance to collect a new premium to increase the mortgage amount. They may not have the product you need the 2nd or 3rd time around if you qualify for a top up it saves you thousands. Also they have there own internal policies as to how long they will allow a transfer to happen with insurer’s. They are to avoid top up’s and get new policies…the price you can pay? On a 300k mortgage say for a self employed borrower $16,350.00 added to the 300 k instead of a few hundred dollars on average!

 The Angela Calla Mortgage Team can ensure you have clarity of all the pros and cons of the options out there for the lowest cost of home ownership contact us today at 604-802-3983 callateam@dominionlending.ca

The dream of mortgage freedom is less than 10 years away for 37% of Canadian mortgage holders, according to Scotiabank’s Mortgage Landscape Study released yesterday.

More than two-thirds (68%) of mortgage holders have taken steps to pay off their mortgage faster, including increasing the frequency of regular payments (39%), increasing regular payment amounts (25%), and making additional lump sum payments (24%).

Of mortgage holders who agree that being mortgage-free faster is important (80%), the top cited reasons are to have more disposable income (30%), to pay off debt or to pay less interest (both 17%), and to save for retirement (11%).

The Angela Calla Mortgage Team puts a plan together to help every borrower become mortgage free as soon as possible with our on going mortgage plans and proactvie managment that is included with every mortgage done directly throught our team at no cost. Contact us today at callateam@dominionlending.ca 604-802-3983

Borrowers beware

The 2.99% BMO five-year mortgage isn’t quite as good as it sounds.

BMO’s recent move to bring its rate below the psychologically significant 3% mark for fixed-rate five-year mortgages is being treated as a big deal because a similar move a year ago provoked then Finance Minister Jim Flaherty to admonish the bank. Joe Oliver, Flaherty’s successor, is taking a more laissez-faire attitude.

What BMO is offering until April 17th is a competitive rate in a mortgage with uncompetitive terms. Most important, you can’t break this mortgage before it comes up for renewal in five years unless you sell the property, refinance with BMO or do an early renewal into another BMO product. All the usual prepayment penalties would apply in these situations.

No Surprise every lender is out there to create a buzz. The Angela Calla Mortgage Team will get you the best mortgage that will save you the most amount of money over the term for the lowest cost of home ownership. Contact us at callateam@dominionlending.ca 604-802-3983

Here’s a great article from the Financial Post – this echoes what i’ve been saying over the past few months and is a reminder of why real estate needs to become more integrated into the conversation around financial planning and wealth management.

http://business.financialpost.com/2011/04/06/a-secret-tax-shelter/

The Angela Calla Mortgage Team is here to help you review your options at 604-802-3983 callateam@dominionlending.ca

As heard on The Mortgage Show on CKNW with Angela Calla. To get pre approved for this property or any other purchase email us at callateam@dominionlending.ca or call 604-802-3983

This weeks deal of the week has been brought to you by:

Robert Boies Royal LePage Coronation West cell: 604 341 3009 t: willingtwo E-mail: robboies@royallepage.ca www.willingsellerwillingbuyer.com

mortgageshow_rb_03-08-14.mp3

Please note that properties like this move quickly and getting set up with Rob Boies directly robboies@royallepage.ca will keep you abreast of all of these types of opportunities meeting your specifications

Thanks for visiting

Angela Calla, AMP

A Bank of Montreal customer is going public about how the bank wired $87,500 of his inheritance money to a scammer.

http://www.cbc.ca/1.255564

This article illistrates the mistakes banks can make and the run around they can give you “after the fact”

We love keeping them honest and are here to help you with your mortgage.

Contact The Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca

Lenders are advertising the option of skipping a mortgage payment more often these days – with one major bank even creating a TV ad!

But unless this is your only option, it’s not recommended that you skip a payment because, like most ads that sounds too good to be true, this option is as well.

Here is a real cost example:

Current Mortgage Payment $1530, 30 years at 3.30% = $2442.87 in interest costs if not paid back.

The banks want you to think they’re advertising the option to skip a payment to do you a favour. But it’s important to realize that lenders are in the business of making money. They’re not going to create an ad that doesn’t benefit them in the long run.

And it’s not like you can simply choose to skip any payment at will when you need it most. You actually have to prepay your mortgage in order to take advantage of this mortgage vacation option.

You can miss a regular mortgage payment as long as you have already prepaid that amount by doubling up any mortgage payment, increasing your mortgage payments or making lump sum payments. It’s important to know how much you can prepay each year before making extra payments – this varies from lender to lender.

The number of eligible payments covered by your payment vacation will be based on a combination of your prepaid amount and your current regular monthly mortgage payment. There is also typically a maximum payment vacation permitted per mortgage term, regardless of how much you have prepaid your mortgage.

 Other considerations to think about when looking at the mortgage vacation option include:

•             Interest is capitalized (ie, interest is added to your outstanding principal balance)

•             Borrowers lose the benefit and interest cost savings of prepaying their mortgage once they use the mortgage vacation option

 If you happen to already be in arrears on your mortgage, you can’t take advantage of this option.

It’s always important to read the fine print and ask questions when using a tool advertised by your lender. Better yet, speak to your mortgage professional – we know the ins and outs of all the bank offerings and can help advise you on your best options.

 As independent, unbiased mortgage professionals, it’s our job to show transparency to ensure you have the right security, product, term and rate for your mortgage needs at the lowest overall cost, and with the most control in homeownership for the security you deserve.

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”.

www.angelacalla.ca

Reach my Team Chris Adkins & Denzil Anderson at 604-939-8777 & callateam2@dominionlending.ca