Using a Reverse Mortgage To Purchase a Revenue Property

General Angela Calla 25 Jul

We are seeing an increasing number of clients turn to revenue properties to supplement their monthly income in retirement. But how does that work given that reverse mortgages primarily lends on the primary residence?

 

Client Details:

  • 70 year old male & 70 year old female
  • $2.4M primary residence in North Vancouver
  • Purchasing 1 bedroom condo in Lower Lonsdale for $725,000, currently rented for $2,500/month
  • Monthly condo expenses: $350 strata fees, $150 property taxes, $100 insurance

 

Option 1: Mortgage on Primary Residence Only

 

Assuming the primary residence is free & clear these clients can do a $725,000 reverse mortgage and purchase the condo for cash, and still have some reverse mortgage funds to draw on in case of emergency.

There are no payments required on the reverse mortgage so the only things the rental income needs to service are the strata fees, property taxes and insurance. Our clients will have monthly net rental income of $1,900.

 

These clients could have chosen to do the Reverse  Income Advantage product and received $1,900/month that way, but they value real estate and like the idea of having two properties growing in value over time. And because they used the $725,000 reverse mortgage to purchase an investment property, the mortgage interest is tax deductible (please consult an accountant for tax advice).

 

Option 2: Inter-alia Mortgage on Primary Residence & Rental Property

 

But what if their primary residence has an existing $200,000 mortgage? No problem! They will do an inter-alia mortgage over the existing property and the new rental property to get them the extra funds they need to pay off the existing mortgage and purchase the revenue property.

Based on a $725,000 purchase price, these clients qualify for an inter-alia mortgage of $924,000. The clients will have just enough to payout their existing mortgage and purchase the new revenue property.

 

Not only are they receiving $1,900 in net rents each month, they no longer have a mortgage payment on the previously existing $200,000 mortgage. Their cash flow situation is improved significantly.

 

Please let me know if you have any questions about how to support you or a loved one in the purchase of a revenue property.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

8 Ways Canadians Benefit from Early Mortgage Redo: A Nurse and Engineer’s Success Story

General Angela Calla 24 Jul

In the ever-changing Canadian market, financial decisions can be both daunting and exhilarating. Every day, The Angela Calla Mortgage Team have the privilege of helping Canadians navigate these waters. Recently, a nurse and an engineer from Port Coquitlam experienced firsthand the benefits of taking control of their financial future by redoing their mortgage early. Through this decision, they managed to save a significant amount of money, and their experience highlights the eight things they love about it.

1. Save Money Monthly: One of the most immediate and rewarding benefits of refinancing their mortgage early was the opportunity to save money on a monthly basis. By securing a lower interest rate and potentially extending the mortgage term, they reduced their monthly mortgage payments significantly, freeing up funds for other important financial goals.

2. No Outside Debts: With the newfound savings from their lower mortgage payments, the nurse and engineer were able to eliminate outside debts. Paying off high-interest debts, such as credit cards or lines of credit, provides them with financial freedom and the ability to focus on their long-term financial well-being.

3. Building an Emergency Fund: Having an emergency fund is essential for handling unexpected financial challenges without resorting to high-interest loans. By restructuring their mortgage, the couple now has an opportunity to build a robust emergency fund, giving them peace of mind and added financial security.

4. Accelerating Property Ladder Progress: A key advantage of refinancing early is the ability to move up the property ladder sooner. With reduced monthly payments and better financial planning, the nurse and engineer are now on track to achieve their dream of upgrading to a larger, more suitable home in the future.

5. Investing in Their Children’s Future: With their finances in better shape, the couple has decided to start contributing to their children’s Registered Education Savings Plan (RESP). By prioritizing their children’s education, they are building a solid foundation for their youngsters’ futures.

6. Contributing to Their RRSPs and Tax Refunds: Through mortgage refinancing, the couple was able to free up more funds to contribute to their own Registered Retirement Savings Plans (RRSPs). This not only helps secure their retirement but also leads to additional benefits, such as a tax refund, which they plan to use for a bit of well-deserved fun.

7. Avoiding Unnecessary Interest Payments: By taking control of their mortgage and refinancing early, the nurse and engineer were able to avoid paying unnecessary interest for no apparent benefit. Reducing the overall interest paid over the life of the mortgage allows them to retain more of their hard-earned money.

8. Securing a Lower Rate for the Long Term: One of the most significant advantages of refinancing early is the ability to secure a lower interest rate for a more extended period. This locks in their mortgage at a favorable rate, shielding them from potential future interest rate fluctuations.

The success story of the Port Coquitlam nurse and engineer demonstrates the power of making informed financial decisions. By taking control of their mortgage and refinancing early, they unlocked a wealth of benefits, including reduced monthly payments, elimination of outside debts, and increased contributions to their RRSPs and their children’s RESP. Moreover, their decision to build an emergency fund and secure a lower interest rate provides them with financial security and a stronger foundation for their future. If their experience teaches us anything, it’s that by carefully navigating the changing market and seeking expert advice, Canadians can achieve financial success and enjoy a brighter financial future.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

How Homeowners Are Coping With Raising Interest Rates When Renewing Mortgages

General Angela Calla 24 Jul

 

 

 

 

PUBLISHED JULY 21, 2023 UPDATED JULY 22, 2023

With the Bank of Canada’s latest interest rate hike in July, life keeps getting more expensive for those with a mortgage.

Angela Calla, mortgage broker at Dominion Lending Centres in Vancouver, notes that regardless of income level, having to qualify at interest rates that are 4 or 5 percentage points higher than when a homeowner first got their mortgage is certainly a pressure cooker. She recently shared her thoughts with Globe Advisor on strategies for how her clients are coping.

What things do you advise clients to consider at mortgage renewal time?

With another hike looming in the fall, anybody who has a renewal upcoming in the next year shouldn’t wait to secure a rate to protect themselves and minimize their payment shock.

They also need to consider if they want to move up the property ladder in the future or have outside debts. The mortgage renewal is the optimal time to review your options because there’s no penalty.

If they live in a strata property, they want to make sure that they have no assessments coming up. It’s essential for them to take out the money to have in an emergency fund for that. We’re seeing a lot of people getting hit with assessments on their condos for certain items such as roofs. That can be detrimental to people on a fixed income in these high inflationary times and even at the best of times. If they need to break their mortgage down the road, then they’re looking at a penalty. In the middle of an assessment, lenders don’t look at these properties favourably.

What are your clients doing to manage the rate increases?

Some people who are experiencing the largest increases are using a reverse mortgage. They’re getting these because they don’t want to take their money out of investments and pay taxes on them. They already feel like they may not be prepared for retirement with the increase in inflation. It’s been common for them to take a three- or five-year term to help things as they settle.

Some are putting their emergency funds in a high-interest saving account paying more than 5 per cent. So, instead of paying property taxes with their mortgage or pre-paying their mortgage, they’re putting those funds aside in their emergency funds.

Some are extending their amortization to give them some time until rates come back down. Some want to sell and rent but the problem is there’s no product to rent.

What’s your overall outlook that you share with clients who are finding it tough to cope?

I tell my clients that anything they do right now is specific to this time in the market and specific financial circumstances. It can always be modified and changed when other things change down the road.

This interview has been edited and condensed. This is Globe Advisor’s weekly newsletter for professional financial advisors, published every Friday.

– Deanne Gage, Globe Advisor reporter

 

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Multigenerational Home Renovation Tax Credit

General Angela Calla 19 Jul

For the 2023 and subsequent taxation years, Budget 2022 introduced the Multigenerational Home Renovation Tax Credit (MHRTC), a refundable credit to assist with the cost of renovating an eligible dwelling to establish a secondary unit that enables a qualifying individual (a senior or an adult who is eligible for the disability tax credit) to live with a qualifying relation. The credit is available for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date.

Read more here: MHRTC Government Link

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

CPI Inflation Falls To 2.8%–Inside the BoC’s Target Range

General Angela Calla 19 Jul

Canadian Inflation Falls Within Bank of Canada’s Target Range; Food and Shelter Costs Remain High

June inflation data released today by Statistics Canada showed that the Consumer Price Index (CPI) rose 2.8% year-over-year (y/y), slightly below expectations. This was the lowest CPI reading since February 2022.

The decline in inflation was mainly due to lower energy prices, which fell by 21.6% y/y. Without this decline, headline CPI inflation would have been 4.0%. The year-over-year decrease resulted from elevated prices in June 2022 amid higher global demand for crude oil as China, the largest importer of crude oil, eased some COVID-19 public health restrictions. In June 2023, consumers paid 1.9% more at the pump compared with May.

Food and shelter costs remained the two most significant contributors to inflation, rising by 9.1% y/y and 4.8% y/y, respectively. Food prices at stores have risen nearly 20% in the past two years, the most significant rise in over 40 years. Shelter inflation rose slightly from 4.7% y/y in May.

The largest contributors within the food component were meat (+6.9%), bakery products (+12.9%), dairy products (+7.4%) and other food preparations (+10.2%). Fresh fruit prices grew at a faster pace year over year in June (+10.4%) than in May (+5.7%), driven, in part, by a 30.0% month-over-month increase in the price of grapes.

Food purchased from restaurants continued to contribute to the headline CPI increase, albeit at a slower year-over-year pace in June (+6.6%) than in May (+6.8%).

Services inflation cooled to 4.2% y/y from 4.8% y/y in May. This was due to smaller increases in travel tours and cellular services.

The Bank of Canada’s target range for inflation is 1% to 3%. While June’s inflation reading was within the target range, it is still higher than the Bank would like. The Bank raised the overnight policy rate twice in the past two months to reduce the stickier elements of inflation.

There were signs of easing price pressures for consumer goods also. Durable goods inflation continued to cool to 0.8% y/y in June. Passenger vehicle prices rose slower in June (+2.4%) than in May (+3.2%). The year-over-year slowdown resulted from a base-year effect, with a 1.5% month-over-month increase in June 2022 replaced with a more minor 0.6% month-over-month increase in June 2023. This coincided with improved supply chains and inventories compared with a year ago. Household furniture and equipment was up only 0.1% y/y in June, down from a peak of 10.5% last June.

The June inflation data provides some relief to consumers, but it is clear that food and shelter costs remain a major concern. The Bank of Canada will closely monitor inflation in the coming months to see if it is on track to return to its 2% target. There is another CPI report before the Bank meets again on September 6th.

The Bank of Canada’s underlying inflation measures cooled further in May. CPI-trim eased to 3.7%y/y in June from 3.8% y/y in May, and CPI-median registered 3.9% versus 4.0% y/y in May. The chart below shows the closely watched measure of underlying price pressures, the three-month moving average annualized of the core measures of CPI. They continue to be just under 4%.

Canadian inflation continued to make encouraging progress in June. However, the cooling in headline inflation benefits from sizeable base effects due to the favourable comparison to high energy prices last June. The Bank of Canada (BoC) is watching its preferred core measures, which continue to show glacial progress.

Bottom Line

It takes time for the full effect of interest rate hikes to feed into the CPI. Mortgage interest costs will continue to rise as higher interest rates flow gradually through to household mortgage payments with a lag as contracts are renewed.

BoC Governor Macklem emphasized last week that the Bank has become worried about the persistence of underlying inflation pressures in the economy. The June inflation data likely provides some reassurance that things are moving in the right direction, but not fast enough for the Bank of Canada to let its guard down.

The BoC is facing a difficult balancing act. It needs to raise interest rates enough to bring inflation under control, but it also needs to be careful not to raise rates so high that it causes a recession. The next few months will be critical for the BoC as it assesses the risks of inflation and recession.

(Courtesy of Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres)

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Bank of Canada Hikes Policy Rate By 25 BPs to 5.0%–Highest in 22 Years

General Angela Calla 13 Jul

Interest Rates Will Stay Higher For Longer

The Bank of Canada increased the overnight policy rate by 25 basis points this morning to 5.0%, its highest level since March 2001. Never before has a policy action been so widely expected. Still, the Bank’s detailed outlook in the July Monetary Policy Report (MPR) suggests stronger growth and a longer trajectory to reach the 2% inflation target. The Bank of Canada believes the economy is still in excess demand and that growth will continue stronger than expected, supported by tight labour markets, the high level of accumulated household savings, and rapid population growth. “Newcomers to Canada are entering the labour force, easing the labour shortage. But at the same time, they add to consumer spending and demand for housing.”

The Bank forecasts GDP growth to average 1.0% through the middle of next year–a soft landing in the economy. “This means the economy moves into modest excess supply in early 2024, and this should relieve price pressures. CPI inflation is forecast to remain about 3% for the next year, before declining gradually to the 2% target in the middle of 2025.” This is about six months later than the Bank expected in April. This means that high-interest rates remain higher for longer.

While Canadian inflation has fallen quickly, much of the downward momentum has come from lower energy prices and base-year effects as large price increases last year fall out of the year-over-year inflation calculation. We are still seeing large price increases in a wide range of goods and services. Our measures of core inflation—which we use to gauge underlying inflationary pressures—have come down, but not as much as we expected.

There continue to be large price increases in a wide range of goods and services. Measures of core inflation have come down, but by less than expected (see chart below). One measure of core inflation–which removes food, energy and shelter prices, remains elevated and will likely continue to be sticky.

To remove base effects, the Bank looks at three-month rates of core inflation, which have remained at 3.5% to 4.0% since September 2022, almost a percentage point above the Bank’s expectations at the beginning of this year.

In addition, labour markets remain tight. Although the jobless rate has risen to 5.4%, that is still low by historical standards. The unemployment rate was at 5.7% when the pandemic began, which was considered close to full employment at the time. Job gains have been robust, with about 290,000 net new jobs created in the first six months of 2023. Many new entrants to the labour market have been hired quickly, and wage growth has been about 4% to 5%.

The faster-than-expected pickup in housing resales, combined with a lack of supply, has pushed house prices higher than anticipated by the Bank of Canada in January (see chart below). According to the MPR, “the previously unforeseen strength in house prices is likely to persist and boost inflation by as much as 0.3 percentage points by the end of 2023, compared with the January outlook.”

Bottom Line

As always, the next steps by the Bank of Canada will be data-dependent. Interest rates will remain higher for longer if the Bank is correct that inflation will not reach its 2% target until 2025. We also cannot rule out more rate hikes in the future. This morning, the US inflation data for June were released, showing a marked decline from 4% in May to 3% in June. Markets rallied worldwide, taking Canadian bond yields down despite the BoC tightening. The hardship caused by the continued rise in mortgage rates is already evident. OSFI recently announced the possibility of higher capital requirements for federally insured financial institutions on mortgages with loan-to-value ratios above 65% that have unusually high amortizations. This proposal is now out for consultation. It seems OSFI and the federal consumer watchdog are working at cross purposes.

(Courtesy of Chief Economist, DLC – Dr. Sherry Cooper)

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Angela Calla on CBC National News Discussing Mortgage Strategies

General Angela Calla 13 Jul

Its been a stressful week for many with the increase in interest rates. Here is a segment we did with the CBC National that discusses some the strategies that can help you navigate these current times.

If you are up for mortgage renewal, or trying to plan for your future in these times. Click here for the segment  ( approx. 5 minute)

Please reach out to us to review your mortgage or if you would like an introduction to our financial planning partners

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

‘Devastating news’: B.C. premier worries about rising interest rates for residents

General Angela Calla 13 Jul

B.C. Premier David Eby said the Bank of Canada interest rate rise Wednesday is “devastating news” for families that have debt.

“They borrowed money for various reasons to get through,” he said at the annual premier’s meeting in Winnipeg. “A lot of businesses in British Columbia borrowed money to get through the pandemic. They’re struggling under the weight of that debt.”

The Bank of Canada has raised its benchmark interest rate by another 25 basis points, bringing it to levels not seen since 2001 amid fears the decline in inflation “could stall.”

Economists say the latest move is a warning to Canadians not to expect rate cuts anytime soon, and that future rate hikes are not off the table. The central bank’s key interest rate now stands at 5.0 per cent following back-to-back increases.

Eby said he worries about the full impact of the high key interest rate.

“You really do have to wonder when the Bank of Canada is going to take a pause and see what the impact of this is going to be,” he added. “We haven’t seen the full impact yet. People have not renewed their mortgages yet. And the businesses that are struggling under debt have not started going under yet. But they will those jobs will be lost. And it won’t just be in British Columbia. It’ll be across the country.”

Angela Calla, author of The Mortgage Code, told Global News that this interest rate means Canadians who do have a mortgage coming up for renewal in the next year should not wait to get their rate hold.

“Rate holds can be held for 120 days,” she said. “There is no cost to get a rate hold and then allow the timing of the market to determine what the best option is for you. We certainly don’t expect decreases in the next year, so having that in mind can give you the power to shop early with any mortgage renewal or purchase.”

Calla added that more increases are expected until the Bank of Canada gets inflation in line.

View the videos here: Global News

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Bank of Canada Raises 25 Basis Points

General Angela Calla 12 Jul

The Bank of Canada (BoC) has made the decision to increase interest rates by 0.25% today.  You can view the announcement here: Bank of Canada Announcement

Here are a few key points to consider regarding this rate increase:

  1. Borrowing Costs:  With the rate hike, borrowing costs for individuals and businesses will likely increase. This affects mortgage rates, credit card rates, and loans. If you have any outstanding debt or are planning to take on new debt, it would be advisable to reassess your options and consider the potential impact of the higher interest rates. The financial impact it has is approx. $16 dollars per 100k in borrowed funds on a 25-year amortization. Ensure to get a rate hold if you are coming up for renewal or plan to make a purchase in the next 6 months.  Here is our app to download to see what a current payment can look like for you My Mortgage Toolbox.
  2. Fixed-Income Investments: The increase in interest rates may have an impact on fixed-income investments such as bonds and GICs. Generally, when interest rates rise, the value of these investments can decline. It would be beneficial to review your fixed-income holdings and discuss any necessary adjustments to your investment strategy with a financial planner, we can make an introduction for you by simply replying to this email address with your phone number.
  3. High Interest Savings Accounts: Interest rates are at an all-time high in today economic environment so those to looking to make a purchase in upcoming years can benefit from that silver lining along with the new First Home Savings Account.

If you have any questions or concerns regarding this rate increase or its potential impact on your mortgage or HELOC, for you or a loved one please feel free to reach out to us directly. We are here to support you and help you achieve your financial goals even in the face of market fluctuations.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Homeowner Insurance 101

General Angela Calla 7 Jul

Not all insurance products are created equal. It is important to understand all the different insurance products to ensure you have proper coverage.

Below are the main insurance product options you will encounter with homeownership, and what they mean:

Default Insurance: This insurance is mandatory for homes where the buyer puts less than 20% down. In fact, default insurance is the reason that lenders accept lower down payments, such as 5% minimum, and actually helps these buyers access comparable interest rates typically offered with larger down payments. This insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments.

Home (Property & Fire) Insurance: Next, we have another mandatory insurance option, property and fire coverage (or, home insurance, as most people know it by). This MUST be in place before you close the mortgage! It is especially important to note that not all homes or properties are insurable, so you will want to review this sooner rather than later. Keep in mind, with this coverage you may not have protection in the event of a flood or earthquake. You may need to purchase additional coverage to be protected from a natural disaster, depending on your location.

Title Insurance: When it comes to lenders, this insurance is mandatory with every single lender in Canada requiring you to purchase title insurance on their behalf. In addition, you have the option of purchasing this for yourself as a homeowner. The benefit of title insurance is that it can protect you from existing liens on the property’s title, but the most common benefit 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 or herself – without your knowledge. Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property.

Strata Insurance: When it comes to a stratum, their insurance covers the building itself – meaning in the event of an incident (fire, flood, etc.) the building can be re-established. This however only covers common areas; it does not cover the contents of YOUR particular unit, which requires a homeowner’s insurance policy. Personal insurance can also help with the strata deductible. For example, in the event of a flood that originates from a unit, it will require fixes to the unit itself (under your personal policy) plus the building (covered by the strata policy). Depending on the type of claim or damage, owners are often relocated to a hotel while the unit is being repaired and the personal insurance would also cover being displaced.

To ensure that you remain up-to-date with your strata insurance policies, it is vital that homeowners living within a stratum to check with management for a copy of the most recent insurance policy. Always take your strata and individual policy to an insurance agent to ensure you are aware of your coverage and that your individual homeowner’s policy is working in your favor. Investment property owners especially need to check their existing deductible against the updated deductible and insurance policies to avoid any future issues.

Mortgage Protection Plan: This coverage is optional, but any mortgage professional will tell you is extremely important. The purpose of the mortgage protection plan is to protect you, and your family, should something happen. It acts as a disability and a life insurance policy in regards to your mortgage. Typically, when you get approval for a mortgage, it is based on family income. If one of the partners in the mortgage is no longer able to contribute due to disability or death, a mortgage protection plan gives you protection for your mortgage payments.

If you have any questions about mortgage insurance or what are the best options for you, please do not hesitate to reach out to me! I would be happy to take a look at your existing plan and discuss your needs to help you find the perfect coverage to suit you and your family.

(Courtesy of DLC July Newsletter)

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

« First…34567