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Monday, 17 October 2016

Stress test for new mortgages aka rates might go up soon?


1. The Mortgage Rate "Stress Test"  Effective October 17th, you're going to need to pass a tougher stress test when qualifying for any insured mortgage. This applies even if your down payment is more than 20% but your lender requires mortgage insurance. You can still avail of today's low interest rates. The government is saying you should qualify based on a higher rate. That rate would be the Bank of Canada's five-year fixed posted mortgage rate. As of September 28th, that rate is 4.64%.  What does this mean exactly?  *Any home buyer

that has less than 20% down payment will now have to qualify using the Bank of Canada's 5-yer posted rate regardless of what the product or term is chosen. So for instance, if you are getting 5-year fixed term today at 2.34% today, you will still have to qualify at 4.64% which is nearly double than your actual interest rate. This will significantly cut the mortgage amount you could borrow.   * Any home buyer or existing homeowner looking to purchase or refinance will be subject to the same qualifications above if their lender requires mortgage default insurance even with more 20% down payment or equity.  
Get Your FREE advise from one of Canada's Leading Mortgage Brokerages, get a peace of mind!

2. New restrictions for low-ratio mortgages  Beginning November 30th, there are specific criteria for any home buyer applying for a low ratio mortgage  The amortization (period of the loan) must be 25 years or less  The purchase price is less than $1 Million  Your credit score has to be 600 or greater  The property has to be owner occupied   

3. Capital gains exemptions for primary residences  Selling your primary residence is tax-free. You don't have to report it as income tax on your tax returns. When these changes come into effect, selling your primary residence remains tax free. But now it has to be reported to the Canada Revenue Agency.    This change is primary targeting foreign buyers who have been evading Canadian tax laws. They buy a home (as an investment), flip it, and sell it at profit without paying taxes. They do this buy saying it's their primary residence, even though they may not have lived there.   

4. Lenders and the risks they take  The government is telling the banks and lenders to take some of the risk. This mortgage rule change could to higher mortgage rates. Lenders can no longer rely on the government to cover mortgage defaults. They would take on some of the responsibility. This would encourage more prudent and careful mortgage practices. Ultimately it could lead to higher mortgage rates so that lenders can afford to cover themselves for defaults.

Wednesday, 5 October 2016

Reverse mortgages, learn about the facts

What is a reverse mortgage?
How does it work?
Advantages of a reverse mortgage!
Disadvantages of a reverse mortgage!
Where can you get a reverse mortgage?
How do you qualify?
Tips to keep in mind!
Before you make a decision, be sure you also consider:
Be sure you fully understand the terms and conditions of the contract before you sign it. By exploring all of your options, you will be better able to make the decision that best suits you.
Ask all of these questions before you commit to a reverse mortgage:
·        What are the fees?
·        Are there any penalties if you sell your home within a certain period of time?
·        If you move or die, how much time will you or your estate have to pay off the balance of the loan?
·        At your death, what happens if it takes your estate longer than the stated time period to fully repay the loan?
·        What happens if the amount of the loan ends up being higher than the value of the home when it’s time to pay the loan back?
For more information and get a FREE consultation session:

Tuesday, 4 October 2016

New mortgage rules comming in effect

 DLC Regional Mortgage Group Oct.04.2016.

Over the past few years we have seen a large number of mortgage rule changes. 
  •      -Maximum amortizations decreased from 40 to 25 years
  •      -Terms less than 5 years required a borrower to qualify at a higher interest rate
  •       -Refinances capped at 80% of a property’s value
  •       -Income for self-employed individuals had to be more verifiable
  •       -Increased down payment for homes over $500,000

And the list can go on and on. We have heard rumors since March of this year that another round of rule changes were coming through but we were not 100% on exactly what they would entail.
Why are they even worried about it you may ask? The reason is simple, they are heavily invested in our real estate market. CMHC stands for the Canadian Housing and Mortgage Corporation which is owned by the federal government.  They are issuing insurance policies that they are potentially going to have to cover losses on from tax payer’s money if/when people stop paying. 

1.      Mortgage Stress TestAs of October 17th, 2016 all insured mortgages, regardless of term or type, will be required to qualify at the bank of Canada posted rate.To put that in perspective:
  1. Family Income $80,000
  2. Monthly Debts     $500
  3. Property Taxes  $3,500
  4.  25 year term (Qualification rate today is 2.39% and after will be 4.64%)

    Today that family can buy a home worth approx. $393,000 but after the 17th that drops to $310,000. That is a large decrease to say the least.
    The rate you pay will not change, just the interest rate we have to use to qualify you for the loan.
    Safer LendingMortgages with a loan to value of less than 80% were not subject to the same stringent rules as those with less than 20% equity. As of November 30th, 2016 that will change and mortgages will all be subject to the same lending criteria.
2.      Closing Loopholes and Managing Tax Fairness
There is a proposed change to the tax laws on the table as well. They want to make sure that the Capital Gains tax exemption on a primary residence is not abused by either residents or non-residents buying and selling a primary residence within the same year.  This is in all likelihood an attempt to cool Toronto and Vancouver markets.
3.      Managing Risk and Protecting Tax Payers
The final piece in the announcement is a little bit unclear as to exact ramifications. Currently CMHC and the other mortgage insurers take on all the risk associated with mortgage default. They are planning to implement a consultation process on a policy option where mortgage lenders would have to manage a portion of their loss.  We will have to wait and see what exactly happens from here.

So there you have it. Getting a mortgage just got even harder and it doesn’t matter if you walk into your trusted branch or go through a mortgage broker. The rules have changed for us all.
I cannot stress enough the necessity of making sure you speak to a well-qualified mortgage professional before you make any decisions about buying or selling in case you are one of the folks affected by these changes. I will keep you up to date on any changes which come down the road.

Saturday, 17 September 2016

Game of mortgages, this you can not afford to lose

What if I tell you that you will be able to save over $15,000 on a $300,000 mortgage amortized over 25 years during a 5 year term? Would it grab your attention and would be willing to get a FREE assessment of your situation?
Here are the reasons you should get well educated on mortgages: 
  • save thousands on interest by getting the best possible rate
  • grab the mortgage product suits your circumstances
  • have a wide variety of lenders to pick from
  • chose the lender makes you to make changes to your mortgage
  • take a mortgage from lender does not want to penalize you paying out your mortgage early
  • have a lender with flexible options and willing to help
  • banks are not the only options, there are many others available for only by brokers
  • many other reasons to talk to 
Not all mortgage brokers are the same, just like in any other professions, you must find the one with experience in creative solutions, tight connections with lenders, not only the obvious choices, but the lenders available only by mortgage brokers. Lenders battling for your business, it is only a game for them, but it is a game you literally can not afford to lose.

Friday, 9 September 2016

Reasons Why You Need a Mortgage Pre-approval

Posted by Joe Samson on Thursday, September 8th, 2016 at 1:57pm. in Twitter re-posted here by MortgagePRO Ltd. when you need a mortgage, you need a pro 

When making financial decisions that will heavily impact your life, such as buying a home, it’s important to be informed before jumping into a decision and making sure ahead of time that you are ready to buy a home.
This means asking questions and using all resources available to understand more about the commitment of purchasing a property. To gain this understanding, the first (and arguably the most important) step is to determine how you will pay for it. While paying all cash is ideal because it eliminates the need to pay interest, this isn’t something most people can do. This is when the majority of home buyers turn to obtaining a mortgage so they can secure the funds they need to purchase a home.
Fortunately as a buyer you have many mortgage options available to choose from. You will find that each of these are different, as some will require more money down while others may have strict requirements dependent on their financial history. To determine which is best for your situation, getting pre-approval for a mortgage is crucial. In fact, doing this before you ever look at homes is highly recommended by real estate agents and it can even help streamline the entire buying process.
With awareness of the fact that you need to get pre-approved for a mortgage, the next step is to understand more about the process of how to go about getting a mortgage pre-approval. The following guide will help you get started and anticipate what to expect. The information you learn through this can help you have a more enjoyable experience and smoother transaction in the future.
Reasons for getting a mortgage pre-approval:
1.       Negotiate Better Terms & Price
2.      Build Trust & Win Multiple Offer Situations
3.      Take Possession of Your New Home Faster
4.      Get Your REALTOR®’s Attention & Priority
5.      Seller May Request Proof of Financing
6.      Establish a Laser Focused Search 
7.      Avoid Disappointment and Frustration
8.      Interest Rate Increase Protection
What is a Mortgage Pre-approval?
Each lender has a specific set of guidelines that they use to determine whether a borrower will get approved for a mortgage. These guidelines are more in-depth than those associated with a pre-qualification, as that only involves a superficial look at you as the borrower. Due to the fact that requirements can be so different with each lender, it’s easy to see why doing your own calculations is not recommended. An official pre-approval means that the lender has gone through your financial information and qualified you as a borrower. This will give you a more accurate idea of what your interest rate will be, as it will be based on your specific information as a borrower.
It’s always recommended to get pre-approved before you ever start looking at homes so you have a more realistic and accurate idea of what you can afford. In addition to saving money, it’s one of the most beneficial things you can do as a responsible buyer. The length of time it takes to get pre-approved will is usually no more than a few days once you have provided all of the supportive documents
Most mortgage pre-approvals and interest rate holds are guaranteed for a period of 3-4 months, which is why it’s recommended to start the process up to 120 days before you’d like to purchase a property. By taking care of this early you will be able to look at homes with more peace of mind and avoid the potential stress of dealing with offer negotiations at the same time.
Before filling out any paperwork, it’s important to gather financial documents that support your ability to afford a home. This may include paperwork proving income, proof and source of down payment funds, asset information, and liability information. In addition this, you will need to provide personal information such as your social security number or SIN number, so the lender can review your credit score.
How Do I Get Pre-approved for a Mortgage?
To get the pre-approval process started, you will need to speak with an experienced mortgage broker (or lender) who can help you. If you aren’t familiar with any professionals you can rely on, then ask your REALTOR® for recommendations. Once you meet with the mortgage broker ask them questions to help you learn more about their rates and programs. If you aren’t interested in interviewing different lenders, then go online and research banks or mortgage brokers.
...if you work with a real estate agent who doesn’t mention getting a pre-approval letter at all, then they may not have the expertise that’s so important in this type of profession.
While doing this research is pretty straight-forward, it’s important to keep awareness of lenders that make things seem “too easy”. If you speak with any lender that claims they can provide you with a pre-qualification letter without taking a look at your financials, do not go with them. Also, if you work with a real estate agent who doesn’t mention getting a pre-approval letter at all, then they may not have the expertise that’s so important in this type of profession.
How Much Mortgage Can You Afford?
With most buyers, there’s a considerable difference between what they think they can afford and what they actually can afford. Getting the mortgage pre-approval will point you in the right direction, as it will give you the best idea of what you can realistically afford. However, it’s important to be aware that some lenders approve buyers for less than they want to spend while others will approve buyers for more. This is when it’s important to be self-aware of your finances and what you’re genuinely comfortable with spending on this significant purchase.
The hard numbers you receive from the lender will be a great starting point that allows you to narrow down your search for homes. Knowing your price range will give you an idea of how many rooms you can afford, which area you might want to live in, and if you can genuinely afford what you want. For most people, this is when shopping for a home becomes more real and they can finally picture themselves as homeowners.
By taking the time to get pre-approved, you will ultimately be helping yourself avoid many pitfalls that first time buyers run into. For instance, knowing your financial position can help you avoid looking at (and falling in love with) homes that you simply cannot afford. When you’re ready to start looking, analyze the approval letter and monthly payment information provided by your lender. Once you’ve determined the maximum that you’re content with, the down payment and closing costs can be calculated so you can look at homes within your ideal budget. 
Obtain a Mortgage Pre-approval Letter
A pre-approval letter is contingent on you as the borrower keeping your credit score and finances the same until you close. This is why most lenders warn their clients against making large purchases or taking out new credit cards, as these types of transactions can affect their credit score and financial situation. As long as they do this, the pre-approval letter, FREE advice will play an important role in the buyingprocess. Sellers will appreciate the fact that a qualified buyer is looking at their home, and if you end up competing with another buyer, this could be what helps you secure the property. The pre-approval essentially shows that you are qualified and serious about purchasing.
Negotiate Better Terms & Price
One common and frustrating situation for sellers is dealing with buyers who aren’t qualified to buy their home. This wastes time because it generally results in the deal falling through and other potential buyers moving on. As a pre-approved buyer, sellers will appreciate the fact that you’ve proven your financial backing. Beyond that appreciation, this approval can act as a negotiation tool because you’ve already gone through the work of proving your ability to buy. This entices the buyer to negotiate with you, as they won’t have to worry that the deal will fall through because you won’t get approved for a mortgage.
Your pre-approval may also persuade the seller to accept your offer rather than a higher one from a buyer without the same approval. In addition to this, an eager seller may be willing to change their terms of the sale due to the fact that your purchase would be a done deal. With the pre-approval being such a strong negotiation point, it’s easy to see why top real estate agents request that their clients take care of this before they are shown properties.
Build Trust & Win Multiple Offer Situations
The real estate market is always changing, therefore you can never anticipate whether or not a home is going to attract offers from multiple buyers at the same time. However, it’s important to be prepared just in case this situation does occur. A pre-approval letter from your lender is just what you need, as this will make you stand out. Sellers see this letter as security, not only because you have proven that you can obtain financing, but also because you’ve proven that you’re serious about buying the property. As a result, you will be one of the top candidates they consider accepting an offer from.
Take Possession of Your New Home Faster
Finally your offer has been accepted; what next? If the home inspection turns out to not show any issues, then you’ll likely anticipate moving into your new home. While packing your bags is a great way to get started, there will be some waiting time before your new keys are in hand. Most of this wait time is the seller deciding whether or not to accept your offer, which will generally be minimized with your pre-approval letter. Even more beneficial is the fact that your bank will already have the paperwork and documents that are needed to approve the loan, so you can close on the home as quickly as possible.
To gain insight on what happens after your offer is accepted, the lender will need to have all your information in order to determine if you can afford the property. Having already done this legwork to get the pre-approval, your lender will be able to move on to requesting an appraisal on the property. Once everything is in order, you will finally be able to close on the home, likely without having to wait the 45-60 days that most average buyers do.
While choosing to get pre-approved for a mortgage is your decision, it’s a smart and beneficial move on your part. If you are serious about buying, it’s the very first move you should make. A top real estate agent will tell you the same thing, making it something you don’t want to wait to take care of.
Get Your REALTOR®’s Attention & Priority

Getting pre-approval for a mortgage is not something that is guaranteed. Even if you think your finances are in order and you’ll be approved for a specific amount, you won’t know for certain until you have that letter in hand. To avoid frustration and stress for you, your REALTOR
®, and the seller, don’t ask to be shown properties until you’ve taken time to get your pre-approval taken care of. Real estate agents want to spend quality time showing you potential homes you could buy, not homes you may only dream of living in.
If you get pre-approved for a mortgage, you will have the attention of your real estate agent if they are caught between deciding which client they can make time for. By showing that you are ready and able to buy, your real estate agent will know they aren’t wasting their time or yours by showing you properties.
Seller May Request Proof of Financing
There are many additional reasons, aside from time savings, why real estate agents request their clients obtain pre-approval before showing them homes. One of the most common is because the seller often requires it, as they don’t want non-qualified buyers walking through their home. This is most common with luxury real estate, although this seller preference is seen with budget-friendly homes as well. For these reasons, don’t take it personally when you are requested to have pre-approval done before you’re allowed to view a home.
An added benefit of having this done is that you’ll be in a better position to present an offer on a home that you would like to buy. Sellers take buyers who have pre-approval letters readily available much more seriously because they have shown their ability to pay. Without this, the seller would never know if you would be able to get financing for their home or if the deal with go through.
Establish a Laser Focused Search
You’re ready to buy and don’t want to waste time looking at homes that may be outside of what you can afford. By taking care of financing before you search, you’ll have an accurate idea of the amount you can spend on a home. This is due to the fact that your lender will analyze bank statements, pay stubs, your credit report, and all other necessary financial information to determine what you can borrow. With that information you can establish a much more accurate price range so you can search for homes you can afford with confidence.
One additional highlight of knowing your budget is the fact that you will be able to narrow down your options for properties. This will give you a limited selection to choose from so your search can be expedited. Another advantage of knowing how much you can spend is that you will be less likely to find properties you like but cannot afford. You will only see homes that fit in your budget so the entire buying process is overall more enjoyable and efficient.
Avoid Disappointment and Frustration
When you think about applying for a pre-approval, you may be intimidated by all that’s involved. From digging out your tax returns to proving your income, it can be a lot to take in at once. However, this shouldn’t be a reason to postpone doing the pre-approval until you actually find a home that you like. To avoid disappointment and frustration, you should embrace your inner-strength and put all of your documents together. Once you have done this, you’ll likely find that the process isn’t as intimidating as you thought it would be.
After the application is completed and you’ve been pre-approved, you will know exactly what your realistic budget for a home and taxes is. This means you won’t waste time looking at listings that are far outside of your budget, such as homes that cost $400,000 whereas you’re only approved for $350,000. Ultimately this saves you from disappointment when home buying, making it clear why real estate agents request you do this from the very start. By doing something as simple as applying for pre-approval now, you will do yourself a great service that will make shopping for a home easier down the road.
Interest Rate Increase Protection
Most pre-approvals for mortgages provide buyers with a 90-120-day rate guarantee to protect them in the event that rates increase when searching for a home. This essentially allows you to lock in a rate so you can shop for homes knowing you won’t see an increased rate surprise when you’re ready to buy. However, if interest rates decrease while you’re shopping, most lenders will honour that rate instead. If no other reason compels you to obtain a pre-approval, this “lock in advantage” may be just what does.
Final Thoughts

Buying a home is a huge financial decision and therefore should be treated with careful consideration. Real estate agents understand this, which is why they are likely to request their clients take care of this before they are shown homes. Walking through properties before doing so will be pointless as well as a waste of time for both you and your agent. If you are serious about buying, then prove it by obtaining your pre-approval as soon as you can. Once you know how much you can afford, you’ll find that buying a home is less stressful and you’re able to enjoy searching with confidence.

Tuesday, 16 August 2016

Low Rate Mortgages - A massive impact on your overall financial health

Landing up in the dream house at low rate mortgages is the ultimate aim for many. Getting the right deal at the right time can influence your financial situation in the near future. Before deciding to purchase a house, it is advisable to compare between the mortgage rates that are currently available in the market.
As market research suggests, the mortgage rates for the houses are at a historic low in the year 2016. Coming off as really good news for people planning to buy a house, it is high time that people start consulting the professionals and get their help before fixing the mortgage rate.

Landing up a low rate mortgage

Market experts, after thorough research have been stating that, it is a good time for people to start investing in real estates. They also state that, the rates might work in favour even if they wait for some time. All in all, the time is ripe for you to invest in the dream house that you have long wanted.
Before you decide how, here are few steps that you need to take before signing on the dotted lines for the mortgage deal.

  • Compare the rates that have been put forth to you
  • Make changes to your credit score to sell them up
  • Start saving up to increase the down payment you wish to pay
  • Decide upon the time period of your stay in the house

What are credit scores?

Credit scores of a person will give an overview of the financial worthiness of the person. Realtors, banks, credit card companies and lenders consider the credit score of the person before moving ahead to make a business with them. If they feel that the credit score of the person works well for them, they would consider dealing with them. Many of the mortgage brokers in Calgary have been emphasising the need for good credit scores for their clients. It has been well established that, if you plan to apply for a loan to buy the house, a good credit score would lead to affordable and better interest rates. Loan options tend to grow big with higher credit scores.

Debt-income ratio in mortgages

People who lend you money calculate what is called as the debt-income ratio. According to this, the mortgage lenders would be able to measure the capability of an individual to pay monthly instalments to repay the debts. This is done by taking in the annual and the monthly income of the individual. You would be able to land up with best rates mortgages if your debt-income ratio turns out to be good.

Getting the right mortgage broker

Getting affordable and better low rates mortgages to people have been the work of many of the mortgage brokers in Calgary. Anyone can advice you on choosing the mortgage rates but only a professional like Mymortgagepros can help you in getting the right mortgage rate for the house you have been looking for. Choose from the best brokers in Calgary if you wish to get down with this for a long time. Give a call and book and appointment for a free consultation.


Lower mortgage rates can be fixed only by the professionals and by those who are well versed with the system. Get the help of the best mortgage brokers in Calgary and ensure a safe future for yourself today.

The experienced mortgage brokers of MortgagePRO Ltd. have access both institutional and private lender funds for the leading edge in home financing and refinancing.
Call Us: 403-253-2022 or Email Us:

Friday, 29 July 2016

First time home buyers? Tips to protect from Contingencies and Disclosures

Buying a home is a dream for many. Getting the right house with the hard earned salary requires proper planning and guidance. One has to be really careful in making sure that they get the house for the money’s worth and has to finish many formalities in order to finalise the deal on the house. There are many forms of contingencies and disclosures that have to be in order to make sure that you do not spend money than it should be spent.

All the first time home buyers need to be extra cautious about the deals and the transactions. They are generally advised to get the help of the professionals who have some experience in the field. Since this deals with a lot of money, it is always better to get the help of some experienced person who would be able to guide you in finalising the deal after making sure that you do not face any threat from the disclosures or the contingencies that follows.

What are the contingencies and disclosures?

Contingencies are the set of deals that are struck between a buyer and a seller. This is called as the “If-Then” deals. For instances, the buyer would have a deal with the seller of the house that, “If” I am able to sell my current property, “then” I would buy the property from you. These are included in the purchase contract and some can be controlled and the others cannot be. Some common contingencies that have to be in order are:

  • Finances: This deals with the scenario where the buyer has to take steps to obtain finances for purchasing the property. If he/she fails to do so, then the buyer cannot be penalised in any way for being unsuccessful in qualifying for the home loan.
  • Home inspection: The seller might fix a price in the deal for the house, but the buyer must get the home inspected by a qualified home inspector to make sure that the deal is set right. All the repairs and remodelling the house needs would be verified here. 
  • Selling the current house: This contingency state that, the deal can be finalised based on the sale of the current house that the buyer has possession over. If the deal is unsuccessful, the seller can back out from the deal.
The Disclosures deal with the defects and the environmental hazards that the house might potentially have. The buyer must be thoroughly informed about the same before negotiating the deal.
Some common disclosures are:

  • Standard disclosures: In this, the seller provides a list of the items that might be missing from the house like the mechanical parts and other such major issues. The buyer must verify the whole list completely. 
  • Hazard zones: Few properties might have been built on zones that are prone to earthquakes, fires, floods and other natural calamities. The buyer must get the area checked for such cases.
  • Paint used: Seller must give the full detail about the composition of the paint that has been used. The buyer must be given a time of 10 days to conduct tests to check the lead composition in the paint.

These contingencies and disclosures are to be followed closely since a small mistake can lead to the loss of huge amounts of money.

The experienced mortgage brokers of MortgagePRO Ltd. have access both institutional and private lender funds for the leading edge in home financing and refinancing.
Call Us: 403-253-2022 or Email Us: