Denise D Knows Mortgages, 2-5757 Kennedy Road, Mississauga, ON (2026)

01/26/2022

Bank Of Canada

The first Bank of Canada announcement of 2022 is scheduled for this Thursday January 26th 2022.

The outcome from today's decision is:

The Bank of Canada has kept the current overnight rate at 0.25%. This means, if you have a variable rate mortgage, there is no change to your payments.

Here are the remaining 2022 dates when the Bank of Canada meets this year to provide updates.

Wednesday, March 2

Wednesday, April 13*

Wednesday, June 1

Wednesday, July 13*

Wednesday, September 7

Wednesday, October 26*

Wednesday, December 7

Snapshot Update:

Variable Rates

It is safe to say variable rates will rise. If you are in a variable mortgage, let's discuss preparing you for a rate increase and your pre-payment options to make additional payments to your mortgage.

Fixed Rates

Fixed rates have started to increase close to 3%. Rising bond yields often lead to a rise in fixed mortgage rates, as of today the bond yields are sitting at 1.61% and are forecasted to be at 1.80% at the end of 2022. We most likely will see additional increases in the 5-year fixed mortgage rates.

See the resources below for more information and reach out to review your mortgage financials in detail.

Happy to connect - [email protected]

https://tradingeconomics.com/canada/5-year-note-yield

https://www.cp24.com/news/bank-of-canada-keeps-key-interest-rate-target-on-hold-1.5754888

https://www.bankofcanada.ca/2021/07/bank-canada-publishes-its-2022-schedule-policy-interest-rate-announcements-release-monetary-policy-report-other-major-publications/

09/27/2021

New as of September 30, 2021 is the National Day for Truth and Reconciliation holiday for federally regulated employees.

It is a new statutory holiday held to commemorate the legacy of residential schools fulfilling one of many recommendations made by the Truth and Reconciliation Commission.

This is not a public holiday. Only federally regulated workplaces (such as the federal government, banks, post offices, etc.) will be closed.

If you have an upcoming real estate/mortgage closing for September 30th, 2021, speak with your Real Estate lawyer for clarification as it applies to your situation.

For additional information, please reach out at [email protected]. Happy to help you with your mortgage financing needs!

https://www.statutoryholidays.com/september30-holiday.php

https://www.thestar.com/life/homes/advice/2021/08/04/the-new-holiday-on-september-30-will-affect-real-estate-purchase-and-sale-closing-dates.html

07/06/2021

The Federal housing agency, Canada Mortgage and Housing Corporation has returned to last years servicing ratio's as of today:

Gross debt service ratio up to 39% and a Total debt service ratio up to 44%.

Last year, the gross and total debt ratios were reduced to GDS 35% and TDS 42%. This decreased a borrower's purchasing power making it more difficult to secure more funding for buyers.

Take a look at the following link for more info and reach out to [email protected] to review your mortgage financing needs today!

https://lnkd.in/eTCK94M

05/28/2021

As of June 1st 2021, both insured and uninsured mortgages will be qualified using the new stress test rate of 5.25%. Previously, it was 4.79%.

This does not dictate the rate you will get, which your mortgage payments will be calculated on.

This rate will only impact the dollar amount you can purchase. The actual rates of lenders we work with are still extremely competitive.

To find out what you qualify for, for your upcoming renewal/refinance or purchase, please connect with me at [email protected].

03/15/2021

Let's define the mortgage word: Term

A mortgage term is the length of time over which the borrower is agreeing to abide by the conditions of the mortgage.

During this period, the legal parameters of the mortgage are in effect – interest rate, pre-payment restrictions, etc. At the end of the term, the borrower can pay off the remaining balance of the mortgage, renew it, refinance it or switch lenders.

A mortgage term can generally range from 6 months to 10 years, with 5 years being the most common term length. Mortgages with terms of three years and less are considered a short-term mortgage, while mortgages with a term of five years or more are classified as a long-term mortgage.

A mortgage term is different from the mortgage amortization, which is the period of time it will take for the mortgage balance to be fully paid off.

A mortgage term is normally less than the mortgage amortization, unless the borrower is close to paying off the mortgage.

For more information on what might be the best mortgage term for you, reach out today!

03/01/2021

Let's Define Two Terms: Title and Deed

The land registration system contains official records of land and property in Ontario. Title is a legal term for the land rights held by a person or corporation.

Deed, is a term used for the legal document that transfers title from one person to another regarding mortgage(s) and other land documents.

What is the difference?

A deed is an official written document declaring a person's legal ownership of a property, while a title refers to the concept of ownership rights.

A property deed transfers property ownership from a seller/grantor to a buyer/grantee. It contains a description of the property (including property lines) and the seller/grantor and the buyer/grantee.

A title is a legal right to ownership of a property, including the right to sell. The legal purchase of a house transfers the title to the buyer.

Do you need information about your property ownership? Reach out today, happy to help!

02/22/2021

Let's Define the Term - Collateral Charge

Last month I defined the term Standard Charge - as a recap:

A standard charge is registered on title in a document that includes the important terms of your mortgage loan.

It may also be referred to as a traditional, conventional, or non-collateral charge.

A standard charge only secures the mortgage loan that is detailed in the document, and not any other loans you may have with your lender, such as a line of credit.

A Collateral Charge:

A collateral mortgage is a re-advanceable mortgage product. Your lender can lend you more money as your property value increases without having to refinance your mortgage.

The lender registers your home with a collateral charge and has the ability to do so for a higher amount than the mortgage loan amount you need.

By registering the home with a collateral charge, you can then borrow money from your home, without having to refinance your mortgage.

This makes future borrowing from your current mortgage lender easier and cheaper, as you would then be able to avoid the legal fees incurred by having to hire a real estate lawyer to help you through a refinance.

Reach out today for clarification on more mortgage terms!

02/12/2021

Top Challenge for the Week - Can I afford an Investment property?

I have a client that is looking to upgrade to a larger home, but is considering not selling his current home and keeping it as an investment rental.

Denise, will I qualify?

My client wanted to begin his house hunt quickly. I confirmed with his current lender that he could put down 5% towards his new purchase, but the Insurers would allow that 5% down up to the first $500,000 of the purchase price. The remaining balance would require 10% down.

Ex. $900,000 purchase price
$500,000 x 5% = $25,000
$400,000 x 10% = $40,000
Total down payment required = $65,000

My client could use his down payment from his current home equity line of credit, which would be considered his own resources.

100% of his rental income would also be used for him to qualify.

Each lender has different rental requirements and calculations. For more information on how this is reviewed and options for your own investment property financing - contact me today!

02/10/2021

Simplifying Mortgages - Investment Property Financing

What are your mid to long term investment goals? Buying one property or several? In the next year, five years, or longer? You’ll need to have a good idea of your goals before seeking financing.

Credit

Check your own credit and see how your credit looks. A credit score of at least 680 is the minimum you should aim for.

Proof of Income

If you are a salaried employee - you will need a recent letter of employment and pay stubs.

Self-employed, or if commission income - your most recent 2 years Notice of Assessment and possibly T1s and/or Financial Statements for your business, as well as proof of business such as business registration.

Proof of Down Payment

Generally, at least 20% of the purchase price of the investment property.

Closing Costs

You will need to show at least 1.5% of the purchase price in closing costs to the lender.

Existing Property Details

If you have other properties, you will need to provide the lender with mortgage statements and property tax statements for all of them, as well as lease agreements if they’re rented.

For more tips on financing for investment properties, contact me today - Happy investing!

02/01/2021

Let's define the term: Statement of Adjustments

The statement of adjustments is a document prepared by the seller's lawyer.

It details the purchase price, deposit amount and financial adjustments needed for prepaid taxes, utilities or condo fees. When these calculations are final, you know exactly how much to pay the seller on the closing date.

Its goal is to ensure that all the financial obligations of the transaction are accounted for and clear to both the buyer and the seller.

It balances the credits to the seller and the credits to buyer, outlining where all of the money went.

Statements of Adjustments are like a financial worksheet. It is an important document to understand how funds are is allocated.

For more information on how Statement of Adjustments are detailed and what info is outlined, contact me today!

01/29/2021

Top Challenge for the week - Why am I unable to refinance?

I have a client that has been getting behind on some bills. He wanted to use his home equity to consolidate debt, but received a decline from his current lender to refinance. What happened?

Let's discuss three reasons why banks may not refinance:

1. Lack of Equity

You may not have enough equity in your home. Your loan to value ratio "LTV" may be too high. Generally declines are given to LTV ratios above 80%.

2. Credit Score too Low

Banks consider credit scores with solid reporting around 680 or above. Lower scores with credit blemishes cause concern.

3. Insufficient Income

Your income will need to carry your new mortgage amount and payments. Insufficient income could decline your refinance application.

Penalties:

Refinancing is a great way to consolidate debt, but you'll face penalties to refinance before your current mortgage term has expired.

The more time you have remaining on your current term, the stiffer the fees for breaking your mortgage.

Work with a mortgage professional and weigh the pros and cons before making a decision. There are mortgage financing options available.

For more tips on refinancing your mortgage, reach out today!

01/27/2021

Simplifying Mortgages - Covering the Basics

Let's cover five most common questions about mortgages to help simplify the process.

1. What is a mortgage?

A mortgage is a home loan secured by real property, referred to as real estate.

2. What happens if I don't pay the mortgage?

In Canada, the lender will generally start a power of sale process. This is a legal process that requires the lender to take control of the property through the court system.

3. How does the bank calculate how much I can afford?

Lenders use two ratios called TDS and GDS.

Gross Debt Service calculates the total of your property cost, interest, taxes, and heating and condo fees (if any). It should not exceed 35% of your monthly income.

Total Debt Service is GDS plus other obligations (such as line of credits, car loans, etc). TDS should not exceed 42% of your total monthly income.

4. What is a mortgage rate hold?

A rate hold is when a lender or mortgage broker holds the rate for you. It is not a pre-approval.

5. I have an approval. Can I go buy furniture?

No! A mortgage approval doesn't mean that the lender will guarantee the mortgage will be funded. Keep everything the same until closing.

Need more tips? Contact me today!

Denise D Knows Mortgages

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