Davis Thurber - Mortgage Broker

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Canada
Montreal, QC
Davis Thurber - Mortgage Broker

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I am here to find the best financing solution for you.

04/22/2024

How High Net Worth people can qualify for a mortgage on their personal residence using little to no qualifying income.

Also an explanation about how a Sliding Scale works in regards to mortgage amounts.

07/13/2023

I think ....

06/20/2023

Sure, it’s not ideal that mortgage rates have more than doubled over the last little while, but just because the rate right now might be more than twice what it was when you signed your mortgage, that doesn’t mean that you’ll have to pay twice as much for your mortgage when you renew.

Let’s say you signed a conventional (uninsured) mortgage for $500k with a 2.74% interest rate and a 3 year term. It’s now 3 years later, and you need to renew. You likely have an amortization period of 25 years, which would mean that your monthly payments are probably $2,300 / month.

Today your rate for the same mortgage is likely close to 5.29%. What’s your payment?

The amount you need to repay now is not $500k. It is likely $456,356.

With a 25 year amortization, your monthly payments will now be $2,729,43. That’s a difference of $429 / month.

We are starting to see banks allow amortization of 30 years. Usually it comes with an increase of 10 basis points on the rate, so 5.39% instead of 5.29%.

This would make your monthly payment: $2,542.80 … a difference of $242.80.

Granted this means that you would pay more interest over the next 3 years and your mortgage would not be paid off as fast as you initially thought, but life is a constantly changing animal, and sometimes solutions that keep us in the community we are currently in are better than worrying about what might happen in the future.

I'm here to help you with your calculations and planning when you need it.

06/13/2023

All too often people think that because they have a downpayment of 20%, they’ll be able to purchase whatever property they want. Or they think that they’ll be able to refinance their current property at up to 80% of its value.

This is just wrong.

Banks ultimately want to know 3 things:

1) Will payments be made? Will the client be able to make the payments every month for the duration of the mortgage?

2) Is the bank protected? Meaning, if something goes wrong, will the bank be able to get all of their money back?

3) Is everything legit? Meaning … Is this a real transaction? Does the money come from a trusted source that they can track? Are the people requesting the mortgage actually who they say they are?

For payments, if you have $200k to buy a property worth $1m, but you are only showing that you earn $50k on your tax returns, and you have no businesses that generate other income, the banks won’t trust that you’ll be able to make the payments every month.

For protection, banks like mortgages and transactions that are insurable. When refinancing, you’ll never be able to get a mortgage insured, and that’s one of the reasons why many banks don’t want to go above the 65% - 70% threshold loan to value. And for purchases, many banks are actually at a higher rate for their mortgages with 20% down than they are if you are only putting 5% down because the cost to insure a mortgage with 20% down is cost prohibitive. But at 5% down, and with the help of the government, mortgage insurance is worth it, and it takes away the bank’s risk in the event of a default.

For legitimacy, well … there’s so much fraud in the industry, banks are covering their tracks big time.

Let me know when you need some help!

06/06/2023

Car loans essentially kill your Total Debt Service (TDS) ratio.

Banks look at TDS when they are deciding whether or not to approve a mortgage. They take the total amount of payments the client is committed to for the month (including the future mortgage, taxes, and condo fees), and they divide that by the amount the client makes each month. That percentage at the most lenient A banks cannot exceed 44%. And even if it doesn’t exceed 44%, sometimes the loan won’t be approved.

Some banks will accept a certain type of income, while others won’t. Or they will only accept a portion of that income. And some banks will favor certain types of professions, while others won’t. The qualifying income and professional employment subject is for a different post though.

Here’s how a car loan kills TDS. Let's say you are a salaried employee who makes $84,000 a year…$7,000 / month. If you have a car loan of $600 / month, that car loan represents 8.6% of your monthly income. That means in the bank’s eyes, instead of having the max potential for 44% TDS for your mortgage, you have now lowered that capacity to 35.4%. Let’s assume you have no other debt...only have the car loan. And, we'll say the school and municipal taxes on the property you want to by are $4,800 combined / year (400/month), and the condo fees are $240 / month. This lowers your capacity for the mortgage by another $640 / month…usually only half of the condo fees are considered in this calculation. This lowers your capacity by another 9.1% bringing your percentage down to 26.3%. This means the maximum amount you can possibly pay for your mortgage is $1,841 (26.3% * $7,000). In this day and age, that is likely around a $300,000 mortgage. And again, that is assuming you have no other debt. As soon as you add a credit card balance into that mix, as well as a personal line of credit, or a furniture loan, the qualification amount starts to plummet.

My biggest tip for having a car, getting a loan, and not having it affect your TDS is to own/lease that car through a company you own. If you have a side hustle, consider opening a numbered company (1234-5678 Quebec Inc) and running your income through there. If you show some kind of profit through that business, many car dealers will extend that entity the loan. The reason this is a good idea is because it keeps the amount of the car loan off your personal balance sheet, and away from the TDS calculation. What’s more, many times the income from the side hustle that you are working on will not qualify as legitimate income from the A banks anyway, so you aren’t losing out.

If you have questions, or want help with this, I’d be happy to answer them and point you in the right direction.

05/31/2023

What’s your best rate?

I get this question all the time. It’s like asking, “What’s your best tool?”. Both questions show a lack of understanding about the job at hand. You wouldn’t want to (and likely couldn’t) use a screwdriver to cut a 2x4. And depending on what you are doing and where you are, there may be some cutting options that are better than others to do the job on that 2x4.

And just like the tool question, there are so many factors that go into determining what the best rate for _you_ might be. To name a few: What category do you fall into? What is the mortgage for (primary home, investment, 2nd home, a piece of land?) How long do you plan to own the property? Do you want a line of credit attached to the mortgage?

A good broker is going to be your partner in the transaction. And in order to give the best advice possible, they need to ask you what might seem like a thousand questions. It’s for your own good and your own protection.

At the end of the day, the rate that you see advertised on a daily basis, may not be the rate for the product that best suits your situation, and you also may not even have access to that rate given your situation.

What matters is that you get the best product for your situation, that you are well informed about the different options out there, and that you get the loan you need.

Contact me if you need some help.

Adresse

Montreal, QC

Téléphone

+15146776093

Site Web

http://DavisThurber.com/

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