All posts by That Mortgage Man

All-in-one mortgage accounts & the benefit of putting your debt in one pot

The whole premise seems geared toward keeners.

All-in-one mortgage accounts – a kind of mortgage account that acts like a big line of credit – seem aimed at the kind of borrower who uses every trick available to pay off the mortgage quickly, the type who can play an online mortgage payoff calculator like piano keys.

Sounds like you?

Continue reading here…… Story via The Globe and Mail

As always never hesitate to give me a shout if you have any questions, I’m here to help 🙂

5 Ways To Boost Your Credit Score

I have spoken about credit a lot. It is one (but not the only) important piece of your mortgage puzzle. What can hurt you score, cant often times be more obvious than what can be done to help. Today I’m talking about the five things that you can do to improve your score, because the little number follows you whether you like it or not!

  1. Bring, and keep, your open accounts current. The most important part of your FICO score is a history of on-time payments. If an account becomes 30 days past due, you can lose a lot of points. It is much more important to bring and keep open accounts current than to handle old collection items of closed accounts.
  2. Reduce your credit card utilization. Utilization is defined as the percentage of your available credit that you are using. To calculate your utilization, divide your statement balances by your credit limits. If you have $10,000 of available credit and have a $1,000 balance, your utilization rate is 10%. According to data from Experian Decision Analytics, people with the best credit scores (above 780) have a utilization rate of 5.6%.

Continue reading…..

Story via Forbes

What to know about getting a U.S. mortgage

You have made the big decision as a Canadian, you have hung up your skates and your tired of battling the snow and frost all winter! You have dreamed of having a “home away from home” but too far away from home….

Although Canadians and Americans share the same continent, live across from one another on the world’s longest undefended border and speak, mainly, the same language, there is one undeniable geographical advantage that the United States possesses in abundance: year-round warm weather locales.

This has led many Canadians to think about buying a property in a U.S. hot spot.

There are many mortgage pros and cons on top of the exchange rate…. to learn the more continue reading here.

How a simple credit error can ruin your home-owning dream

Imagine the anxiety of watching your credit score unexpectedly plummet after spending your entire adult life maintaining good credit.

Now suppose this credit decline blocks you from getting a mortgage on the house you planned to buy.

That’s precisely what happened in this story, and it happens to mortgage applicants all across the country with surprisingly frequency.

All too often the culprit is unpaid phone bills. In this case, his cellphone provider sent the account to a collection agency after being just more than a month late on its cancellation fee. That caused his credit score to drop like a lead pickle, approximately 80 points (out of a theoretical 900) virtually overnight.

It never should have happened that way. Collections are meant for people who can’t or don’t want to pay their debts. But sometimes, for one reason or another, people honestly don’t know they’ve missed a payment. Reputable creditors make bona fide efforts to contact debtors for payment before taking this extreme measure. That didn’t happen here.

As a mortgage broker, I see this time and again. For most borrowers, it’s just a simple oversight. But as this case shows, an unnoticed cellphone charge can spell credit-score disaster. By the way, I learned the hard way that when you cancel your account, some phone providers stop automatically billing your credit card and e-mailing you outstanding charges. How thoughtful of them……

To continue reading & find out how to avoid credit drama just like this, click here (story via Globe & Mail)

How to get a mortgage (when your not the ideal borrower)

If you’re a credit-worthy employee at a Fortune 500 company and don’t have much debt, the mortgage world is your oyster. Banks knock on your door looking to give you the best rates, most advantageous terms and any other perks they can use to get your business. You’re an A-lister. A borrower with impeccable credentials.

But what if you don’t quite fit that pic? It doesn’t mean you’re out of luck, it just means you have to learn how to work the system in your favour.

Truth: You can get a mortgage if you’re self-employed, got a poor credit history, or if you own more than three rental properties……

To help you, here is a list of some of the most common B-class borrower hurdles and the best ways to minimize the risks and get better mortgage rates and terms.

Have a read & as always, if you have ANY questions, never hesitate to get in touch.

What Is A Mortgage Refinance, In Plain English

what-is-a-refinance

How Does Refinancing Work

Refinancing works by giving a homeowner access to a new mortgage loan which replaces its existing one. The details of the new mortgage loan can be customized by the homeowner, include the new loan’s mortgage rate, loan length in years, and amount borrowed. Refinances can be used to reduce a homeowner’s monthly mortgage payment; to take cash out for home improvements; and, to cancel mortgage insurance premiums, among other uses.

What Is A Mortgage Refinance?

A mortgage is a loan used for real estate. They’re available via banks, credit unions, and online lenders. Hundreds of billions of dollars worth of mortgage loans are given each year.

But, mortgages aren’t one-size-fits-all. Mortgages can be customized.

For example, you can choose the number of years in your loan (i.e. term); you can choose the nature of your interest rate (i.e. fixed-rate or adjustable-rate); and, you can even choose what you pay in mortgage closing costs.

Your needs as a homeowner today, though, may be different from your needs tomorrow. In the future, you may not like mortgage terms you created for yourself.

Thankfully, there’s an option to change your mortgage loan terms. It’s known as a “refinance”.

To refinance your home means to replace your current mortgage loan with a new one. Refinances are common whether current mortgage rates are rising or falling; and you can get one from any lender you choose.

You’re not limited to working with your current mortgage lender.

Some of the reasons homeowners refinance include a desire to get a lower mortgage rate; to pay their home off more quickly; or, to use their home equity for paying credit cards or funding home improvement.

Refinances typically close more quickly than a purchase mortgage loan and can require far less paperwork.

If you have more questions about this article (or anything else) NEVER hesitate to get in touch, I’m happy to help 🙂

Why The Big Short Won’t Happen In Canada

Now that the wifey and I are empty nesters we get to all kinds of things we have never done before, like watch a movie, uninterrupted! After watching the recent Academy awards show (her choice btw) naturally my pick for movie night The Big Short. Great blockbuster that tries its best to explain why banks needed bailouts and homeowners found themselves in foreclosure with the U.S. market crash in 2008. If you’re worried that we’re next for a ‘Big Short’ in Canada, you can relax…..

Click here to read more about why the BIG SHORT won’t happen in Canada! 

 

Banks don’t provide proper pre-qualifications. Mortgage brokers do!

Mortgage tip of the week & food for thought for those who are considering house hunting…

Before you run to the MLS listings, talk to a mortgage broker. First time home buyers should confirm their eligibility to purchase through a mortgage pre-approval in conjunction with their real estate agent. Mortgage brokers ensure FTHB’s are pre-approved prior to searching for property so a REAL budget is established and a pre-approval rate hold is tied down. If the client is already working with a realtor, that realtor can rest assured that the client is motivated, and looking in their appropriate price range. It saves all 3 parties involved a lot of time, and headache. A mortgage broker can be considered more valuable in this regard, as banks do not provide proper pre-qualifications based on a full application or review of documents, simply put, it leaves room for error.

If you have any questions NEVER hesitate to get in touch & stay tuned for more tips :

Strata Corporations: The Good, The Bad & The Ugly

Spring is starting to bloom and many prospective house hunters are starting to prowl the neighborhoods in search for “the one”.

If you’ve ever thought about buying a new townhouse, apartment style condo or high-rise – you’ve probably run into the concept of a strata corporation. What does that really mean for the home owner though – and is it right for you?

This is by no means a comprehensive guide, just a few things to chew on if you’re considering buying into a home that has a strata corporation attached to it.

First of all, a strata corporation is not an arms length organization – it is made up of the owners – of which you’ll technically be one. Several residents are elected to manage the business of the strata on behalf of all owners. This includes paying bills, collecting fees, handling repairs and dealing with any issues that may come up.

Before we get into it, let’s talk strata fees. Some people look at these fees as paying “rent” on top of owning property. In reality, they’re so much more.

Continue reading…….

Story via the www.realestaterookie.ca

Final countdown to down payment rule change is on!

In a previous post I outlined the broad strokes of the reason for  the change. As the deadline creeps closer (Feb.15) I figured it was time for a refresh.

Currently the minimum down payment for all home buyers when purchasing a home under $1,000,000 is 5%. All mortgages that are less than 20% down are required to have High Ratio Insurance.This is mandated protection for the lenders when providing a mortgage greater than 80% of the home’s value.   This all changes effective February 15th, required down payment on homes valued over $500,000 will rise to 10% from 5% on the amount over $500,000.

So, what does this mean?  Once the new rules are implemented, someone looking to purchase a $750,000 home would be required to have a down payment of at least $50,000.  Example: Based on the $750,000 purchase price the calculation would be as follows:  5% of $500,000 = $25,000 and 10% of the remaining $250,000 = $25,000 for a total of $50,000.

Down payment rules for mortgages on properties selling at $500,000 or less will be unchanged.

The new rules represent the greatest change to the housing finance market since 2012. However, unlike past changes that have been aimed at the entire Canadian housing sector, the Liberal government indicated the new rules, which affect higher-priced properties, are mainly targeted at the most expensive markets. The Department of Finance has provided information on the upcoming changes in these FAQs on their website.

If you have been on the fence about investing in a new home, now may be the time to move forward. Qualified borrowers who get approved before February 15, 2016, can still buy with only 5% down.