Purchasing a New Property
Now that you've found your dream home, where should you begin? With a staggering array of home financing options, including banks, credit unions, private lenders, and monolines, the process can be challenging. Fortunately, in today's digital age, securing a home purchase mortgage is relatively straightforward. However, if you're a first-time buyer or even an experienced homeowner, comparing rates can feel overwhelming.
The great news is that I am here to tailor a customized mortgage to align perfectly with your unique financial needs, goals, and budget.
Pre-Approval
A mortgage pre-approval plays a pivotal role in the home buying process for several compelling reasons:
Rate Lock: With pre-approval, your mortgage interest rate is guaranteed for up to 120 days with some lenders. Even if interest rates rise during this period, your rate remains secure. If a more favorable rate becomes available in the interim, you automatically benefit from the lower rate. It's a win-win situation, providing you with financial peace of mind.
Budget Clarity: Pre-approval provides clarity on the mortgage amount you can borrow to purchase your home. This valuable information empowers your real estate agent to show you properties within your specific price range, saving you time and streamlining your home search.
Sellers' Preference: Sellers tend to be more inclined toward offers from buyers who have already secured their financing. Having your pre-approval in place demonstrates your seriousness as a buyer and can give you a competitive edge in the real estate market.
We understand the significance of a Mortgage Pre-Approval. It not only provides you with a clear picture of your mortgage payments and affordability but also saves you valuable time when searching for your new home. Let us guide you seamlessly through the pre-approval process, ensuring you make informed decisions on your home purchase journey.
Refinancing
Refinancing your mortgage can be a smart move, offering the potential for a lower interest rate and more affordable monthly payments. Various life and economic events, among others, often lead people to contemplate mortgage refinancing. These include:
Tapping into Home Equity: Homeowners may seek to access the equity n their homes by refinancing, allowing them to take out cash for various purposes.
Debt Consolidation: Many individuals prioritize debt reduction as a key step toward financial well-being. Consequently, debt consolidation refinancing is often at the forefront of considerations when exploring mortgage refinancing.
Decreased Mortgage Interest Rates: When mortgage interest rates drop, it's an opportune time for homeowners to explore refinancing options.
Improved Credit Score: As your credit score improves over time, you may become eligible for substantially better mortgage rates, making refinancing an attractive option.
For many, addressing and paying off debt is a top financial priority, making debt consolidation a primary consideration when contemplating mortgage refinancing.
Renewal
When your mortgage term is nearing its end, it's time for a renewal. This opportunity allows you to renegotiate the term, the amortization, and the interest rate for your mortgage. However, a common mistake homeowners make is sticking with their current lender and accepting the initial offer presented. More often than not, this initial offer may not be the most competitive interest rate. Most banks do not automatically provide you with the best rate, so it's crucial to explore the market.
Ready to renew? We have over 30 lenders competing for your business, including banks, credit unions, monolines, and private lenders.
You should also consider restructuring your mortgage to pay it off years sooner, saving thousands in the process.
Upon renewal, you can take advantage of a straightforward mortgage transfer process and receive a comprehensive mortgage assessment to secure the lowest possible rate available.
Banks are aware that mortgage renewals can be time-consuming, and many customers may not closely monitor interest rates. It’s important to avoid settling for the first offer from your bank. I am dedicated to saving you money, and my proactive approach involves vigorous market shopping to find the ideal product that suits your needs, complete with the lowest interest rate available to you. When your mortgage is due for renewal, remember that there are no legal fees associated with switching lenders (not applicable to collateral mortgages).
Since the majority of our partner institutions focus exclusively on mortgage lending, they dedicate 100% of their time and effort to the mortgage market as well. This commitment is essential in providing the interest rates and service quality you deserve.
Many prospective home buyers express interest in purchasing homes that require some renovation work. However, the challenge often lies in not having readily available funds to carry out these necessary improvements. Fortunately, certain mortgage providers offer a solution by allowing homebuyers to borrow additional funds specifically for facilitating these much-needed renovations.
Purchase Plus Improvement Program
Homebuyers can borrow up to 10% of the_
_post-renovation value of their home under the CMHC Improvement program. For example, if your planned renovations are expected to increase the home's value by $30,000, resulting in a post-renovation value of $330,000, you could borrow up to $33,000, which amounts to 10% of the home's post-renovation value ($330,000 x 10%).
The process involves several key steps:
- Obtain a Contractor Quote: Before proceeding with an improvement mortgage, you must have a written quote from a contractor outlining the intended work on the property.
- Approval of Work: Both CMHC and your lender must approve the scope of work you plan to undertake on the property.
- Contractor Inspection: Your offer should include a stipulation allowing your contractor to examine the home.
- Funds Held in Trust: Once the home purchase has closed, the lender disburses the funds allocated for renovations to your real estate lawyer, who holds them in trust.
- Release of Funds: These funds are released only after an appraiser, sent by the lender, confirms that the renovations have been completed satisfactorily. At this stage, your lawyer releases the funds to you, enabling you to pay the contractor.
However, since the money is tied up until the work is finished, you should have an alternate source of funds for a deposit or progress payments to your contractor. For this reason, you may want to consider securing a line of credit to cover these interim costs.
It's important to note that not all renovation projects will receive approval:
While you may have specific renovations in mind, some may not be approved by your lender or CMHC. Typically, approved improvements should be substantial and involve the structure of the property, such as installing a new kitchen. Projects like adding a basement apartment or replacing a furnace are less likely to receive approval.
Purchase Plus Improvement Program
Homebuyers can borrow up to 10% of the_
_post-renovation value of their home under the CMHC Improvement program. For example, if your planned renovations are expected to increase the home's value by $30,000, resulting in a post-renovation value of $330,000, you could borrow up to $33,000, which amounts to 10% of the home's post-renovation value ($330,000 x 10%).
The process involves several key steps:
- Obtain a Contractor Quote: Before proceeding with an improvement mortgage, you must have a written quote from a contractor outlining the intended work on the property.
- Approval of Work: Both CMHC and your lender must approve the scope of work you plan to undertake on the property.
- Contractor Inspection: Your offer should include a stipulation allowing your contractor to examine the home.
- Funds Held in Trust: Once the home purchase has closed, the lender disburses the funds allocated for renovations to your real estate lawyer, who holds them in trust.
- Release of Funds: These funds are released only after an appraiser, sent by the lender, confirms that the renovations have been completed satisfactorily. At this stage, your lawyer releases the funds to you, enabling you to pay the contractor.
However, since the money is tied up until the work is finished, you should have an alternate source of funds for a deposit or progress payments to your contractor. For this reason, you may want to consider securing a line of credit to cover these interim costs.
It's important to note that not all renovation projects will receive approval:
While you may have specific renovations in mind, some may not be approved by your lender or CMHC. Typically, approved improvements should be substantial and involve the structure of the property, such as installing a new kitchen. Projects like adding a basement apartment or replacing a furnace are less likely to receive approval.
Home Equity Line of Credit (HELOC)
A HELOC provides an alternative means of borrowing, leveraging your home's equity as collateral to offer you a flexible source of credit. With a HELOC, you have the freedom to determine how much credit and when you will need it, and you can repay it at your convenience without any penalties. Unlike traditional loans, HELOCs offer unmatched flexibility. Once approved, you can access your line of credit whenever you wish, for any reason, and for any amount within your approved limit. In contrast, traditional loans require a new application with each request for additional funds.
HELOCs boast low-interest rates, some as competitive as Prime Rate +0.5%, making them a cost-effective alternative to credit cards and personal loans.
We have access to a diverse portfolio of Canadian lenders who offer a wide array of home equity products tailored to suit your unique financial needs, including the following:
First Position uninsured HELOCs: These can cover up to 80% of your home's appraised value.
Second Position Equity Lines of Credit: These lines of credit can also extend up to 80% of your home's appraised value.
Reach out to learn more about the financial flexibility and cost-effective borrowing options available to you through our comprehensive range of HELOC products.
New to Canada Program
Securing a mortgage in Canada can be a straightforward process for citizens. However, for newcomers who have recently relocated and are not yet citizens, qualifying for a mortgage may be possible. However, the process may involve great documentation and requirements.
Several factors determine the type of mortgage available to newcomers in Canada, which include:
- Permanent Residency: Whether you hold permanent residency status.
- Down Payment: The total amount of your initial down payment.
- Credit Score: Your creditworthiness to lenders.
In essence, there are five different scenarios that newcomers might encounter when applying for a mortgage. Let's explore these scenarios:
- Permanent Resident with Strong Credit and 5% or More Down Payment: This is the most favorable scenario, where you qualify for a regular mortgage, just like any Canadian citizen.
- Permanent Resident with 5% or More Down Payment but Weak Credit: While not ideal, you may still qualify for the New to Canada Program offered by the three mortgage default insurance providers.
- Non-Permanent Resident with Application Submitted, Valid Work Permit, Good Credit, and 5% or More Down Payment: In this case, you can secure a regular mortgage even without permanent residency.
- Non-Permanent Resident with 10% or More Down Payment: Regardless of your credit score (which can be good, fair, or weak), you may qualify for the New to Canada Program.
- Non-Permanent Resident with Less Than 10% Down Payment: This is the one scenario where obtaining a mortgage may not be possible. To be eligible for the New to Canada Program, newcomers who don't qualify for a regular mortgage may still demonstrate good credit through various means:
- Consistently using and fully paying off a credit card
Making on-time payments for loans - Timely payment of all bills, such as cell phone and utility bills
While the home financing process for newcomers to Canada may be more complex and demanding, various pathways exist based on your immigration status, creditworthiness, and down payment.
Understanding your specific situation and working with a mortgage broker can help you navigate these options effectively.
New to Canada Program
Securing a mortgage in Canada can be a straightforward process for citizens. However, for newcomers who have recently relocated and are not yet citizens, qualifying for a mortgage may be possible. However, the process may involve great documentation and requirements.
Several factors determine the type of mortgage available to newcomers in Canada, which include:
- Permanent Residency: Whether you hold permanent residency status.
- Down Payment: The total amount of your initial down payment.
- Credit Score: Your creditworthiness to lenders.
In essence, there are five different scenarios that newcomers might encounter when applying for a mortgage. Let's explore these scenarios:
- Permanent Resident with Strong Credit and 5% or More Down Payment: This is the most favorable scenario, where you qualify for a regular mortgage, just like any Canadian citizen.
- Permanent Resident with 5% or More Down Payment but Weak Credit: While not ideal, you may still qualify for the New to Canada Program offered by the three mortgage default insurance providers.
- Non-Permanent Resident with Application Submitted, Valid Work Permit, Good Credit, and 5% or More Down Payment: In this case, you can secure a regular mortgage even without permanent residency.
- Non-Permanent Resident with 10% or More Down Payment: Regardless of your credit score (which can be good, fair, or weak), you may qualify for the New to Canada Program.
- Non-Permanent Resident with Less Than 10% Down Payment: This is the one scenario where obtaining a mortgage may not be possible. To be eligible for the New to Canada Program, newcomers who don't qualify for a regular mortgage may still demonstrate good credit through various means:
- Consistently using and fully paying off a credit card
Making on-time payments for loans - Timely payment of all bills, such as cell phone and utility bills
While the home financing process for newcomers to Canada may be more complex and demanding, various pathways exist based on your immigration status, creditworthiness, and down payment.
Understanding your specific situation and working with a mortgage broker can help you navigate these options effectively.