Understanding A PRE-Approval!

General Mark Goode 21 Apr

1. Pre-approvals aren’t created equal.
Many lenders don’t review your qualifications when issuing a pre-approval. They provide only a rate guarantee, subject to later approval. (Mortgage advisers should always disclose this.)

“I would caution consumers when a lender only holds a rate, versus asking for documents and confirming qualification,” says Rob Regan-Pollock, a mortgage broker with Invis. “It’s heartbreaking to be told by a lender they cannot qualify after being told they were ‘pre-approved’.”

2. Advice goes only so far.
Mortgage advisers can “pre-qualify” you to confirm that you meet general guidelines, but only a lender’s underwriter can confirm that your income, down payment, purchase agreement, property information, credit and debt ratios meet their full approval

Unless you have a 20 per cent down payment from your own resources, rock-solid employment, provable income, pristine credit, and low debt, then pick a lender that reviews your application and preferably your documentation before granting its pre-approval.

3. Appraisals are the missing link.
Appraisals aren’t done at the pre-approval stage. But they’re mandatory for getting a mortgage. The issue, of course, is that you can’t get an appraisal on a home you haven’t found yet. And that’s the big risk with pre-approvals. If the lender’s or mortgage insurer’s valuation appraisal reveals that you overpaid, or the property has defects, it can render your pre-approval worthless. That’s why you’re always wise to insert financing conditions in your purchase offer (or at least appraisal conditions) or get an appraisal before you make an offer.

Adding a financing condition is especially important if you’re putting down less than 20 per cent, which typically requires an insured mortgage. That’s because default insurers like CMHC don’t even look at pre-approvals. They can decline you or your property for any number of reasons, leaving those without financing conditions at risk of not closing, losing their deposit and being sued.

4. Don’t over-rely on appraisers.
Even if you get an appraisal before making your offer, “you can’t rely on appraisers to identify every problem with a property,” says Jason Upton, president of Aedis Appraisals. That’s especially true for condos where most appraisers (due to cost and time constraints) won’t review condo board minutes, condo finances and engineering reports. That’s where risks like special levies, reserve deficiencies, legal problems or structural issues can turn up, all of which can kill a lender’s interest and make a pre-approval worthless.

5. Your actions after pre-approval matter.
Beware that missing payments, adding debt, changing jobs, moving around your down payment money or co-signing for someone, among other things, can void your pre-approval.

6. Pre-approvals don’t come with the best rates.
Statistically, only around one in six pre-approved homeowners actually take the mortgage they got pre-approved for. But the lender still has costs (like rate hedging and application processing costs) for the five in six pre-approved mortgages that don’t close.

Given this expense, pre-approvals don’t typically come with the best pricing. They’re often 0.10 to 0.15 percentage points above market rates – which is peanuts compared to your costs if rates soar and you’re not pre-approved.

That said, the best mortgage rates are often for 30- or 45-day closings. Check rates 30 days before closing. If they’re more than 0.10 percentage points below your pre-approval rate, ask your lender to match them. If they won’t, consider re-applying elsewhere. But avoid trading a flexible mortgage for a restrictive one that’s only marginally cheaper. Homeowners routinely underestimate their need for refinancing flexibility later.

7. Sometimes waiting pays.
If you’re very well qualified, a mortgage broker can sometimes time the submission of your pre-approval to get you better rates. “If rates are flat or trending down, the discussion with the client becomes one of monitoring the market and not actually submitting the file until they are within the window of [rate] specials,” Mr. Regan-Pollock says.

8. Reset if appropriate.
If rates have stayed low and you’re still actively home hunting, reset your pre-approval every 45 to 75 days. This extends your rate hold, protecting you if rates jump before you close. If your lender restricts rate resets, you might need to look elsewhere.

9. Get a second pre-approval, if needed.
Lenders don’t issue more than one pre-approval at a time. So if 45 to 60 days have elapsed, rates have jumped, and you need more time to find a home, consider getting a second pre-approval elsewhere. On the other hand, if you know you won’t close within your original pre-approval’s time frame, save time and try to reset the rate hold period with the existing lender.

10. Features matter.
Choose the pre-approval with the longest rate hold (e.g., 120 days), the deepest discount rate, full underwriting and the best mortgage features (i.e., good prepayments, a fair penalty, good port and refinance policies, etc.). Only a minority of lenders meet this criteria.

 
Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 | 
    â€¨ All credits and copyrights to their respective owners.  â€¨Article may have been altered or edited from Original Post. 
Corin Payie MMDLC



Shopping for the best rates? Here’s how to do it right!

General Mark Goode 14 Apr

RATE SHOPPING?

Here’s the inside scoop on how to do it right!

First:  Make sure you are working with an experienced professional mortgage broker and underwriter.  The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.  But how can you tell?

Here are four simple questions your lender absolutely must be able to answer correctly.  If they do not know the answers…RUN…DON’T WALK…to a lender that does!

 

  1. What are mortgage interest rates based on?

The only correct answer is the Bank of Canada rate for variable mortgages and mortgage backed securities, specialized mortgage bonds, or Government of Canada Long Bonds for fixed rates.  A professional mortgage originator ought to at least know the basics of how your interest rate is determined.  Do not work with a lender who has their eyes on the wrong indicators, or worse yet, has no idea what the indicators even are.  At Canada Mortgage Direct we constantly review these indicators and you can therefore be confident in our ability to suggest sound mortgage strategies up front and to manage your mortgage for the long term.

 

2.  How will rising interest rates in the coming years effect me if I take a fixed rate product?

Most lenders will mistakenly answer that if your rates are locked in then rising rates in the future will not affect you.  This is an incredibly dangerous thought process.  What will happen to your payments at renewal if rates rise from their current emergency low levels to a more normal level 2% or more higher then today? This is called your payment shock and it is incredibly risky to your long term financial health.  Working with a lender who pro-actively manages your mortgage and notifies you when rates rise with a suggestion on how to minimize payment shock is not only smart it saves you thousands of dollars.  Let me show you how.

 

3.  What strategy are you recommending and why?

The key here is the word “strategy”.  If a lender cannot clearly articulate the strategy behind their recommendations to you then they are simply quoting a rate, and quite frankly anyone can do that.  On your largest investment make sure you are dealing with someone who has a solid financial plan that is considering your overall financial wellness for you.

 

4.  What commitment are you giving me to personally manage my mortgage over the long term?

This is the most critical question of all.  Many lenders, especially bank personnel, have no desire or ability to proactively manage your mortgage over the long haul.  How can you take advantage of changing markets in the future if no one is watching them for you? Who will ensure you don’t miss an opportunity to renegotiate?  If you are considering a variable rate mortgage why would you do this with someone who is not committed to keeping an eye on it?  At Canada Mortgage Direct we truly believe our real job begins when your mortgage funds.  Anyone can sell you a mortgage but only truly committed mortgage professionals can manage that mortgage over the long term.  With this long term management approach we can significantly reduce your total cost of home ownership, isn’t that the point?

 

BE SMART…ASK QUESTIONS…GET ANSWERS!

 

More than likely this is one of the largest and most important financial transactions you will ever make.  You might do this only four or five times in your life…but we do this every single day, and have been doing it for 18 years!  It is your home, and your future.  It’s our profession and our passion.  We’re ready to work for your best interest!

 
Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca  | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 | 
All credits and copyrights to their respective owners.  â€¨Article may have been altered or edited from Original Post. 
Corin Payie  MMDLC 

Scotchmints.com

 

Finance Home or Cottage Improvements with your Home Equity

General Mark Goode 7 Apr

 

 

 
Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 | 
    â€¨ All credits and copyrights to their respective owners.  â€¨Article may have been altered or edited from Original Post. 
Corin Payie MMDLC

 Scotchmints.com

Brush up on your homeownership skills and knowledge FREE SEMINAR

General Mark Goode 1 Apr

Homeownership Education Week
Seminar and Live Webcast  April 8, 2014  9:00 a.m. – 11:00 a.m. (ET)

Join us for two-hours of informative and educational insights featuring leading Canadian economic and housing industry experts for a discussion on current homebuyer trends and demographic shifts, and the impact they are having on today’s real estate and financing environments.

http://www.meetview.com/genworth20140408/

This event is being held live for customers in the GTA on April 8 and simultaneously broadcast via webcast for customers across Canada.

Agenda:
 
 The Trends Changing Today Into Tomorrow

  • Linda Nazareth, economist, author, broadcaster

Genworth Canada Annual Homebuyer Survey Results

  • David MacDonald, VP, Environics Research Grou

Industry Panel Discussion

Tara Perkins, Real Estate Reporter, The Globe and Mail, will moderate an engaging discussion among industry experts including:

  • Stuart Levings, COO, Genworth Canada
  • David MacDonald, VP, Environics Research Group
  • Henrietta Ross, CEO, Canadian Association of Credit Counselling Services 
  • Laura Leyser, Sales Representative, RE/MAX a-b Realty Ltd., Brokerage 

This event is being held live for customers in the GTA on April 8 and simultaneously broadcast via webcast for customers across Canada.

To register for the in-person GTA event, please click here.
 
 

Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 |
    
 All credits and copyrights to their respective owners. 
Reposted Articles may have been altered or edited from Original post
~ Corin Payie ~ MMDLC

Scotchmints.com

 

CMHC to Increase Mortgage Insurance Premiums

General Mark Goode 28 Feb

OTTAWA, February 28, 2014 — Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014.

The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.

CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Increased capital targets are consistent with Canadian and international industry trends and makes the financial system more stable and resilient.

“The higher premiums reflect CMHC’s higher capital targets” said Steven Mennill, CMHC’s Vice-President, Insurance Operations. “CMHC’s capital holdings reduce Canadian taxpayers’ exposure to the housing market and contribute to the long term stability of the financial system.”

For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.

Effective May 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.

Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 2014)
Up to and including 65% 0.50% 0.60%
Up to and including 75% 0.65% 0.75%
Up to and including 80% 1.00% 1.25%
Up to and including 85% 1.75% 1.80%
Up to and including 90% 2.00% 2.40%
Up to and including 95% 2.75% 3.15%
90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year. The homeowner premium increase follows changes CMHC made to its portfolio insurance product earlier this year.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.

For additional highlights please see attached backgrounder and key fact sheet.

Information on this release:

Charles Sauriol, Media Relations
613-748-2799
csauriol@cmhc-schl.gc.ca

Follow CMHC on Twitter @CMHC_ca

Backgrounder

  • Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
  • CMHC mortgage loan insurance premium is calculated as a percentage of the loan based on the loan-to-value ratio. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.
  • CMHC reviews its premiums on an annual basis and has adjusted them several times since being commercialized in 1998. Adjustments have included both increases and decreases to the premiums.
  • CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after May 1, 2014. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to May 1, 2014, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.
  • The increase applies to mortgage loan insurance premiums for residential housing of 1-to-4 units. This includes owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums.
  • In 2013, the average CMHC insured loan at 95% loan-to-value was $248,000. Using these figures, the higher premium will result in an increase of approximately $5 to the monthly mortgage payment for the average Canadian homebuyer. This is not expected to have a material impact on the housing market.
95% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $4,125 $6,875 $9,625 $12,375
New Premium $4,725 $7,875 $11,025 $14,175
Additional Premium $600 $1,000 $1,400 $1,800
Increase to Monthly Mortgage Payment $3.00 $4.98 $6.99 $8.98

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

85% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $2,625 $4,375 $6,125 $7,875
New Premium $2,700 $4,500 $6,300 $8,100
Additional Premium $75 $125 $175 $225
Increase to Monthly Mortgage Payment $0.37 $0.62 $0.87 $1.12

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

For more information visit http://www.cmhc.ca/en/hoficlincl/moloin/moloin_013.cfm

If you would like to avoid these additional charges. Apply online here and get approved before May 1 2014

Mortgage Man – Dominion Lending Centres | Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca | FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6 |  All credits and copyrights to their respective owners.  â€¨Article may have been altered or edited from Original Post. 
Corin Payie MMDLC

Scotchmints.com

Still time to get your picks IN to WIN!

General Mark Goode 29 Jan

FIND OUT AND REGISTER HERE

Register now for the Nation’s Largest Hockey Pool and you could win 100,000 cash among other prizes. 
AND IT IS ALL FREE!

 

Like 
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We want to know! Tweet us @GoodeMortgages  Post to our Facebook 

If you want a chance to win $100,000 Register Here Today and join our team as we pit ourselves against the nation in the Largest FREE Hockey Pool in all of Canada.

 

                          ~Mark Goode AMP

 

 

 

      


Mortgage Man – Dominion Lending Centres
| FSCO# 12254 | 180 Memorial Avenue | Orillia, ON L3V 5X6
Ph: 705-326-8523 | Fx: 705-326-8645 |  www.markgoode.ca

 Friend Mark on Facebook | Like our page MortgageManDLC | Connect your professional profile on LinkedIn  | Follow us on twitter @GoodeMortgages

You can still get your Hockey Picks in to WIN!

General Mark Goode 29 Jan

Mortgage Man – DLC

 

There is still money and prizes pouring out as week 19 gears up for the MMDLC Hockey Pool. A national Competition that hasbeen ongoing throughout the Hockey season. Click here now to register or sign up your picks.
Each and every week 26 people are picked at random for a prize!

Next Deadline 7:00 PM EST on Monday, Feb. 3, 2014

 

Second Half Prizes

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    Awarded to the contestant who finishes with the best rank over the course of the Contest from January 6, 2014 to April 13, 2014. $2,500 CDN cash
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    Awarded to the contestant who finishes with the second best rank over the course of the Contest from January 6, 2014 to April 13, 2014. $1,000 CDN cash
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    Awarded to the contestant who finishes with the third best rank over the course of the Contest from January 6, 2014 to April 13, 2014. $500 CDN cash
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    Awarded to the contestant who finishes with the fourth best rank over the course of the Contest from January 6, 2014 to April 13, 2014. $300 CDN cash
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    Awarded to the contestant who finishes with the fifth best rank over the course of the Contest from January 6, 2014 to April 13, 2014. $200 CDN cash

Weekly Prizes

    • 1st Place (x26)
      Awarded to the contestants who finish with the best rank during each Week. $250 CDN cash ($6,500 CDN total)

Each weekly winner will also qualify for participation in the exclusive Playoff Bonus Game
for the chance to win $100,000.

    • Random (x26)
      Awarded to one randomly selected contestant each Week, regardless of rank. All contestants that have submitted picks (not carried over) for the applicable Week are eligible for the random drawing. $100 Gift Card

Playoff Bonus Game Prizes

    • Playoff Bonus Game Grand Prize
      A bonus prize of $100,000 will be awarded if an eligible entrant correctly predicts the answers to all X questions about the final series of the 2014 playoffs during the Playoff Bonus Game, held exclusively for the N qualifiers from the Regular Season and Playoff pools. A maximum of one (1) $100,000 bonus prize is available to be won. In the event that more than one eligible entrant qualifies for the bonus prize, the prize will be split evenly amongst the winners. $100,000 CDN cash
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      In the event the Playoff Bonus Game Grand Prize is not awarded, one consolation prize will be awarded to the entrant with the most correct picks in the Playoff Bonus Game. In the event of a tie, the tie-breaking question(s) will be used to determine the consolation prize winner. $1,000 CDN cash

The total approximate retail value of all prizes is $119,100 CDN. Details on registration site