A zero-down mortgage is not for everyone – but for qualified homebuyers, a well designed zero-down plan can be a tremendous financial boost: getting Canadians into their homes faster, saving potentially thousands
in rent, and giving homebuyers a jump start on building wealth.

What about the worry that the Canadian housing industry is following the same catastrophic path as in the U.S.? Well, let’s take a clear-eyed look at why the Canadian and U.S. situations are very different. The ability of our American neighbours to tax-deduct the interest on their mortgage created millions of heavily-leveraged homeowners. And their previously lax lending rules on subprime and adjustable rate mortgages coaxed many U.S. homebuyers into homes that were affordable for only the first few years, which ultimately led to the U.S. housing crisis.

The problem mortgage products were never available in Canada. Additionally, the Canadian government has tightened mortgage rules three times in less than three years, while lenders have become increasingly cautious. Canadians also remain prudent with their financial management; according to Canadian
banking industry figures, the percentage of mortgages in arrears currently sits at a mere .38 of one percent. That combination – regulation, conservative lending and consumer attitude – have played a big role in protecting the Canadian housing market.

Today, buying a home with zero downpayment for the right candidate can still be a financial breakthrough,
and the beginning of a successful wealth journey. If you have stable income, good credit, and the ability to comfortably manage your monthly mortgage payment and ongoing housing expenses, then you could be a candidate for a zero-down mortgage. Consider that the money currently going to rent could be helping you build home equity right now. And that we are in a time-limited window of opportunity of historically low mortgage rates – meaning you could lock in a great payment plan for five or even ten years instead of waiting and saving… only to find that rising interest rates are putting your dreams of home ownership out of reach.

So how can you get around saving that critical 5% downpayment: the minimum required to qualify for an insured mortgage? We can review your options, which include:
1. Borrowing the downpayment through a loan or unsecured line of credit;
2. Securing a “cash-back” mortgage that provides the cash upfront; or
3. Having the downpayment gifted to you by a parent or other blood relative with a letter saying you are not required to pay the money back at any time.

We can outline all of the details that you should be aware of with each option. For instance, cash back mortgages have higher interest rates and if you pay out your mortgage before your term is up, you’ll be required to pay back a pro-rated amount of the downpayment you received. If you borrow the downpayment, the loan payment will be used in your qualifying calculation. And you’ll need to have funds
set aside to cover your closing costs.

Want to learn how to build your downpayment faster, how to purchase now without waiting, or how to build your credit rating to qualify for a great rate when the time comes? If you’re in the “saving up” stage of preparing for homeownership, this is a great time to come in for advice. Let’s talk!

Well, you may not uncover a financial windfall when you’re cleaning the garage this spring, but a little time and attention to the task of spring cleaning your financial house can be very rewarding. This spring, dust away the cobwebs and take a hard look at your debt servicing costs.

Are you continuously carrying a large monthly balance on your credit cards? Take some comfort in knowing that you’re not alone. However, this particular kind of financial clutter – ongoing, unsecured consumer debt – is both confusing and costly. Guess what? It’s time to spring clean your debt!

Begin by making a quick list of the interest you are being charged on your loans, credit cards or other unsecured debts. What are you paying in debt servicing costs? Do you have tax bills piling up? Don’t forget
to include that debt in your spring cleaning project.

Next, take a look at our historically low mortgage rates, and make an appointment with a mortgage professional for a review of your situation. You have a golden opportunity right now to give yourself a tremendous financial boost. By rolling your other debt into a mortgage – either new or existing – you can reduce the number of payments you’re making each month, save big on interest costs, be mortgage free quicker, and greatly improve your cash flow. Most of all, you’ll be able to start building wealth.

Worried about penalties? Don’t think it can make much difference? Think again. It can be as good – or better – than finding the $5,000 envelope of cash in your garage. Why? As an example, assume you have a $175,000 mortgage at 4.5%, high interest credit cards and other loans of $50,000, and a total monthly payment of $2,119. Now if you took that $225,000 and added on an approximate $8,000 penalty to
refinance your mortgage, you could roll that $233,000 into a 3.5% mortgage (OAC, rates subject to change) that would reduce your overall monthly payment to $1,163. That’s a monthly savings of $956. Your monthly
payment has been reduced, you’re saving on interest charges, and all of your high interest credit card debts are gone. Imagine if you funneled some of that cash flow back into your mortgage, or invested in RRSPs,
TFSAs, or RESPs!

Regardless of where you are in the life of your mortgage, if you have equity in your home and your cash flow has slowed to a trickle because of your debt, talk to a mortgage professional who can analyze your situation and outline your spring cleaning options.

So as you polish the windows, shake out the carpets and clear out the garage, don’t forget the most rewarding task of all: spring cleaning your debt. Your financial house will enjoy the fresh beginning too!

The days are getting longer and mortgage rates are wonderfully low as we move into spring housing market 2012! In fact, homeowners are locking in some of the lowest rates in history. This Great Canadian Mortgage Sale is a good time to take a look at how much mortgage you could afford given your current rent. Your dream home may be more affordable than you think!

Rent Today Mortgage Tomorrow* Home Purchase
$1,250 $290,176 $296,861
$1,500 $348,211 $356,233
$1,750 $406,246 $416,606
$2,000 $464,281 $474,727

Your monthly rent cheque doesn’t have to be money out the window. It could be building equity in your own home.

Keep in mind that home ownership involves costs beyond the monthly mortgage payment like utility bills, insurance, and property taxes. We can help you determine what you can comfortably afford.

Get pre-approved today and have your rate held for 120 days! This way you don’t have to worry about rates rising while you are house hunting, and both realtors and sellers will know you’re serious, which means you’ll be in a good position to get the home you want.

Don’t miss out on the Great Canadian Mortgage Sale!

*Assumes 30-year amortization, 5% downpayment, 2.95% mortgage insurance premium, 5-year term, 3.19%, OAC, subject to change. For illustration purposes only.

Not all debt is created equal – and not all debt is bad. In fact, you need some debt to establish a good credit rating. Being a responsible borrower means knowing which types of debt can help you reach your financial goals and which types leave you further behind.

Good debt includes any investment or purchase that helps improve your overall financial position. Mortgage loans are considered good debt because they offer low rates on property that appreciates in value over the long term. You also build equity as you pay down your mortgage. Borrowing to invest is also considered good debt. Often, the interest expense on money borrowed for investments is tax deductible. And when borrowing to maximize your RRSP, you’re investing in your future and benefiting from tax sheltered investment growth.

Bad debt involves purchases where the value becomes lower than the original cost, and which can carry a high rate of interest, making them harder to pay off. Types of bad debt include high-interest credit card debt, car loans, deferred purchases, and cash advances.

If you’re unsure about your debt situation, set up a meeting with me. I can take you through your finances and advise how you can use your home equity to trade bad debt for smart debt, and give you some financial breathing room. The right refinancing package can help put an end to the monthly squeeze of too much credit card debt or too many loans, and help you get back into your financial comfort zone.

At the end of 2011, Manulife Bank of Canada released the results of their latest consumer debt survey. They found that two-thirds of homeowners (65 per cent) did not compare products from several different lenders to make sure they were getting the best deal the last time their mortgage came up for renewal. Twenty per cent stayed with their current lender and did not negotiate, while 45 per cent stayed and negotiated but did not shop the market. Interestingly, the youngest age group surveyed (30-39) were the most likely to shop around (41 per cent) but also the most likely to stay with their current lender and not negotiate (24 per cent). This age group is in the most hectic period of balancing work and children, which often causes things to be left to the last minute and it’s easier to follow the path of least resistance.

You could save a considerable amount of money if you renew at a lower rate. A half percent difference on a $225,000 mortgage with a 20 year amortization can mean over $5,200 in interest savings over five years. Wouldn’t it be better to put that amount towards reducing your mortgage principal?

You also need to consider that your mortgage needs may have changed. This may be a good time to roll your high-interest credit cards and other debt into your mortgage to get one lower payment, boost your cash flow and save on interest costs. Or you may want to take some equity out for renovations, a second property or for investing.

Keep in mind that there are some administrative details and costs when switching your mortgage to another lender, but don’t let this discourage you from finding out more. It doesn’t cost you anything to investigate your options or get a second opinion. When you switch your mortgage to a new lender, you will go through an approval process similar to when you took out the original mortgage. You can either assign your existing mortgage or you can apply for a new one should you want to borrow a larger amount to consolidate your high interest debt or complete some renovations.

Your lender may charge a discharge fee, and you may need to pay legal and appraisal fees if you are getting a completely new mortgage instead of switching your existing one. At that point, you should assess if the money you will save by switching to a better interest rate offsets those costs. The cost for you mortgage life insurance may also change. You won’t have to pay for your mortgage broker’s service (oac) because the lender selected pays compensation for the services and mortgage solution provided to you.

If a renewal is in your financial future, bring us your renewal notice four months prior to your renewal date. There are some great options out there; we’ll help you look around.

With a pre-approval, you’ll know the amount you qualify for and how much it will cost you to carry the mortgage, and your interest rate will be held for a specified period of time, typically 120 days. This way you don’t have to worry about rates rising while you are house hunting, and both realtors and sellers will know you’re serious, which means you’ll be in a good position to get the home you want. You also won’t waste any of your valuable time looking at houses that are out of your price range. And by not underestimating what you can afford now, you can save over the long term if you don’t need to purchase a trade-up home later.

Your pre-approval is a conditional mortgage approval that gives you mortgage amount, term, interest rate, and expiry date. Keep in mind that you’ll need to substantiate the information you provided for the pre-approval when you go back to the lender for the actual mortgage.

Contact me to get pre-approved today. You don’t want to miss out on the Great Canadian Mortgage Sale!

Growth of mortgage debt slows: CMHC
The rate at which Canadians have been racking up new mortgage debt has slowed in recent months, lending credence to the theory that the country’s housing market will hold up, Canada Mortgage and Housing Corp. suggests. The…

 Getting a pre-approval for mortgage financing before you start to look for a home is a smart move.

 A pre-approval assures you of a locked-in mortgage rate for a set period – so there is no risk of any interest rate increases while you are house hunting.  The great news for those who turn to a mortgage broker is that a broker may be able to obtain a longer pre-approval rate hold. Also, with a pre-approval, you’ll get a clear-cut sense of how much you are eligible to borrow. 

 Keep in mind that the property you intend to purchase – along with your supporting information (such as income, down payment and employment history) – has to meet the financial institution’s criteria to be approved for lending.  Also, a pre-approval is not a guarantee of financing, and does not eliminate the need to make a conditional offer. 

 If you are planning on looking for a home this spring, call an Invis mortgage professional today to get pre-approved.  He or she can get you an extremely competitive interest rate and length of rate hold – you’ll soon be on track to finding the home that’s ideal for you and your family.