Christine Buemann Mortgage Broker

Are you currently shopping for a home? If you are getting ready to write an offer on a home this holiday season, here are a few helpful hints that I have learnt from experience: ·          Realtor / Mortgage Broker : if your Realtor or Mortgage Broker is away over the holidays, it is a good idea to meet with their replacement prior to them leaving. If you don't feel comfortable with their replacement, be honest with them. They can generally have someone else look after your needs while they are away to ensure you have a positive experience ·          Lawyer or Notary: if your closing date is set to be at the end of December, find out what days your lawyer's office is open and make sure   they can take on your file ·          Home Inspector / Appraiser: check the availability of your Home Inspector and/or Appraiser to have an accurate time frame for your subject removal dates ·          The biggest thing to remember from the financing perspective is that many bank

With all of the changes in mortgage lending over the last while, the one thing that all lenders and insurers (CMHC, CG & Genworth) have cracked down on and that is supporting documents. The best way to look at it is that every piece of information from your application has to be verified. Here is a list of the basic supporting documents that will be required when you get your next mortgage. · Letter of employment o    Stating your salary, start date and tenure o    Should be on company letterhead o    Should be written within the last 30 days o    Should have contact information for the person who can verify the information ·   2 recent paystubs o    Should be within the last 30-60 days o    The YTD and wage much be a true reflection of the income used to qualify ·   Notice of Assessment for the last 2 years   if you are part time or receive any overtime, bonuses, or commission ·   Proof of downpayment and 1.5% of the purchase price for closing costs via: o    Investm

Please note that today the Canadian government announced it is boosting the annual contribution limit on Tax-Free Savings Accounts by $500. Beginning January 1st, 2013, the new ceiling has been raised to $5,500 per annum.   www.christinebuemann.com

Every year the Canadian Association of Accredited Mortgage Professionals conducts a survey to gain insight in Canada’s mortgage and housing market. Here are a few interesting statistics from this year’s report: 47% of new mortgages in 2012 were originated by a Mortgage Broker *This is an increase over last year and is largely due to first time buyers. This percentage has been steadily increasing as the previous perception of the role of a Mortgage Broker fades and the value of having a qualified professional work for you becomes evident. The average interest rate was 3.55% which is lower than last year’s average of 3.92% * As per this BoC report , borrowers who use Mortgage Brokers save an average of .19% on their interest rate. The arrears rate has fallen for 19 consecutive months and is approaching a record low of .25% *Although the record high levels of household debt has been a focus in the media, this shows us that Canadians have remained diligent at paying off their m

One thing that I find many people are not aware of is that every time someone pulls your credit, it lowers your score a little . The amount of times it is pulled in a 12 month span affects approximately 10% of your overall score. The best way to find out your score and check on your credit report is to pull it yourself as that does not lower your score. There are 2 credit reporting agencies in Canada – Equifax and TransUnion. The more commonly used is Equifax, however it is best to check both as there can be a difference in information. Here are a few options with Equifax: Obtain your free credit report ·          http://www.cmhc-schl.gc.ca/en/co/buho/buho_013.cfm# ·          If you choose this option it will be mailed to you. Generally it takes up to 5 business days ·          Pay $11.95 to add your credit score Obtain an online copy of your credit report, score and explanation of what is hurting or helping your score ·          $23.95 ·          https://www

As I have previously mentioned, the new OSFI (Office of the Superintendent of Financial Institutions Canada) changes took effect for most lenders on November 1 st . Here are a few examples of how the changes could affect you: ·          Qualifying rate is going to be used for all variable rate mortgages and terms less than 5 years (previously, some lenders would use a lower rate such as the 3 year fixed rate to qualify conventional mortgages) o    Let’s say you have an annual salary of $50,000 and you are going to get a variable rate, conventional* mortgage. If they could have previously qualified you at a 3 year rate, you would have qualified for approximately $297,000 . Now that they will be using the qualifying rate, you will only qualify for approximately $228,000 * ·          Heat component will be set according to property size (previously most lenders would use $75-$100 a month for heat regardless of the property size) o    Again, we will use the annual salary of $50,00

As I have mentioned several times in my previous postings, every lender has a different set of terms for their mortgages but they also each have unique qualifying criteria. Here are several guidelines that may vary by lender: ·          Some will use 3% of the balance for all revolving credit (i.e. lines of credit, credit cards) while others will use the minimum payment that is reported on your credit report to debt service ·          Some will only allow you to add 50% of the rental income from existing rentals back to your annual income. This means that all other liabilities (mortgage, property tax, heat ext.) will be included in your debt ratio. Others will use a rental offset which allows you to deduct the liabilities from your monthly income and add the balance to the application ·          Some lenders will only lend on the value of the house plus the first 5 acres (CMHC will do the house plus the first 10 acres) ·          Some lenders have lower debt servicing

As I discussed in my previous blog posting, the interest rate is an important aspect of a mortgage, but is not the only factor to consider. There are other “features” within a mortgage that can be equally as important. Here are a few: ·          Payout penalty calculations: how the lender calculates what your penalty will be if you pay you pay out your mortgage out before the end of the term ·          Pre-payment privileges: how much principle you can pay down annually without a penalty ·          Portability: if you can “port” the mortgage to another home should you choose to move ·          Assume-ability : if someone can “assume” the terms and balance of your mortgage ·          Blend and refinance-able : if they will allow you to blend the rate of your mortgage with the current rate should you choose to refinance (generally with lower fees) ·          Conditions of release: are there any special conditions in order to get out of the mortgage (an example would

As you may have heard, the Office of the Superintendent of Financial Institutions Canada (OSFI) has eliminated the program that some lenders provide that allows borrowers to use “cash-back” from their mortgage as their down payment. With some lenders offering up to 5.5% cash-back, it allows borrowers to purchase a home without having saved a down payment. Because you are essentially financing 100% of the purchase price, there are higher risks and therefore a higher interest rate (bank’s posted rate). It is often viewed as a great opportunity for many first time buyers to get into the market while home prices and interest rates remain low. The standard qualifying criteria applies, as well the borrower must have a good credit score. In order to take advantage of the 5.5% cash-back, the application must be submitted prior to October 31 st . Here is a link for more information on how cash-back mortgages work. Contact me with any questions. http://christinebuemann.blogspot.ca/20

As expected, the Bank of Canada met this morning and decided to keep their target overnight rate at 1%. In turn, Bank's Prime Rate will remain at 3% www.christinebuemann.com

Check out this great article on the importance of having a contingency fund for all home owners. Many types of investments such as Tax Free Savings Accounts or short term investments will have automatic withdrawal options that allow you to build your fund easily and automatically. Building a Cash Cache www.christinebuemann.com

When it comes to fixed rate mortgages, the 5 year term is the most common. While most people think that shopping around for the lowest interest rate is the most important aspect of choosing a mortgage, choosing an appropriate term is equally as important. Here is an example: If you were to have taken out a $300,000 mortgage in 2009 with a 5 year term at 4.5% and you were wanting to get out of that mortgage 2 years early, you would have to pay roughly $11,000 in discharge fees (depending on the lender). If you would have taken a 3 year term at the time of origination at 4%, your payments would have been just over $80 less a month . You would also have paid approximately $4400 less in interest over the 3 year term. The savings of the penalty in combination with the lower interest rate is over $15,000! If you intend to keep your mortgage for the full 5 years, there are clear benefits of locking into an ultra-low rate for a longer period of time. With rates as low as 3.89% for a 10 ye

It has been heavily publicized how insurers and lenders alike have been increasingly tightening up their approval guidelines, making it significantly more difficult to obtain a mortgage in Canada.   Most people will feel so discouraged when they are declined by their bank, that they may not look for a second opinion or they may not even know that they have other options. Mortgage Brokers have the ability to shop the "A" lenders for the best rates and products to suit your needs but we are also licensed to look at "B" lenders or even private lenders, depending on your situation.   For example, we have access to an alternative lender who is currently offering "Stated Income" mortgages on rentals (65% LTV max) or a private lender who has rates as low as 4.5% (rates are file specific). Using a Mortgage Broker will allow you to explore all of your options and have professional guidance to determine the best solution for you.   Contact me for more in

Do you want to know what size of mortgage you qualify for but are unsure of what income to use? When calculating debt ratios, it is very important to know how much to use as your qualifying income. Here are a few basic guidelines: L enders will use the average of your last 2 year's Gross income if: ·          your income fluctuates ·          you receive bonuses or overtime ·          you are part time (unless you are guaranteed a certain number of hours) ·          you are self-employed ·          you are paid on commission ·          you are paid as a sub-contractor ·          you are using pension income ·          you are using investment income This amount is taken from your Line 150 on your T4's and /or Notice of Assessments. If you have not been at your current job for more than 2 years, they may accept a 2 year history if your employment was in the same industry. They will use your Gross annual wage if: ·          you are hourly and guaranteed full