Christine Buemann Mortgage Broker

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