Christine Buemann Mortgage Broker

Consistently tightening mortgage rules combined with low interest rates have caused several lenders to revise their guidelines for gifted down payments. As per CMHC, the person gifting the funds has to be a relative and the funds have to truly be a gift (no repayment required). Traditionally, they have only required a gift letter signed by both parties along with proof of the funds being deposited into the recipient’s account. Several lenders have now adjusted their supporting document requirements and they will now need to see one of the following along with proof of the funds being in the recipient’s account: 1.        Proof of the funds being in the relative’s account prior to the transfer of funds 2.        A letter from the relative’s financial institution stating that they have adequate funds to cover the gifted amount   Lenders now have more pressure to evaluate the overall risk of a file and although CMHC...

  If you are putting less than 20% as your down payment in Canada, your mortgage must be "insured". This type of insurance is called default insurance and protects the lender should you default on your mortgage. It is percentage based and is generally added directly into your mortgage total. Most Canadians have heard of CMHC, however did you know there are now two more alternatives for default insurance in Canada? Over the past few years, Genworth and Canada Guaranty have emerged as healthy competitors. All three have very similar guidelines such as: ·          minimum credit scores ·          minimum debt ratios ·          minimum loan to value ratios ·          down payment source options ·          supporting document requirements There are however district diff...

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...

As most people know, with the new regulations that took effect last month maximum amortizations for insured mortgages were reduced to 25 years. It is important to note that this will apply to any mortgage where less than 20% is being used for the down payment, but also for mortgages which are “bulk insured” (which basically means that the lender is still insuring it, but they are paying the premium). Some lenders are still offering 30 or even 35 year amortizations on their uninsured mortgages. You may ask yourself – why would someone want a 35 year amortization anyways? One of the most common reason is for qualifying purposes. If you were looking to qualify for a *$200,000 mortgage over 25 years , you would need at least $42,000 in income. If you lengthen the amortization to 35 years , you would only need approximately $36,000 in gross annual income. The key to this strategy is to set your payments from the first payment as the same amount as they would be with the 25...