People refinance thier homes for many reasons; starting a new business, clearing out credit card debt, renovating or property improvement, putting a child through school or just to take advantage of low interest rates. Sometimes refinancing makes sense for people retiring, they may not have the home paid off for whatever reason and at retirement they take a big hit on income. So why not stretch the amortization to the max and enjoy the golden years without feeling a financial pinch.
Refinancing is actually pretty simple, you just break one mortgage and get another one. In order to find out if it is best for you, it is a good idea to speak with someone who will explain all the pros and cons. We have all seen those flyers in our mailboxes that explain the savings when you consolodate and for the most part they are true, but rarely will they tell you the costs associated with it.
Refinancing Fees
There will be legal fees, usually about $1,000 and a penalty. The penalty can be just three months interest or interest rate differential. If your rate is higher than your currents lenders discount rate then they will penalize you the differnce in money they lose when you break your mortgage. If you are on good standing with your lender they may waive this penalty for you. If they don't why keep giving them your business?
Another thing, in most cases there should not be a broker fee. Occasionally there will be depending on your credit, income and equity in the home. Generally if the deal is going to a "B" lender you can expect some sort of fee. Make sure you know what it is when you get the approval, do not find out a rediculous broker fee is being charged when you are signing the papers. A mortgage insurance premium may also apply if you are refinancing over 80% of your homes value.
It is a good idea to sit down with a mortgage broker or call one to see if the costs make sense to you. If you are saving money or if it is going to cost you money. It could be the piece of mind you recieve is worth the extra costs. With interest rates as low as they are you can save a lot of cash over a five year term, and easily justify the costs, especially if you have high credit card debt.
We can finance up to 85% or your homes value, feel free to call me if you want a quick estimate on your home to see what is possible.
I hope this helps, feel free to ask questions or comment. Email or call for privacy.
Ron Miller
905-667-0699
ron.miller@butlermortgages.com
Monday, June 13, 2011
Saturday, June 11, 2011
New To Canada Mortgage
In 2010 there was approximately 280,000 new immigrants to Canada. Most of which are hoping for a new life and will be productive, some are simply looking for a better place to spend their money or have a better home for thier children. Some have received transfers from their employers.
When buying a home in Canada with less than 20% down you need to have mortgage default insurance which protects the bank, not you in the event that you fail to make your mortgage payments. If you are new to Canada there will be insurance premiums no matter how much you put down, it just depends on your credit strength. These premiums can be as low as 0.50% for 65% Loan to value (35% down). Some lenders will waive these for permanent residence status with significant established Canadian credit.
Canadian mortgage insurers do allow for new Canadians to purchase homes with as little as 5% down. Qualifying is actually quite simple. You arrived in Canada within the last 36 months, have three months worth of work history and have permanent residence or landed immigrant status to purchase with 5% down and 12 months worth of credit. If you are transferred from your employer to Canada and meet all other criteria as well as a letter from your company, you can purchase a home the day you arrive in Canada. Also if you are a non permanent resident with a work permit you will require a minimum of 10% down. If you have diplomatic immunity then sorry about your luck, you are not getting an insured mortgage in Canada.
While you are only required to be working for 3 months you are required to have at least 12 months worth of credit. It may be difficult to recieve credit as soon as you arrive here, but the insureres will accept 12 months worth of phone bills or other utility bills that are paid in full on time. Make sure you have at least two 12 month records. Rent payments from a landlord as well a letter from your previous financial institution on a case by case basis. With 10% down or more we may get away with 6 months worth of bank statements or a letter from your Canadian banking institution that states you are in good standing.
If you are arriving from the United States an American credit bureau is acceptable, from any other country it is case by case. You can purchase in as little as three months if you have acceptable forms of documentation to support your case. If you show up on the shores of Canada and are working but cannot support your credit worthieness you will have to earn that once you get here. If you plan on moving to Canada bring your credit bureau from your home country with you, it may not be accepted for a mortgage but it may help you in getting a jump start to recieve credit in Canada. A credit bureau in Canada is only good for 30 days, so see if you can have easy access to ordering another one when you need it.
The 5% down must come from your own resources and in special cases a gift from a family member. If the funds are coming from another country do your best to prove where the source is from. Strict down payment rules apply to show the funds did not come from the proceeds of crime or terrorism.
For self employed and new to Canada it is very difficult to qualify. You must be able to verify your income. Self employed in Canada are required two years worth of income tax to be filed and taxes paid. If you have 35% down you will have no problem getting a mortgage, but less than that will require you to have a good arguement as to why you are worthy of a mortgage. The mortgage will not be insured and therefore the lenders see it as a risk. The stronger you are the better interest rate and terms you will recieve.
It is very important to show financial and credit strength. If you call up a bank or a broker when new to Canada and say you want a mortgage but have nothing to show that you are not a risk, then you are a risk, even if you feel your the most responsible person. Document everything and make sure you use a mortgage broker who is familiar with new to Canada progams. Make sure you ask if there will be a fee, if they say yes then tell them to piss off, we are paid by the lending institution. Mortgage brokers who charge for this service are simply taking advantage of people who do not understand the Canadian mortgage system.
Not all the rules for the mortgage world in Canada are written in stone and there can be some exceptions. Different lenders may also have their owns rules for qualifying and actually argue to the insurers that they want to process a particular deal or decide a client is strong enough and not require the mortgage to be insured. The relationship a mortgage broker has with lenders and insurers can really help your cause. Basically there is two levels of approval, first we find a bank to take your mortgage then they find an insurer or we request which insurer the lender sends it to. Use a broker who will go to bat for you and get you what you are entitled to under Canadian regulations.
This post is a little longer than I wanted it to be, but there is a lot to discuss. I could go on for a few more pages. If you are planning on coming to Canada it is good to contact me ahead of time. If you are already here then what are you waiting for?
Prior to looking for a home, the very first step is talking with a mortgage broker and getting yourself pre-approved.
If you have any questions please do not hesitate to email, call or comment. Comments are welcomed and encouraged.
Ron Miller
905-667-0699
ron.miller@butlermortgages.com
When buying a home in Canada with less than 20% down you need to have mortgage default insurance which protects the bank, not you in the event that you fail to make your mortgage payments. If you are new to Canada there will be insurance premiums no matter how much you put down, it just depends on your credit strength. These premiums can be as low as 0.50% for 65% Loan to value (35% down). Some lenders will waive these for permanent residence status with significant established Canadian credit.
Canadian mortgage insurers do allow for new Canadians to purchase homes with as little as 5% down. Qualifying is actually quite simple. You arrived in Canada within the last 36 months, have three months worth of work history and have permanent residence or landed immigrant status to purchase with 5% down and 12 months worth of credit. If you are transferred from your employer to Canada and meet all other criteria as well as a letter from your company, you can purchase a home the day you arrive in Canada. Also if you are a non permanent resident with a work permit you will require a minimum of 10% down. If you have diplomatic immunity then sorry about your luck, you are not getting an insured mortgage in Canada.
While you are only required to be working for 3 months you are required to have at least 12 months worth of credit. It may be difficult to recieve credit as soon as you arrive here, but the insureres will accept 12 months worth of phone bills or other utility bills that are paid in full on time. Make sure you have at least two 12 month records. Rent payments from a landlord as well a letter from your previous financial institution on a case by case basis. With 10% down or more we may get away with 6 months worth of bank statements or a letter from your Canadian banking institution that states you are in good standing.
If you are arriving from the United States an American credit bureau is acceptable, from any other country it is case by case. You can purchase in as little as three months if you have acceptable forms of documentation to support your case. If you show up on the shores of Canada and are working but cannot support your credit worthieness you will have to earn that once you get here. If you plan on moving to Canada bring your credit bureau from your home country with you, it may not be accepted for a mortgage but it may help you in getting a jump start to recieve credit in Canada. A credit bureau in Canada is only good for 30 days, so see if you can have easy access to ordering another one when you need it.
The 5% down must come from your own resources and in special cases a gift from a family member. If the funds are coming from another country do your best to prove where the source is from. Strict down payment rules apply to show the funds did not come from the proceeds of crime or terrorism.
For self employed and new to Canada it is very difficult to qualify. You must be able to verify your income. Self employed in Canada are required two years worth of income tax to be filed and taxes paid. If you have 35% down you will have no problem getting a mortgage, but less than that will require you to have a good arguement as to why you are worthy of a mortgage. The mortgage will not be insured and therefore the lenders see it as a risk. The stronger you are the better interest rate and terms you will recieve.
It is very important to show financial and credit strength. If you call up a bank or a broker when new to Canada and say you want a mortgage but have nothing to show that you are not a risk, then you are a risk, even if you feel your the most responsible person. Document everything and make sure you use a mortgage broker who is familiar with new to Canada progams. Make sure you ask if there will be a fee, if they say yes then tell them to piss off, we are paid by the lending institution. Mortgage brokers who charge for this service are simply taking advantage of people who do not understand the Canadian mortgage system.
Not all the rules for the mortgage world in Canada are written in stone and there can be some exceptions. Different lenders may also have their owns rules for qualifying and actually argue to the insurers that they want to process a particular deal or decide a client is strong enough and not require the mortgage to be insured. The relationship a mortgage broker has with lenders and insurers can really help your cause. Basically there is two levels of approval, first we find a bank to take your mortgage then they find an insurer or we request which insurer the lender sends it to. Use a broker who will go to bat for you and get you what you are entitled to under Canadian regulations.
This post is a little longer than I wanted it to be, but there is a lot to discuss. I could go on for a few more pages. If you are planning on coming to Canada it is good to contact me ahead of time. If you are already here then what are you waiting for?
Prior to looking for a home, the very first step is talking with a mortgage broker and getting yourself pre-approved.
If you have any questions please do not hesitate to email, call or comment. Comments are welcomed and encouraged.
Ron Miller
905-667-0699
ron.miller@butlermortgages.com
Thursday, June 2, 2011
Hammertown
Hello everyone, I have been thinking about putting a post about Hamilton ON for a while now, it is not about mortgages, but about the incredible City of Hamilton. If you are reading this from outside of Hamilton and can’t figure out how I could possibly call this city incredible, then it is obvious that you need to finish reading this article. Hamilton is looking for young energetic people that want to get a jump start on life by bringing their skills and enthusiasm to a city that is exploding with opportunity.
The city of Hamilton has probably been asleep for 50 years or more with not much growth and development; however that is starting to change. Rein has voted Hamilton the #1 city in Ontario to invest in and #3 in Canada, The Financial Times actually said that Hamilton is ranked in the top 10 of the future of North America and I rank Hamilton as the most affordable city in the Golden Horseshoe to live in.
When you consider that you can purchase a beautiful 3 bedroom bungalow in a good neighbourhood in Hamilton for around $250,000 compared to the price of a two bedroom condo around $300,000 + condo fees + parking fees in Toronto it is no wonder why so many young professionals are moving to Hamilton. The city of Hamilton has home prices from 100k in the Industrial Sector up to and over 1 million in the Durand neighbourhood. There is something for everyone in Hamilton. A young couple where both work at minimum wage can buy a home in Hamilton, a couple working at one of Hamilton’s many hospitals can literally move into a 100 year old home with incredible charm and old beauty for around 500k more or less and live comfortably. Quality of life is good in Hamilton when a much smaller amount of your income is going towards housing. Entertainment and dining are more affordable as well.
The unemployment rate in Hamilton is 5.5% compared to Toronto at 9.5%. There are a lot of people who think Hamilton is just a steel town. Steel and manufacturing are a major part of our history, but remember Hamilton has a huge health care industry and they are always looking for new employees in every field, the hospitals are still growing and people are retiring. Hamilton Health Sciences is Hamilton’s largest employer. Because of the hospitals, they spring up lot of secondary clinics in the city and many professionals are opening up shop in Hamilton to support the growing demand the hospitals require for additional servicing; examples, bone clinics, heart clinics, rehabilitation clinics, eye clinics, etc. Hamilton has manufacturing, agriculture, huge transportation industry and many more. And we can never forget about our young self-employed sectors that are jumping all over the opportunities in Hamilton.
Keep in mind that if you are planning to purchase in Hamilton, you would be crazy to use an out of town agent. Hamilton is still experiencing growing pains and there are definitely neighbourhoods you may not want to live in. Good and bad areas can be separated by as little as one street. You want to be certain that you use a local Realtor, I have a handful of Realtors that I work with, trust and respect, and I would gladly give you their contact info.
I will be setting up a new blog just about the city of Hamilton, expanding on the points I made above as well as discussing all the great things Hamilton has to offer such as; The waterfall capital of the world, the Bruce Trail, the resources the city provides, the recreational activities available, the re-building of downtown, and much much more. I will be putting this together along with a video blog here is a cute little start. “The Sunny Side of the Street”
I would appreciate any comments good or bad, and or requests for information about Hammertown, I will search it out and find it.
Ron Miller
905-667-0699
ron.miller@butlermortgages.com
The city of Hamilton has probably been asleep for 50 years or more with not much growth and development; however that is starting to change. Rein has voted Hamilton the #1 city in Ontario to invest in and #3 in Canada, The Financial Times actually said that Hamilton is ranked in the top 10 of the future of North America and I rank Hamilton as the most affordable city in the Golden Horseshoe to live in.
When you consider that you can purchase a beautiful 3 bedroom bungalow in a good neighbourhood in Hamilton for around $250,000 compared to the price of a two bedroom condo around $300,000 + condo fees + parking fees in Toronto it is no wonder why so many young professionals are moving to Hamilton. The city of Hamilton has home prices from 100k in the Industrial Sector up to and over 1 million in the Durand neighbourhood. There is something for everyone in Hamilton. A young couple where both work at minimum wage can buy a home in Hamilton, a couple working at one of Hamilton’s many hospitals can literally move into a 100 year old home with incredible charm and old beauty for around 500k more or less and live comfortably. Quality of life is good in Hamilton when a much smaller amount of your income is going towards housing. Entertainment and dining are more affordable as well.
The unemployment rate in Hamilton is 5.5% compared to Toronto at 9.5%. There are a lot of people who think Hamilton is just a steel town. Steel and manufacturing are a major part of our history, but remember Hamilton has a huge health care industry and they are always looking for new employees in every field, the hospitals are still growing and people are retiring. Hamilton Health Sciences is Hamilton’s largest employer. Because of the hospitals, they spring up lot of secondary clinics in the city and many professionals are opening up shop in Hamilton to support the growing demand the hospitals require for additional servicing; examples, bone clinics, heart clinics, rehabilitation clinics, eye clinics, etc. Hamilton has manufacturing, agriculture, huge transportation industry and many more. And we can never forget about our young self-employed sectors that are jumping all over the opportunities in Hamilton.
Keep in mind that if you are planning to purchase in Hamilton, you would be crazy to use an out of town agent. Hamilton is still experiencing growing pains and there are definitely neighbourhoods you may not want to live in. Good and bad areas can be separated by as little as one street. You want to be certain that you use a local Realtor, I have a handful of Realtors that I work with, trust and respect, and I would gladly give you their contact info.
I will be setting up a new blog just about the city of Hamilton, expanding on the points I made above as well as discussing all the great things Hamilton has to offer such as; The waterfall capital of the world, the Bruce Trail, the resources the city provides, the recreational activities available, the re-building of downtown, and much much more. I will be putting this together along with a video blog here is a cute little start. “The Sunny Side of the Street”
I would appreciate any comments good or bad, and or requests for information about Hammertown, I will search it out and find it.
Ron Miller
905-667-0699
ron.miller@butlermortgages.com
Subscribe to:
Posts (Atom)