Archive for October 2008
Useful website links for home buyers
Tired of navigating through countless websites to find the exact information that you need? I am too so I decided to put together a list of useful links that you can use yourself. The subject areas covered are, buying a home and mortgage loan insurance premiums, information on the Ontario land transfer tax and refund, enrolling in your city’s pre-authorized payment plan, a link to ordering your own personal credit report as well as a link to the government website listing grants available to home owners who make their homes more energy efficient. Please let me know if these are helpful and if you happen to think of any new links that you would like to see listed here, please pass along your ideas to me and I will attempt to add them. I sincerely hope that these links can save you some time.
Do you need to check if a Mortgage Brokerage, Administrator, Mortgage Agent, or Mortgage Broker is registered and properly licensed in Ontario
Visit the Financial Services Commission of Ontario website at:
http://www2.fsco.gov.on.ca/mbslist/agents.mbl
Do you want to look up the Mortgage Loan Insurance premiums with
Genworth Financial Canada
Mortgage Loan Insurance premiums are available at:
http://www.genworth.ca/mi/eng/product_solutions/premiumRateTable.html
Do you want to look up the Mortgage Loan Insurance premiums with
AIG United Guaranty
Mortgage Loan Insurance premiums are available at:
http://www.aigug.ca/products/premium-rate-chart.pdf
Do you want to look up the Mortgage Loan Insurance premiums with
Canada Mortgage and Housing Corporation or CMHC
Mortgage Loan Insurance premiums are available at:
http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm
Do you need to know anything about the Ontario Land Transfer Tax
Or apply for the land transfer tax rebate
Visit the Government of Ontario, Ministry of Revenue website at:
http://www.rev.gov.on.ca/english/taxes/ltt/
Do you need to enrol in the City of Mississauga’s Pre-authorized Tax Payment Plan
Visit the City of Mississauga website at:
http://www.mississauga.ca/portal/residents/taxformscentre
Do you need to enrol in the City of Oakville’s Pre-authorized Tax Payment Plan
Visit the City of Oakville website at:
http://www.oakville.ca/taxpayment.htm
Do you need to enrol in the City of Milton’s Pre-authorized Tax Payment Plan
Visit the City of Milton website at:
http://www.milton.ca/residents/tax/taxpayment.htm
Do you need to enrol in the City of Toronto’s Pre-authorized Tax Payment Plan
Visit the City of Toronto website at:
http://www.toronto.ca/taxes/property_tax/forms.htm#plan
For an in-depth document of the ABCs of mortgages, you can
Visit the Financial Consumer Agency of Canada or FCAC website to read it:
http://www.fcac-acfc.gc.ca/eng/publications/mortgages/Amortization_e.asp
Genworth Financial publishes daily mortgage rates on their website at:
http://www.genworth.ca/mi/eng/misc_pages/interest_rates.asp
Equifax Canada
Order a copy of your consumer credit report:
http://www.equifax.com/home/en_ca
Do you wnt your home assessed for its energy efficiency?
The Energuy
Do you want to see what grants, rebates, discounts and incentives are available
If you make your home more energy efficient?
Please visit the Natural Resources Canada website at:
http://oee.nrcan.gc.ca/corporate/incentives.cfm
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785
by email at eblair@mortgageedge.ca
or you visit her website at: http://www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca
Mississauga – Broker or Bank – what is the difference?
In Canada, people can use a Mortgage Broker, a Mortgage Agent or a bank employee usually known as a “Mortgage Development Officer” to get their mortgage in place.
As a consumer shopping for a mortgage, you may be asking, so what really are the differences between these ?
Here is a table that I have created to help you compare:
|
Mortgage Broker /
Mortgage Agent
|
Mortgage Development Officer who works for the Bank
|
Disclosure to Borrowers
|
The Mortgage Broker and Mortgage Agent are required to follow the disclosure stipulations per the Mortgage Brokers Act.
The Mortgage Broker and Mortgage Agent must inform the borrower about the mortgage transaction using a detailed document called the “Statement of Mortgage”. The Statement of Mortgage contains details such as, legal description of the property, the loan amount, the term of the loan, the amortization period, the payment amount, the payment frequency, the total amount owing at the end of the mortgage term, the interest rate and a detailed breakdown of all other fees payable by the borrower, for example, broker fees or lender fees, etc. and the final effective cost of borrowing.
The Mortgage Broker and Mortgage Agent must provide a Statement of Mortgage to the borrower which shows what the effective annual interest rate is.
|
The Mortgage Development Officer is required to use disclosure documents that comply with the Bank Act.
The Mortgage Development Officer will provide details of the mortgage transaction to the borrower, however, the banks documents are not as “detailed” as the “Statement of Mortgage” document used by Mortgage Agents.
The Mortgage Development Officer forms do not disclose the effective annual interest rate.
|
Disclosure to Investors
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The Mortgage Broker and Mortgage Agents must provide detailed disclosure documents to the investor. The investor is given adequate time to consider the investment opportunity before investing in the mortgage.
|
Mortgage Development Officers do not arrange financing with private lenders. |
Product Offerings
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Mortgage Brokers and Mortgage Agents are able to access the mortgage products of several lenders giving them access to various programs, lending options, and ability to shop and compare all of the mortgage rates available in the market.
Mortgage Brokers and Mortgage Agents can access financing through private lenders.
|
Mortgage Development Officers only have access to the products available with that particular bank.
Mortgage Development Officers do not arrange financing with private lenders. |
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785
by email at eblair@mortgageedge.ca
or you visit her website at: www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca
Mississauga – What exactly is mortgage loan insurance?
As a first time home buyer, you may have heard that you may have to pay a mortgage insurance premium.
You will have to obtain mortgage loan insurance when you purchase a home and if your downpayment is LESS than 20%. Remember that lenders do reserve the right to insure your mortgage even if your downpayment is greater than 20% and this decision is often based on the risk associated with the financing. The key players that provide mortgage insurance in Canada today are CMHC, Genworth and AIG United Guaranty. The newest insurer to join is AIG United Guaranty. There may be more mortgage insurers joining the industry who may apply to the OFSI (Office of the Superintendent of Financial Institutions) to become mortgage insurers in Canada. More competition will result in more choice and lower premium costs for Canadians who want to purchase a home.
Here is a sample breakdown to help you understand how a mortgage insurance premium is calculated for a buyer who wants to purchase a home with a 5% downpayment.
Price of home being purchased |
(A) $242,000 |
Your saved 5% downpayment |
(B) $12,100 |
Price less downpayment (A) – (B) = |
(C) $229,900 |
Insurance Premium calculated for a 5% downpayment is 2.75% of amount $229,900
Total mortgage loan insurance premium is à |
(D) $6,322.25 |
Total amount advanced to you by the Lender total mortgage amount (C) + (D) = |
$236,222.25 |
The lender who is reviewing your mortgage application will include the mortgage insurance premium (on your mortgage commitment) as part of your total mortgage loan and this is repaid over the term of your mortgage loan. You can also pay this premium up-front, on closing date, if you prefer.
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It is also important to point out that the mortgage loan insurance premium (calculated in example above) is also subject to provincial sales tax and this tax amount is not included in the total loan amount therefore you would have to pay this sales tax on your closing date.
Here below is a table that gives you an idea on what the typical mortgage loan insurance premiums are, but you should go directly to the various insurer websites to check the current insurance premiums when you are ready to buy.
The mortgage loan insurance premium charges are calculated as follows:
Financing Needed on the Purchase |
Insurance Premium
|
Up to and including 65%
|
0.50 %
|
Up to and including 75% |
0.65 %
|
Up to and including 80% |
1.00 %
|
Up to and including 85% |
1.75 %
|
Up to and including 90%
|
2.00 %
|
Up to and including 95%
|
2.75 %
|
You may be asking, so why do I need mortgage loan insurance, is it mandatory, and who does it protect?
Why do I need mortgage loan insurance? It is the lender who requires the mortgage loan to be insured. The mortgage lender passes along the cost of insuring that mortgage, along to the consumer.
Is mortgage loan insurance mandatory? No. There are a few mortgage lenders, on the market, who may provide you with mortgage financing without mortgage loan insurance but there will most certainly be a much higher interest rate offered as well as other administrative fees that could be added to the mortgage loan amount. These other mortgage lenders can be accessed through the mortgage broker community.
Who does mortgage loan insurance protect? Mortgage loan insurance is required by the mortgage lender because it protects the lender, if, the borrower, for some reason, cannot pay their mortgage.
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785
by email at eblair@mortgageedge.ca
or you visit her website at: www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca
Mississauga – Pay off high interest debts
If you are already a home owner, you will likely have equity in your home. Using that equity to pay off your consumer debts may be an option that will ease some of the stress of paying high interest debts over a long term. Instead of paying your credit card debts at 18 – 28% interest, you may be able to consolidate that debt into your mortgage and pay it off at less than 6%.
Current Debt Position |
Balance |
Monthly Payment |
1st Mortgage at 5.7 % (amortization 19 years) |
$220,000.00 |
$1,573.78 |
2nd Mortgage at 14% |
$40,000.00 |
$469.55 |
Car Loan and Credit Cards |
$18,857.00 |
$915.71 |
Total Mortgages + Car Loan + Credit Cards |
$278,857.00 |
$2,959.04 |
|
|
|
New Debt Position |
Balance |
Payment |
New Mortgage at 5.25% (amortization 19 years) |
*$278,857.00 |
$1,926.60 |
2nd Mortgage at 14% |
$0.00 |
$0.00 |
Car Loan and Credit Cards |
$0.00 |
$0.00 |
Total Mortgage + Car Loan + Credit Cards |
$278,857.00 |
$1.926.60 |
Total Monthly Saving: $2,959.04 – $1,926.60 = |
$1,032.44 |
|
*CMHC insurance fees and cancellation penalties may apply. This example is illustrative only. Interest rates are subject to change without notice. |
Consider above, a recent client with a mortgage balance of $220,000, a second mortgage at $40,000 and other debts totalling $18,857. By consolidating the two mortgages, the car loan and the high interest credit cards, the client was able to reduce monthly payments and save $1,032.44 per month. It is important to note that for this exercise to bear real financial fruit, this monthly saving should be applied to either an investment or as additional principal payments against the new mortgage. All too often, the additional cash flow is consumed resulting in a similar crisis a few years down the road.
Such a consolidation will not only reduce monthly debt load but will improve and protect your credit rating, a major consideration for any Canadian seeking future loans. Missed or late payments are not the only factors that can reduce your credit rating in the eyes of financial institutions, credit cards and lines of credit that are “maxed out” have the same negative impact. You should always know, validate and protect your credit rating as much as your SIN number and credit cards. When it comes time to renew your mortgage finance, you will be glad you kept your credit rating in good standing.
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785, by email at eblair@mortgageedge.ca or you visit her website at: www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca
Keeping up with your growing list of contacts
When I decided to move into the mortgage financing business, I realized very quickly that there were a good number of people that I would be interacting with, on a daily basis……..lenders, clients, prospects, lawyers, appraisers, lenders, property inspectors, financial planners.
It was after my first year, that my husband asked me how I was keeping track of everyone. I pulled out the piles of business cards that I had been collecting over that first year and my husband shook his head in disbelief. He told me that we were going to purchase a database management software program to help me get organized and I must admit that I was delighted to know that my own memory was going to finally get a break.
We purchased a software called ACT. I went ahead and downloaded their 30-day trial version and by the 2nd week of utilizing the software, I was hooked. It was no longer a “nice to have” but moved to a “must have”. Now in my third year of business, I know that I could not have possibly managed the contacts I have today. I now have just over 600 contacts in my database and each day I add another name or two. The software has allowed me to organize the data to retrieve customized reports and also help me to keep in touch with business partners, clients and prospects.
As my business continues to grow, I know that it was one of the best purchases I have ever made for my own business.
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth Blair services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785, by email at eblair@mortgageedge.ca or you visit her website at: http://www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca
Using your home equity for home improvements
You may be thinking about the projects that need to be completed around your home; landscaping the garden, rebuilding a patio or fence, changing older windows and doors, a new roof, or even remodeling a basement, kitchen or bathroom. Tune in to some of the recent popular TV programs like “Extreme Makeover Home Edition” and you will surely catch the bug.
If you live in a freehold house, you should be spending an average of 1% of your home value annually on maintenance just to keep it in good repair and to prevent it from declining in value, according to “Home Buying for Dummies” by Eric Tyson and Ray Brown. Professional home improvements and renovations, according to the Appraisal Institute of Canada’s 2004 Home Renovation Survey, can provide homeowners with the following return on their investments:
Top Four Renovations that will give you the Highest Payback Potential
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Bathroom renovations (75-100%) Kitchen renovations (75-100%) Interior painting (50-100%) Exterior painting (50-100%) |
Other Renovations Payback Potential
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Roof shingle replacement (50-80%) Furnace/heating system (50-80%) Basement renovation (50-75%) Recreation room addition (50-75%) Installing a fireplace (50-75%) Flooring (50-75%) Constructing a garage (50-75%) Window/door replacement (50-75%) Building a deck (50-75%) Central air conditioning (25-75%) |
Six Renovations that will give you the Lowest Payback Potential
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Landscaping (25-50%) Interlocking paving (25-50%) Building a fence (25-50%) Asphalt paving (20-50%) Adding a swimming pool (10-40%) Installing a skylight (0-25%)
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How do you find the cash to pay for these various projects? If you are already a homeowner, you will likely have equity in your home. Equity is the present fair market value of the property less your outstanding mortgage amount. Using that equity to finance home renovations is a real option. You may borrow up to 100% of the value of your home, based on certain criteria. Contact Elizabeth to find out how you can access your home equity to pay for projects you may have this year.
This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth Blair services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785, by email at eblair@mortgageedge.ca or you visit her website at: http://www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca
Watch that mortgage renewal date
Watch your mortgage renewal statement and ensure your renewal does not sneak up too quickly or you will not have time to negotiate the best deal !
Did you know that your current lender must send you a renewal statement at least 21 days before the end of your mortgage term. I suppose that lenders wait this late to send you a renewal notice so that you have little time to negotiate or shop around for a better mortgage rate. When you receive your renewal, you will probably be very surprised to see that the rates offered are not the lowest or most competitive rates in the market.
Give yourself more than 21 days to explore your mortgage renewal.
Find your mortgage contract or your latest annual mortgage statement to find out what your exact renewal date is then mark your calendar to begin looking about 120 days before your renewal date. If your bank has not given you the most competitive or lowest rate, you do have the option to leave that lender.
If you are seeing higher rates on that renewal statement, ask yourself this question……why would you spend your time badgering your bank for a better rate when you are entitled to the best rate the first time? Please call me so I can show you how you can SWITCH your mortgage to a new lender and at no cost to you.
This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785, by email at eblair@mortgageedge.ca or you visit her website at: http://www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca
Planning for your first home purchase
This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. Elizabeth services clients in Mississauga and all over the Greater Toronto area.
You can contact Elizabeth directly by phone at (905) 510-5785, by email at eblair@mortgageedge.ca or you can visit her website at: www.missmortgage.ca
Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) http://www.imba.ca