On my last Blog writing I mentioned the subject Buyers Market. This blog will explain what a buyers market is and what terms you can ask for.
Buyer's Market is when there are more houses up for sale than there are buyers. The buyers have choice in what they choose and have time to ask for terms since the house will probably not be sold under them. The homes are slow to get sold and the sellers who really want/need to sell will listen to what the buyer is asking for. The sellers will negotiate to get their house sold.
What should you be doing in a buyers market while looking for a home.
1) Choose and have a Realtor you like and trust. When it comes time for negotiating for a house you want your Realtor to be there for you.
2) Have your Realtor send you updates. Especially updates on price changes.
3) Make a list of what you must have in your future home. Make sure your Realtor knows this list so both of you are not wasting your time. If you don't know what you like then go to several "open houses" to find out. ( http://www.comoxvalleyopenhouses.com ). The more clear and concise you can be to your Realtor the better chance they will only show you what you want , or a close enough choice from the range of homes on the market.
4) Go to homes that have been on the market for 30 days or more. These sellers are looking for a sale and you may get what you want for less. Renovations may be affordable to get you exactly what you want. Make sure you are realistic on what renos you can do and what renos would have to be jobbed out.
5) If you are interested in a house make sure your Realtor has the comparables for that nieghbourhood. These are the dollar amounts that the houses sold for in that nieghbourhood in the last 6 months to a year.
6) Ask for a credit. Don't lowball on the price, people just get annoyed at that and shut down. If you don't like the carpets, paint color or the appliances then just ask for a credit since you will need to change that to make it your home. Be realistic in the cost of replacing and negotiate with the sellers. If your offer is fair, then they usually will have no problems with the offer.
7) Ask for things that are already in the home. If the window treatments are not included but you like them , then ask that they stay. Appliances are usually negotiable. Go through the list to see what is staying with the house. Then if you like something ask if it can stay with the house. Everything is negotiable and the sellers will think you are serious in buying and will be open to new ideas.
8) Closing costs. Ask that the seller pay for your part of the property taxes for the rest of the year or any other costs associtated with you buying that house.
9) Building Inspection. If you are serious then you will probably have a building inspection. If the inspection comes up with some minor things and the building inspector has a money figure to back it up, ask for a credit on that money figure or ask that those minor repairs be done by the time you take over the house.
10) Short acceptance period. Just because the housing market has slowed down doesn't mean you can't ask for a fast reply on your offer. A 24 hour limit should be plenty for the sellers. Their house has been on the market for awhile and they should be ready to deal. If not they may not be ready to sell and you are wasting your time negotiating with them.
These are just some of the ways to get a house plus extras in which a seller does not feel "lowballed". Each house is unique. Your realtor may have more suggestions for credits or a lower price. Be open to ideas that will get the house price lower and you closer to owning the home.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Angela Kroemer Mortgage Professional
1.250.650.4182
Monday, October 31, 2011
Saturday, October 29, 2011
The "After Summer Motivated Housing Market" is Open
The weather has changed from hot to cool. The mountains have gotten their first sprinkling of snow around here,
With the cool weather, the "after summer motivated housing market" opens up. What is this market?
It is those houses that did not sell in the summer time. Usually the house price has an
advertised price drop in the Fall and the house owners are motivated to sell.
Why are they motivated?
If you do your homework you may find out:
- they have bought another house and have already moved in to new house
- they have secured a job outside of the Comox Valley and need to move this house now
- there was a break up of the relationship and they want to move on with their lives
- they can't afford to keep their house because of their own personal economic conditions
A price drop does not necessarily mean there is some thing wrong with the house.
The owners just need to sell it.
This year it has been a buyer's market -- which means the buyer stipulates the terms and it is up to the seller to accept or not. If the seller is motivated they will consider all terms.
Also , this year our Lenders are motivated. They are willing to go above and beyond to get our clients a mortgage.
With this mix of a Buyers Market and Motivated Lenders it is a very good mix for people who may not qualify for a mortgage in "good times" to qualify for one now.
If you want to know if you qualify and for how much, contact me. There is no obligation and it is a free service. It takes about an hour to fill out an application. It can be done over the phone. That hour spent could get you in a place of your own by Christmas.
Remember our Lenders are Motivated.
Run anything by me and I will see what I can do.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
With the cool weather, the "after summer motivated housing market" opens up. What is this market?
It is those houses that did not sell in the summer time. Usually the house price has an
advertised price drop in the Fall and the house owners are motivated to sell.
Why are they motivated?
If you do your homework you may find out:
- they have bought another house and have already moved in to new house
- they have secured a job outside of the Comox Valley and need to move this house now
- there was a break up of the relationship and they want to move on with their lives
- they can't afford to keep their house because of their own personal economic conditions
A price drop does not necessarily mean there is some thing wrong with the house.
The owners just need to sell it.
This year it has been a buyer's market -- which means the buyer stipulates the terms and it is up to the seller to accept or not. If the seller is motivated they will consider all terms.
Also , this year our Lenders are motivated. They are willing to go above and beyond to get our clients a mortgage.
With this mix of a Buyers Market and Motivated Lenders it is a very good mix for people who may not qualify for a mortgage in "good times" to qualify for one now.
If you want to know if you qualify and for how much, contact me. There is no obligation and it is a free service. It takes about an hour to fill out an application. It can be done over the phone. That hour spent could get you in a place of your own by Christmas.
Remember our Lenders are Motivated.
Run anything by me and I will see what I can do.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Friday, October 21, 2011
Why Have Mortgage Brokers If We Have Banks?
The questions below are the questions I get asked most frequently about being a mortgage broker.
Why have mortgage brokers if we have banks?
Don't the banks do a great job on mortgages?
What is the difference between a bank and a mortgage broker?
I have always had my mortgage at a bank what can you do for me that is different?
Mortgage Brokers have been available to clients for over 30 years. It has changed and evolved in those years to become one the most economical, efficient, flexible way of getting a mortgage.
The History of The Mortgage Broker
When mortgage brokering started in Canada it was primarily for those who only had bad credit. The mortgage broker was able to secure a lender for the mortgage at higher interest rates because of the risks involved with dealing with clients that had bad credit. The Banks would not lend to these clients.
About 20 years ago if someone said that they went through their broker for a mortgage it would be the tell tale sign that they had bad credit. So it was normal to associate mortgage brokers with bad credit.
Fast forward to 2011.
Mortgage Brokers Are Now For Everyone.
Many changes have taken place in the broker channel (network).
The growth of Canada spurred the need for more housing which meant more mortgages. The Banks primarily were the ones lending money for mortgages but without too much competition they could name their rates, policies and the Canadian client was at their mercy.
A basic understanding of what a Lender is:
The term "Lender" means the Lender is a Business that lends money to clients through mortgage brokers. They use mortgage brokers as their sales force, paying the mortgage broker a finders' fee, thus reducing their overhead, allowing for lower interest rates.
The federal government regulates these Lenders the same way they regulate the Banks. Which in Canada is very strict and structured.
As the demand for mortgages grew the Lenders saw the need for improved programs and more choices for the clients that wanted a mortgage. That was the start of what is known as “today's mortgage broker” . With the competition of the Banks and Lenders , the Canadian consumer has a choice like no other choice in history for their mortgage needs.
While the Banks are still pretty rigid on whom they deal with, the Lenders on the other hand have programs in place that just about cover everything imaginable in the world of mortgages. With the Lenders, the better the credit rating and stability of the client the lower the interest rate is charged. Thinking outside the box is one of the great qualities of these Lenders.
Why would a client choose a Mortgage Broker instead of a Bank?
more programs to choose from so the mortgage is tailored to you
fast approvals
usually lower interest rates
flexibility
constant evolving programs to suit you and your needs
peace of mind
mobile service
efficient handling of the mortgage
the choice in not dealing with a loan officer in a bank
over 50 lenders to choose from
friendly and informative advice
we want you to get your mortgage and will work very hard to facilitate that
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
1.250.650.4182
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Why have mortgage brokers if we have banks?
Don't the banks do a great job on mortgages?
What is the difference between a bank and a mortgage broker?
I have always had my mortgage at a bank what can you do for me that is different?
Mortgage Brokers have been available to clients for over 30 years. It has changed and evolved in those years to become one the most economical, efficient, flexible way of getting a mortgage.
The History of The Mortgage Broker
When mortgage brokering started in Canada it was primarily for those who only had bad credit. The mortgage broker was able to secure a lender for the mortgage at higher interest rates because of the risks involved with dealing with clients that had bad credit. The Banks would not lend to these clients.
About 20 years ago if someone said that they went through their broker for a mortgage it would be the tell tale sign that they had bad credit. So it was normal to associate mortgage brokers with bad credit.
Fast forward to 2011.
Mortgage Brokers Are Now For Everyone.
Many changes have taken place in the broker channel (network).
The growth of Canada spurred the need for more housing which meant more mortgages. The Banks primarily were the ones lending money for mortgages but without too much competition they could name their rates, policies and the Canadian client was at their mercy.
A basic understanding of what a Lender is:
The term "Lender" means the Lender is a Business that lends money to clients through mortgage brokers. They use mortgage brokers as their sales force, paying the mortgage broker a finders' fee, thus reducing their overhead, allowing for lower interest rates.
The federal government regulates these Lenders the same way they regulate the Banks. Which in Canada is very strict and structured.
As the demand for mortgages grew the Lenders saw the need for improved programs and more choices for the clients that wanted a mortgage. That was the start of what is known as “today's mortgage broker” . With the competition of the Banks and Lenders , the Canadian consumer has a choice like no other choice in history for their mortgage needs.
While the Banks are still pretty rigid on whom they deal with, the Lenders on the other hand have programs in place that just about cover everything imaginable in the world of mortgages. With the Lenders, the better the credit rating and stability of the client the lower the interest rate is charged. Thinking outside the box is one of the great qualities of these Lenders.
Why would a client choose a Mortgage Broker instead of a Bank?
more programs to choose from so the mortgage is tailored to you
fast approvals
usually lower interest rates
flexibility
constant evolving programs to suit you and your needs
peace of mind
mobile service
efficient handling of the mortgage
the choice in not dealing with a loan officer in a bank
over 50 lenders to choose from
friendly and informative advice
we want you to get your mortgage and will work very hard to facilitate that
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
1.250.650.4182
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Monday, October 17, 2011
More Property Tax Deferment Programs
Property Tax Deferment – 55 & older, surviving spouse, Person with a Disability
In the last couple of years taxes, gas, groceries and everything else has taken a huge jump and there is less money at the end of the month.
If you find that you are unable to come up with the money to pay your property taxes then one avenue you can follow is to defer them until you can make payments or until you sell your house. As always interest is added to the amount you owe. Below is more information:
http://www.sbr.gov.bc.ca/individuals/property_taxes/property_tax_deferment/about.htm
Property Tax Deferment – 55 & older, surviving spouse, Person with a Disability
The British Columbia Property Tax Deferment Program is a loan program that allows you to defer your annual property taxes on your home if you meet certain criteria.
To qualify, you must meet certain criteria as outlined below:
You are a Canadian citizen or permanent resident who has lived in British Columbia for at least one year immediately prior to applying for tax deferment benefits and be:
55 years or older during that calendar year (only one spouse must be 55 or older),
a surviving spouse, or
a person with a disability as defined by regulation:
To be considered for eligibility as a person with disabilities you are required to provide either:
a copy of either a recent letter confirming your Persons with Disability designation or your Release of Information Form from the Ministry of Social Development confirming you have the designation OR
a Physician Certification Form, completed and signed by your physician. The form explains the disability eligibility criteria for the Property Tax Deferment Program. The definition of "spouse" includes:
a marriage partner
a person who has lived with the owner as common-law husband or wife, including same-sex partners, for a continuous period of not less than two years You must have, and maintain, a minimum equity of 25% of the current BC Assessment value (other appraised values are NOT accepted), after deducting the UPPER limit of all outstanding mortgages, lines of credit and other charges on your home.
There is a one-time administration fee of $60 for a new approved agreement and a $10 annual renewal fee for approved renewals. You do not need to send payment with your application - these fees are added to the deferment account.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
In the last couple of years taxes, gas, groceries and everything else has taken a huge jump and there is less money at the end of the month.
If you find that you are unable to come up with the money to pay your property taxes then one avenue you can follow is to defer them until you can make payments or until you sell your house. As always interest is added to the amount you owe. Below is more information:
http://www.sbr.gov.bc.ca/individuals/property_taxes/property_tax_deferment/about.htm
Property Tax Deferment – 55 & older, surviving spouse, Person with a Disability
The British Columbia Property Tax Deferment Program is a loan program that allows you to defer your annual property taxes on your home if you meet certain criteria.
To qualify, you must meet certain criteria as outlined below:
a surviving spouse, or
a person with a disability as defined by regulation:
To be considered for eligibility as a person with disabilities you are required to provide either:
a Physician Certification Form, completed and signed by your physician. The form explains the disability eligibility criteria for the Property Tax Deferment Program.
a person who has lived with the owner as common-law husband or wife, including same-sex partners, for a continuous period of not less than two years
There is a one-time administration fee of $60 for a new approved agreement and a $10 annual renewal fee for approved renewals. You do not need to send payment with your application - these fees are added to the deferment account.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Saturday, October 15, 2011
Property Tax Deferment for Families with Children
In British Columbia the government has a program that will let you defer the property taxes if you are supporting at least 1 child under the age of 18.
It is a great tool if you need it, but you should also look at the implications in that you are charging up your property tax that will have to be paid eventually with interest. The good part is they use the Bank Prime Rate , at the present that would be 3% per year.
Second residences, such as summer cottages or rental properties, do not qualify for the tax deferment program.
Taxes paid to a First Nation are not eligible for the deferment program. You can only defer property taxes paid to a municipality or the province.
To qualify for the program, you must meet the following criteria:
For a more detailed description:
http://www.rev.gov.bc.ca/documents_library/brochures/PTD_Families_with_Children.pdf
If I can help you with your mortgage needs, please contact me.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
It is a great tool if you need it, but you should also look at the implications in that you are charging up your property tax that will have to be paid eventually with interest. The good part is they use the Bank Prime Rate , at the present that would be 3% per year.
Property Tax Deferment Program for Families with Children
The Families with Children Property Tax Deferment Program is a new option available to assist families during those years when household costs can be the highest. It is a loan program that allows you to defer all, or part of, the annual property taxes on your home for the 2010 and following tax years. To qualify, you must meet certain criteria as outlined below:Qualifications
You may defer taxes on your home where you live and conduct your daily activities.Second residences, such as summer cottages or rental properties, do not qualify for the tax deferment program.
Taxes paid to a First Nation are not eligible for the deferment program. You can only defer property taxes paid to a municipality or the province.
To qualify for the program, you must meet the following criteria:
- you are a Canadian citizen or permanent resident who has lived in British Columbia for at least one year immediately prior to applying for tax deferment,
- you are financially supporting, at the time of application, a dependent child who is under the age of 18 at any time in the calendar year in which you apply, and who
- lives with you full time in your home,
- lives with you at least part time under a shared custody arrangement, or
- does not live with you, but you pay support for the child, or are responsible for fees and/or living costs if they are attending school,
- you must have, and maintain, a minimum equity of 15% of the current BC Assessment value (other appraised values are not accepted), after deducting the upper limit of all outstanding mortgages, lines of credit and other charges on your home, and
For a more detailed description:
http://www.rev.gov.bc.ca/documents_library/brochures/PTD_Families_with_Children.pdf
If I can help you with your mortgage needs, please contact me.
Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Sunday, October 9, 2011
AMP After a Mortgage Brokers Name-- What Does That Mean?
If you have been searching for a mortgage broker you may have come across the same 3 letters beside some of the mortgage brokers you have researched.
AMP stands for Accredited Mortgage Professional.
Below is the explanation from CAAMP's website:
The Accredited Mortgage Professional (AMP) is the only national designation for Canada’s mortgage industry. Launched in 2004, the AMP designation was developed as part of CAAMP’s ongoing commitment to increasing the level of professionalism in Canada’s mortgage industry.
An increasing number of Canadian mortgage consumers are becoming more aware of the AMP designation and are increasingly seeking the advice of an Accredited Mortgage Professional.
The AMP sets a single national proficiency standard for mortgage professionals
http://mortgageconsumer.org/what-is-the-amp-designation
Why Use a Mortgage Broker That is an AMP:
Below is the explanation from CAAMP's website:
The biggest investment decision of your life just got easier!
The AMP designation differentiates mortgage professionals from others in the mortgage industry. It demonstrates their commitment to providing you with the highest level of service.
Purchasing a home is one of the most important investments of your life so you want to proceed with confidence.
Look for the expertise of an Accredited Mortgage Professional (AMP). AMPs are committed to finding mortgage products and services that best suit your needs.
You can feel confident when dealing with a mortgage professional who has met a high standard of ethics and is committed to ongoing training. AMPs are dedicated to offering in-depth product knowledge and service and most importantly, an AMP will provide a tailored solution for your unique financing needs.
The AMP represents access to the dedicated services of a professional who is focused on meeting your needs. http://mortgageconsumer.org/benefits-of-using-an-amp
In summary-- an AMP must maintain a certain goal of completing ongoing training each and every year to keep their designation. Which means that when receiving services from an AMP you know that their knowledge is up to date with the industry standards. Ethics and customer satisfaction is a key element for an AMP.
Thank you
Angela Kroemer AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
AMP stands for Accredited Mortgage Professional.
Below is the explanation from CAAMP's website:
The Accredited Mortgage Professional (AMP) is the only national designation for Canada’s mortgage industry. Launched in 2004, the AMP designation was developed as part of CAAMP’s ongoing commitment to increasing the level of professionalism in Canada’s mortgage industry.
An increasing number of Canadian mortgage consumers are becoming more aware of the AMP designation and are increasingly seeking the advice of an Accredited Mortgage Professional.
The AMP sets a single national proficiency standard for mortgage professionals
http://mortgageconsumer.org/what-is-the-amp-designation
Why Use a Mortgage Broker That is an AMP:
Below is the explanation from CAAMP's website:
The biggest investment decision of your life just got easier!
The AMP designation differentiates mortgage professionals from others in the mortgage industry. It demonstrates their commitment to providing you with the highest level of service.
Purchasing a home is one of the most important investments of your life so you want to proceed with confidence.
Look for the expertise of an Accredited Mortgage Professional (AMP). AMPs are committed to finding mortgage products and services that best suit your needs.
You can feel confident when dealing with a mortgage professional who has met a high standard of ethics and is committed to ongoing training. AMPs are dedicated to offering in-depth product knowledge and service and most importantly, an AMP will provide a tailored solution for your unique financing needs.
The AMP represents access to the dedicated services of a professional who is focused on meeting your needs. http://mortgageconsumer.org/benefits-of-using-an-amp
In summary-- an AMP must maintain a certain goal of completing ongoing training each and every year to keep their designation. Which means that when receiving services from an AMP you know that their knowledge is up to date with the industry standards. Ethics and customer satisfaction is a key element for an AMP.
Thank you
Angela Kroemer AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Friday, October 7, 2011
Income to Qualify for a Mortgage
What type of income qualifies for a mortgage is varied and depending on how long you have been receiving a type of income depends whether it qualifies or not. Below is the different types of income and the documents needed to qualify for a mortgage. Most Lenders require at least 2 years of history of income.
If you have income and are not sure if it qualifies, contact me and we can go through an application and see what the Lenders think.
Salaried Employees
Usually, 100% of the client’s salary is used as income with the following documents available to support this income:
Employment letter - must be current on company letter head (including full address, contact information phone, fax, e-mail) and be signed and dated confirming salary, employment, and position, and when applicable, overtime, bonuses, pending increases or car allowances should be documented in the letter.
Pay stub – must be current and indicate the rate of pay, pay period, net and gross income, taxes and benefit deductions
Also for salaried employment the following may be used :
Overtime- Overtime may be used to qualify the borrower provided there is a proven track record and the opportunity for continued overtime exists for the future. At least a 2 year track record .
Car Allowance - A car allowance may be considered as income if it is a “perk” of the job and a car is not needed to perform the job.
Bonuses - same documents needed as overtime
Hourly Employees:
2 recent pay stubs, job letter and 2 year's notice of assessments are the preferred documents to confirm your client’s income.
The job letter must contain weekly average hours worked, hourly rate,year-to-date-earnings, how long employed,position.
The employment letter must be on company letterhead and signed by an authorized person of the company.
Tips:
Can only be used if you claim them on your income tax returns. 2 years notice of assessment showing income from tips is used.
Seasonal Employees:
Will need a 2 year average with documents supporting that you return each year for employment.
Being a seasonal employee employment insurance payments are also used.
Part Time, Second Job or Work for a Relative :
This income can be used as long as it is backed up with pay stubs, notice of assessment and employment letter and you will be continuing with these jobs in the future.
Maternity Leave:
100% can be used with a letter confirming that you will be returning to the same pay and position.
Child Tax Credit:
Can be used as long as the children are under 12 years of age. If you have a child older than 12 and a second child younger than 12 then you can use half of the benefit that your receive. The child tax benefit notice and a bank statement showing it is going into your bank account is required.
-- Universal child tax credit is paid until a child turns 6. If you have a 5 year mortgage term then it may only be used if the child is 1 or less in age. The benefit notice and a bank statement showing it goes into your bank account is required.
Workers Compensation:
Can be used if you have documentation on how long you will be away from work and confirmation you are returning back to work with the same pay and position.
Long Term Disability:
These payments can be used as well. Documentation needed is 2 years notice of assessment, a doctors note outlining your illness and that it is either progressing or not getting any better , the Lenders may want to see the bank statement to verify that payments are going into your bank account.
Short Term Disability:
Will need a letter from your employer that you will be returning to work at the same position and same pay when your short term disability payments are finished. Documents to verify that you are receiving short term disability.
Pensions:
Any pensions can be used as income. Again prove that you are receiving the pensions. So notice of assessment from the last 2 years, copy of bank account, the form that they send you at the beginning of the year stating what your pension will be in monthly payments for the year.
Self employed:
Ideally the lenders would like to see the last 2 years of notice of assessments. But, if you had been employed in a field and then left that employment to start your own business in the same field of work, they would look at your earnings and what you made while self employed. Then decide if you need more documentation for a longer time period.
Rental Income:
More and more Lenders are allowing the rental income. You will need a signed lease. The Lenders will look at each case and decide.
Thank you
Angela Kroemer AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
If you have income and are not sure if it qualifies, contact me and we can go through an application and see what the Lenders think.
Salaried Employees
Usually, 100% of the client’s salary is used as income with the following documents available to support this income:
Employment letter - must be current on company letter head (including full address, contact information phone, fax, e-mail) and be signed and dated confirming salary, employment, and position, and when applicable, overtime, bonuses, pending increases or car allowances should be documented in the letter.
Pay stub – must be current and indicate the rate of pay, pay period, net and gross income, taxes and benefit deductions
Also for salaried employment the following may be used :
Overtime- Overtime may be used to qualify the borrower provided there is a proven track record and the opportunity for continued overtime exists for the future. At least a 2 year track record .
Car Allowance - A car allowance may be considered as income if it is a “perk” of the job and a car is not needed to perform the job.
Bonuses - same documents needed as overtime
Hourly Employees:
2 recent pay stubs, job letter and 2 year's notice of assessments are the preferred documents to confirm your client’s income.
The job letter must contain weekly average hours worked, hourly rate,year-to-date-earnings, how long employed,position.
The employment letter must be on company letterhead and signed by an authorized person of the company.
Tips:
Can only be used if you claim them on your income tax returns. 2 years notice of assessment showing income from tips is used.
Seasonal Employees:
Will need a 2 year average with documents supporting that you return each year for employment.
Being a seasonal employee employment insurance payments are also used.
Part Time, Second Job or Work for a Relative :
This income can be used as long as it is backed up with pay stubs, notice of assessment and employment letter and you will be continuing with these jobs in the future.
Maternity Leave:
100% can be used with a letter confirming that you will be returning to the same pay and position.
Child Tax Credit:
Can be used as long as the children are under 12 years of age. If you have a child older than 12 and a second child younger than 12 then you can use half of the benefit that your receive. The child tax benefit notice and a bank statement showing it is going into your bank account is required.
-- Universal child tax credit is paid until a child turns 6. If you have a 5 year mortgage term then it may only be used if the child is 1 or less in age. The benefit notice and a bank statement showing it goes into your bank account is required.
Workers Compensation:
Can be used if you have documentation on how long you will be away from work and confirmation you are returning back to work with the same pay and position.
Long Term Disability:
These payments can be used as well. Documentation needed is 2 years notice of assessment, a doctors note outlining your illness and that it is either progressing or not getting any better , the Lenders may want to see the bank statement to verify that payments are going into your bank account.
Short Term Disability:
Will need a letter from your employer that you will be returning to work at the same position and same pay when your short term disability payments are finished. Documents to verify that you are receiving short term disability.
Pensions:
Any pensions can be used as income. Again prove that you are receiving the pensions. So notice of assessment from the last 2 years, copy of bank account, the form that they send you at the beginning of the year stating what your pension will be in monthly payments for the year.
Self employed:
Ideally the lenders would like to see the last 2 years of notice of assessments. But, if you had been employed in a field and then left that employment to start your own business in the same field of work, they would look at your earnings and what you made while self employed. Then decide if you need more documentation for a longer time period.
Rental Income:
More and more Lenders are allowing the rental income. You will need a signed lease. The Lenders will look at each case and decide.
Thank you
Angela Kroemer AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Monday, October 3, 2011
Fixed Rate or Variable Rate......has the choice become easier?
September 29th 2011
The age old question facing consumers, do I take a fixed rate or variable rate......and a similar dilemma facing mortgage brokers as their clients ask them for advice on which option to take. We all know it depends on the client’s appetite for risk, affordability, cash flow stability, etc. however statistics have shown that taking a short term or variable rate has predominantly, but not always, been cheaper than take a longer fixed rate mortgage.
We maybe in or coming to an interest rate environment when taking a fixed rate or a hybrid mortgage (50/50) may actually be cheaper than staying in a variable rate. Why you ask.....let’s look at the facts as to why this maybe a good time to take a fixed rate or hybrid mortgage.
1. 5 year fixed rates are at the lowest levels in history, we have never been this low.....3.39% are available through many lenders and 2.99% for a 4 year is very attractive.
2. The gap between a prime - 0.40% (2.60%) and 5 year fixed rate (3.39%) is 0.79% and (in some cases even lower), this is down significantly from 3 to 4 months ago when the gap between a 5 year ARM and 5 year fixed rate was as high as 2.00%. If we consider a 4 year fixed rate at 2.99% versus ARM of 2.60% the gap is only 0.49% or two quarter point increases in prime.
3. You can’t predict when to time a conversion from ARM to Fixed rate, especially in a volatile market. Fixed rates have a tendency to move ahead of variable rates....when variable rates begin to rise the fixed rate has already gone up and if you convert you maybe converting at a much higher fixed rate than today’s rates.
No position is complete without looking at the counter arguments’, in other words why a client should consider a variable rate versus fixed rate mortgage. Once again let’s look at the facts.
1. Bank of Canada has indicated it is not looking at raising the overnight anytime soon or at least will hold off until such time as it sees the economy improving
2. There is no indication that inflation is increasing, therefore supports point 1 above.
3. U.S. has no plans to increase rates for the next two years making it more difficult for Canada to raise rates unless the Canadian economy is growing in spite of the U.S. being sluggish
4. Canada is becoming a safe haven for investors’ thus larger demand for Canadian bonds. This demand is keeping bond yields down thus lower fixed rates on mortgages.
Both positions have merit and no one has a crystal ball, however, if we continue to see the gap between fixed rate and ARM rates shrink then the risks of taking a variable rate versus fixed rate increases substantially. The risk being that ARM rates could increase higher than .79% % over the next 18 months to 24 months, therefore over the course of a 5 year term the fixed rate may actually be less costly than the ARM rate. If the gap between ARM and fixed gets is 1% or less, I believe the smart money would go to fixed rate versus ARM. If the gap between ARM rate and fixed rate is between 1% and 1.50% then a 50/50 mortgage maybe the best bet. If the gap between ARM and fixed rate is in the 1.50% to 2.00% range then ARM rate maybe the way to go. Based on the present volatile market conditions it is hard to predict or say what will happen, this volatility, is the biggest wild card and probably the main reason I personally would be taking a fixed rate or 50/50 versus an ARM, a bird in the hand (fixed rate) is better than two in the bush (ARM rate).
John Bordignon
EVP, Strategic Development, Paradigm Quest Inc.
Office: (416) 366-8606 ext 2294
Thank you
Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
The age old question facing consumers, do I take a fixed rate or variable rate......and a similar dilemma facing mortgage brokers as their clients ask them for advice on which option to take. We all know it depends on the client’s appetite for risk, affordability, cash flow stability, etc. however statistics have shown that taking a short term or variable rate has predominantly, but not always, been cheaper than take a longer fixed rate mortgage.
We maybe in or coming to an interest rate environment when taking a fixed rate or a hybrid mortgage (50/50) may actually be cheaper than staying in a variable rate. Why you ask.....let’s look at the facts as to why this maybe a good time to take a fixed rate or hybrid mortgage.
1. 5 year fixed rates are at the lowest levels in history, we have never been this low.....3.39% are available through many lenders and 2.99% for a 4 year is very attractive.
2. The gap between a prime - 0.40% (2.60%) and 5 year fixed rate (3.39%) is 0.79% and (in some cases even lower), this is down significantly from 3 to 4 months ago when the gap between a 5 year ARM and 5 year fixed rate was as high as 2.00%. If we consider a 4 year fixed rate at 2.99% versus ARM of 2.60% the gap is only 0.49% or two quarter point increases in prime.
3. You can’t predict when to time a conversion from ARM to Fixed rate, especially in a volatile market. Fixed rates have a tendency to move ahead of variable rates....when variable rates begin to rise the fixed rate has already gone up and if you convert you maybe converting at a much higher fixed rate than today’s rates.
No position is complete without looking at the counter arguments’, in other words why a client should consider a variable rate versus fixed rate mortgage. Once again let’s look at the facts.
1. Bank of Canada has indicated it is not looking at raising the overnight anytime soon or at least will hold off until such time as it sees the economy improving
2. There is no indication that inflation is increasing, therefore supports point 1 above.
3. U.S. has no plans to increase rates for the next two years making it more difficult for Canada to raise rates unless the Canadian economy is growing in spite of the U.S. being sluggish
4. Canada is becoming a safe haven for investors’ thus larger demand for Canadian bonds. This demand is keeping bond yields down thus lower fixed rates on mortgages.
Both positions have merit and no one has a crystal ball, however, if we continue to see the gap between fixed rate and ARM rates shrink then the risks of taking a variable rate versus fixed rate increases substantially. The risk being that ARM rates could increase higher than .79% % over the next 18 months to 24 months, therefore over the course of a 5 year term the fixed rate may actually be less costly than the ARM rate. If the gap between ARM and fixed gets is 1% or less, I believe the smart money would go to fixed rate versus ARM. If the gap between ARM rate and fixed rate is between 1% and 1.50% then a 50/50 mortgage maybe the best bet. If the gap between ARM and fixed rate is in the 1.50% to 2.00% range then ARM rate maybe the way to go. Based on the present volatile market conditions it is hard to predict or say what will happen, this volatility, is the biggest wild card and probably the main reason I personally would be taking a fixed rate or 50/50 versus an ARM, a bird in the hand (fixed rate) is better than two in the bush (ARM rate).
| Fixed Rate to ARM Gap * | Primary Product Selection |
| less than 1.00% | 5 year fixed rate |
| 1.00% to 1.50% | 50/50 |
| 1.51% or higher | 5 Year ARM |
| * difference in rate between a 5 year fixed rate and 5 year ARM rate |
EVP, Strategic Development, Paradigm Quest Inc.
Office: (416) 366-8606 ext 2294
Thank you
Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.
Saturday, October 1, 2011
Mortgage Brokers and The Lenders
As mortgage brokers we usually belong to a big firm. Mine is The Mortgage Group Canada Inc. This big firm secures Lenders. We as brokers have a list of lenders we can choose from.
What are Lenders ?
With TMG we have over 50 Lenders to choose from. These Lenders quite simply lend money for mortgages. The Lenders are well established, money lending businesses, with some being banks.
Since these Lenders do not have to hire salespeople to create business, they can offer lower interest rates because of their lower overhead expenses. As brokers we are their sales force and in return we are paid a commission from the Lender. This service is free to clients. (Charges may apply for very bad credit).
How do we choose Lenders for our Clients ?
When a client fills out an application with all information of of what they have (assets), what they owe (liabilities) and what they have coming in (income) we then can get a credit rating with the clients approval. With this credit rating we see the history of the clients credit. The mortgage broker also needs to know their client and what the client wants out of their mortgage. Some like to pay the mortgage off fast, some believe it will go on for 30 years and are happy with lower payments. If you are retiring in 3 years but have a 5 year mortgage term can you afford the last 2 years of payments with only your retiring income? With the most popular mortgage term being 5 years the client and broker have to look beyond the day you get your mortgage but look into the future and see if any life changes will affect the mortgage.
Each Lender has their own programs and policies they operate under. When they post their interest rate they also post a paragraph of what type of clients they are looking for. For example you may not be considered for the Lender of the lowest interest rate if you only have income from self employment, they may see that as an extra risk or if you want to buy a rental property that may be an extra risk and so they would charge a little higher interest rate. If you want a 5 year fixed rate and the Lender only wants to do a 5 year variable then again you would not fit into their program. The reasons are varied from Lender to Lender.
When we have a clients history we go to the Lender that will be the greatest fit for the client. This is where a brokers knowledge of the different Lenders and their client is the key to making the clients experience fast, less stressful and efficient.
As a client it is best to let your broker know of any changes that you can foresee coming up in the next 5 year span of the term of your mortgage. A perfect example of this is :
You want a mortgage but you know that in 3 years your trust account will be released to you and you will pay off the mortgage then. If you and the broker have not discussed this then the broker may put you in a mortgage with no prepayments ---at the end of 3 years you will have penalties to pay out your mortgage. If your broker does know, then they would put you into a 3 year mortgage or a 5 year mortgage that would allow you to pay off your mortgage without penalties.
Any questions, contact me.
Thank you
Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.comoxvalleymortgagestoday.com
What are Lenders ?
With TMG we have over 50 Lenders to choose from. These Lenders quite simply lend money for mortgages. The Lenders are well established, money lending businesses, with some being banks.
Since these Lenders do not have to hire salespeople to create business, they can offer lower interest rates because of their lower overhead expenses. As brokers we are their sales force and in return we are paid a commission from the Lender. This service is free to clients. (Charges may apply for very bad credit).
How do we choose Lenders for our Clients ?
When a client fills out an application with all information of of what they have (assets), what they owe (liabilities) and what they have coming in (income) we then can get a credit rating with the clients approval. With this credit rating we see the history of the clients credit. The mortgage broker also needs to know their client and what the client wants out of their mortgage. Some like to pay the mortgage off fast, some believe it will go on for 30 years and are happy with lower payments. If you are retiring in 3 years but have a 5 year mortgage term can you afford the last 2 years of payments with only your retiring income? With the most popular mortgage term being 5 years the client and broker have to look beyond the day you get your mortgage but look into the future and see if any life changes will affect the mortgage.
Each Lender has their own programs and policies they operate under. When they post their interest rate they also post a paragraph of what type of clients they are looking for. For example you may not be considered for the Lender of the lowest interest rate if you only have income from self employment, they may see that as an extra risk or if you want to buy a rental property that may be an extra risk and so they would charge a little higher interest rate. If you want a 5 year fixed rate and the Lender only wants to do a 5 year variable then again you would not fit into their program. The reasons are varied from Lender to Lender.
When we have a clients history we go to the Lender that will be the greatest fit for the client. This is where a brokers knowledge of the different Lenders and their client is the key to making the clients experience fast, less stressful and efficient.
As a client it is best to let your broker know of any changes that you can foresee coming up in the next 5 year span of the term of your mortgage. A perfect example of this is :
You want a mortgage but you know that in 3 years your trust account will be released to you and you will pay off the mortgage then. If you and the broker have not discussed this then the broker may put you in a mortgage with no prepayments ---at the end of 3 years you will have penalties to pay out your mortgage. If your broker does know, then they would put you into a 3 year mortgage or a 5 year mortgage that would allow you to pay off your mortgage without penalties.
Any questions, contact me.
Thank you
Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.comoxvalleymortgagestoday.com
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