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On February 16, Finance Minister Jim Flaherty announced new mortgage rules intended to help ensure homebuyers can handle their debt load when interest rates rise, as well as to slow down real estate speculation. 

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one.  Our government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," commented Minister Flaherty.

The new rules take effect April 19, 2010.  Here is a quick look at the changes, which apply to government-backed insured mortgages: 

1. Borrowers must now qualify based on a five-year fixed rate even if they choose a mortgage with a lower interest rate and shorter term.  The government’s rationale for this change is that it will help borrowers prepare for higher rates, although it may squeeze the purchasing power of home buyers.  It remains unclear whether borrowers must qualify at the five-year posted rate or the five-year discounted rate. 

2. The maximum amount Canadians can withdraw in refinancing their mortgages will be reduced to 90 per cent of the value of their homes, instead of 95 per cent.  The government’s rationale for this change is that it will help ensure home ownership is a more effective way to save.  The impact of this change is expected to be minimal as relatively few homeowners withdraw equity from their homes to this extent. 

3. A minimum down payment of 20 per cent will be needed for government-backed mortgage insurance on non-owner-occupied properties “purchased for speculation,” which realistically means rental properties.   While this measure is intended to hamper the speculative buying of properties by reducing the leverage of buyers, it will also impact those buying real estate for general investment purposes.

Be sure to talk to us to determine if these changes could affect you and for advice on the mortgage strategy that fits your needs.     

Coming up with a 5% down payment isn’t always easy, especially when you still have to cover closing costs, moving expenses, renovations, and all the other costs that come with buying a home. With a Free Down Payment mortgage the lender provides up to the 5% minimum down payment on your behalf when you take out a 5 or 7 year fixed rate mortgage. OAC

The 5% is given to the lawyer on your behalf when the mortgage closes so it can be used as your down payment. If you have your own down payment saved but would like some extra cash on hand after your purchase, the cash back could be used any way you like. Keep in mind, even with a Free Down Payment, you will still need some money of your own to cover the closing costs such as legal fees, property purchase tax (if you are not a first time buyer) and property taxes etc.

We would be happy to see if a cash back or Free Down Payment mortgage would work for you. We can also help you get a realistic idea of the total closing costs for a new purchase. Of course, as with most personal mortgages, you pay no broker fees to use our services. We are paid by the lender!

Contact us for more information or to start the process to buy your first, or next home.

First-time homebuyers who are Canadian residents can withdraw up to $25,000 from their RRSP TAX FREE. Through Canada’s Home Buyers Plan (HBP) you and your spouse can each withdraw up to $25,000 (as of the 2009 federal budget) to build or buy a qualifying home.

Getting access to your RRSPs through the HBP is fairly easy. Fill out form T1036 at your financial institution for each withdrawal. Then make sure to file an income tax return for the year of the withdrawal and each year thereafter, until the RRSP is fully repaid.

Keep in mind there are a few rules:

· To qualify, you must be a first time home buyer and a resident of Canada at the time of withdrawal.

· You MUST purchase/build the home before October 1^st after the year of withdrawal.

· You only need to repay 1/15 of the borrowed amount starting in the second year after the year of withdrawal, or you’ll have to add the amount as income.

· RRSP contributions of up to 90 days before the withdrawal date can be used towards the HBP.

This is one of the only ways to withdraw from your RRSP tax free and a great way to get yourself into the real estate market. For more information about the HBP program go to the CRA website .

Many home sellers at some point entertain the idea of becoming landlords and renting out their current homes rather than selling. I realize being a landlord in not for everyone but this is how I got into having a rental house myself in the past and it worked out very well. A portion of the rent received can be added to your income and can make the process of getting into a second house for yourself very realistic. I would be happy to explore that avenue with you if it is something you are considering.

If you would like to receive weekly rate updates please let me know and I will add you to my rate mail distribution list while you are in the market.

If there is anything I can do you assist you in your process please do not hesitate to ask. I have various resource pieces available that may assist you including:

1. Sample purchase contract
2. Property financing feature sheet
3. Property feature checklist- required by lenders & CMHC for financing.
4. Moving checklist
5. How to Sell Your Home for More Guide
6. Seller disclosure form
7. Buying a home guide
8. Buy first or sell first considerations
9. First time buyer's guide (great for you to share with prospective buyers buying their first home)
10. Lawyer recommendations: I have gift certificates I can offer you towards legal fees.
11. Recommended realtors, and appraisers. I have realtors which I recommend who offer no obligation / no pressure market evaluations to ensure your home is priced correctly. Some offer no charge third party staging consultation with listings as well as 2 Air Miles per dollar of selling price if you decide to list with them in the future.
12. Property manager recommendations if you want to consider being a hands off landlord.
13. And more.

I am happy to provide you this information at no charge, just let me know what you need. All I ask is for you to consider me for your own, or your potential buyer's mortgage needs. I am also happy to provide a second opinion if you are looking at your mortgage options already. There is no fee for my service, the selected lender pay me a finder's fee for most personal mortgages OAC. Simply call or email me for more information.

If you have any questions or require any further information please do not hesitate to contact me. If you know of someone selling their own home or in the market for a new home, or looking for a new mortgage feel free to forward this message, I always appreciate the referrals!

Call or email for more information.

-Brian

Step 1: Mortgage Pre-Approval 
Arranging a pre-approved mortgage is one of the most important steps in the buying process.  It not only protects you in the event of an interest rate increase, but also provides you and your realtor a starting point for looking at homes – the last thing you want is to find your dream home and then be short of financing.  We can obtain a pre-approval for you promptly. 

Step 2: Go Shopping 
This is where a good realtor makes all the difference.  He or she will help you find a property that suits your needs and ensure any contract to purchase protects you.  With such an important decision, expert guidance is a crucial element.  If you do not have a realtor already, we would be happy to make a recommendation.

Step 3: Mortgage Application 
Once you have found a home and signed a contract to purchase, we will ask you for income and down payment confirmation, as well as any other information required.   

Step 4: Subject Removal 
Subject removal happens once you have received confirmation that your mortgage is unconditionally approved.  We will walk you through this process along with your realtor.  You can also opt for mortgage insurance coverage such as Mortgage Life Protection, Mortgage Critical Illness Protection and Mortgage Disability Protection.

Step 5: Legal Documentation 
At this stage, we and your realtor will arrange for documentation to be sent to your lawyer.  Usually the lawyer/notary will call you one to two weeks before the closing to make an appointment for you to sign the mortgage and title transfer documents. 

For expert advice throughout the mortgage process – and o find a mortgage that’s right for your needs – contact us today. 

With holiday purchases – a lot of them put on plastic – soon coming due, many Canadians are sorting through bills and realizing that they have too much high-interest credit card debt.  This new year, consider taking charge of borrowing costs by paying off higher-interest consumer debt with funds secured through mortgage financing. 

A common mortgage option for consumers which offers flexibility is a Home Equity Line of Credit – or HELOC – which allows you withdraw funds as needed for a set period.  The real benefit is that you can put a HELOC in place for a one-time cost and charge up then pay down the line of credit many times over, never needing to re-qualify.  Your payments fluctuate depending on current interest rates and the outstanding balance over the month.  A HELOC can be convenient for paying off higher interest debts, as you withdraw and pay (relatively lower) interest on only what you need. 

Mortgage refinancing also offers a plan to reduce your debt – after the agreed upon amortization period, your balance is zero.  With HELOCs, after the set draw period, there may be an amortization period during which any outstanding amount is repaid.  In contrast, with revolving credit – such as credit cards – you may be paying a lot in interest without ever reducing the principal.  

You may be surprised to learn how much you can save with a debt consolidation strategy.  We can offer expert advice on smart ways to manage your debt.  Contact us to access your options today! 

Build equity
When you purchase your own home and make mortgage payments, you accumulate equity in the property. You may borrow against this equity or convert it into cash when you eventually sell your property.

Stabilize housing costs
While rent typically increases from year to year, with fixed-rate and some variable-rate mortgages your payments remain unchanged throughout the term of the financing. The impact of inflation over the years means you pay the same amount, but in devalued dollars.

The opportunity to profit from appreciation
Housing has historically increased in value over time. At the same time as you build equity by making mortgage payments, what you can get when you sell your home may increase over the long term.

Enjoy tax benefits
Homeowners can enjoy tax benefits not available to renters. Portions of the interest paid on your mortgage may be tax deductible, and capital gains when you sell your home are in most cases tax exempt – your Invis mortgage professional can provide you with more information and guidance.

Ultimately, buying a home isn’t only about money. Home ownership makes it easier to put down roots in your community, and can give you a new sense of pride in your surroundings. You have full freedom to renovate your space to fit neatly with your family’s lifestyle.

Talk to us today about your own home financing options.

About Us

We are part of a national team of mortgage professionals serving Canadians from coast to coast. We provide expert, unbiased mortgage advice to first time homebuyers as well as those looking to renew or refinance their mortgage, purchase investment properties, or consolidate debts.

As life changes, a regular once-over helps keep finances in shape

For many Canadians, financial matters are about as enjoyable as their yearly physical exam. But the current low-rate environment may make it a good time for homeowners to become proactive about their overall financial health by taking a close look at one of their most important obligations – their mortgage.

A mortgage isn’t something you should sign once every few years and then forget about. Life can change substantially in a year, and a regular review can help ensure that your mortgage is still the right fit for your financial situation.”

A number of major life changes may call for a review of your mortgage, such as starting or growing a family, starting a business, loss or interruption of income, home renovations, purchasing investment property or other major expenditures. A mortgage professional can assess a homeowner’s current interest rate, payments and other mortgage terms, determine available home equity, and recommend options that may help them better reach their goals.

We can offer some common reasons to revisit your mortgage:

1. Paying down your mortgage faster: If you receive extra cash like a tax refund, work bonus or an inheritance, think about putting it toward your mortgage. For example, paying an extra $3,000 once every year toward the principal on a $250,000 mortgage can result in interest savings of $42,442 over the life of the mortgage, assuming a 25-year amortization and a fixed rate of 4.19%.

2. Lowering monthly payments: Renegotiating for a lower interest rate can protect your finances from unforeseen factors like a reduced income, and allow you to save up a rainy day fund.

3. Debt consolidation: Transferring high-cost consumer debt like a credit card balance to a lower interest rate by consolidating it into your mortgage can help you boost your cash flow to build up savings or pay down your debt faster.

4. Securing a Home Equity Line of Credit (HELOC): A HELOC can help you access lower-cost funds for investing, such as topping up your RRSP or TFSA contribution for the year. It can also help you pay for home improvement projects, so you can take advantage of the federal Home Renovation Tax Credit for eligible projects done before February 1, 2010.

5. Improving credit: We can coach you on how to improve your credit score, which can help you work toward future goals such as buying a vacation property for your family.

In some cases, a mortgage checkup may show that refinancing could improve your mortgage strategy. However, most mortgages require the borrower to pay a penalty if they pay off their mortgage in full before the maturity date. We can provide advice on what penalties you may incur and if refinancing is indeed your best option.

In the end, a yearly mortgage checkup could reveal that the best course of action is no change at all. Mortgage professionals can be excellent resources to help homeowners better understand their financing options, whether they’re buying a new home or staying put.

To arrange a checkup, please contact:

Brian @ 250-819-8176 or Starr @ 250-574-0115

Invis is one of Canada's largest mortgage brokerage firms with a national team of mortgage professionals. Invis mortgage professionals provide expert, unbiased mortgage advice to first-time homebuyers as well as those looking to renew or refinance their mortgage, purchase investment properties, or consolidate debts.

Mounting credit card debt is a problem for many Canadians these days. If you find that you’ve been overspending, it makes sense to look into how to limit your exposure to credit card debt, and the stress that comes along with it. Here are some suggestions:

• Limit cash advances.

• Know the grace period on your credit card.

• Pay off credit card debt in full monthly to avoid high interest costs.

• Limit card usage for a specified period of time to help you reduce credit card debt.

• Make it a personal rule to spend only what you can pay off in a given month.

• Sign up for loyalty programs and make your dollar worth more.

• Make paying off debt a priority in your financial plan.

• If you find that you cannot pay down your credit card debt to your satisfaction, you may wish to consider a mortgage strategy to consolidate this debt at a lower interest rate.

About Us

We are part of Invis, Canada's largest independent mortgage brokerage firm with a national team of over 800 mortgage professionals. We provide expert, unbiased mortgage advice to first time homebuyers as well as those looking to renew or refinance their mortgage, purchase investment properties, or consolidate debts.  Contact us for more information or to review your mortgage financing needs.