Your Mortgage Contact

10 Items All Homebuyers Should Know When Looking For a New Home

2010-08-12T20:36:00.000-06:00

Are you gearing up to buy your first place, upgrading, or purchasing a vacation or investment property? Shopping for a home is exciting, exhausting, and a little bit scary. In the end, your aim is to end up with a home you love at a price you can afford. Follow these 10 tips before and during your home shopping to help you to avoid any surprises the may delay or put an end to your dreams.

1. Knowing What You Can Afford
As we've all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don't forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you'll know how much you can spend on your new home each month.
If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.

2. Speak to us to get Pre-qualified.
What you think you can afford and what the lenders are willing to lend you may not match up, especially if you have poor credit or unstable income. We will ask you to do a credit check and start to send us documentation for mortgage approval before you put in that offer to give you the best chance for a successful purchase. If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the lender won't lend you what you need, or that it's only willing to give you a mortgage that you find unacceptable.
Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract.

3. Consider Additional Expenses
Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike when you were a renter, you'll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).
If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing because you'll be part of a homeowner's association, which collects a couple hundred dollars a month from the owners of each unit in the building in the form of condominium fees.

4. Don’t Be Too Picky (Especially for First-time Homebuyers)
Go ahead and put everything you can think of on your new home wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list - you'll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5. Lacking Vision
Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks that are a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or staging that you'll end up paying $40,000 for. If you're on a budget, look for homes whose full potential have yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the Important Things
Don't get a two-bedroom home when you know you're planning to have kids and will want three bedrooms. By the same token, don't buy a condo just because it's cheaper when one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain.

8. Neglecting to Inspect
It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast - before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

9. Not Choosing to Hire an Agent or Using the Seller's Agent
Once you're seriously shopping for a home, don't walk into an open house without having an agent (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can see how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

10. Not Thinking About the Future
It's impossible to perfectly predict the future of your chosen neighbourhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.
Some questions you should ask about your prospective property include:
• What kind of development plans are in the works for your neighbourhood in the future?
• Is your street likely to become a major street or a popular rush-hour shortcut?
• Will a highway be built in your backyard in five years?
• What are the zoning laws in your area?
• If there is a lot of undeveloped land, what is likely to get built there?
• Have home values in the neighbourhood been declining?
If you're happy with the answers to these questions, then your house's location can keep its rose-coloured lustre.

The majority of the above information is from an article published in the Globe and Mail July 22nd, 2010.

We hope that following these 10 simple steps should make your home shopping experience much smoother. It should also help you to avoid any delays or regrets with your home purchase. Please feel free to contact us with any questions.

In addition we would like to announce that Kevin has received his Mortgage Associates licence and is able to assist you will all your mortgage needs. He can be contact by phone at 403-589-3021 or e-mail kevsas@telus.net. So please feel free to contact Betty or Kevin to help you with all your mortgage needs.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Associate

When Is The Best Time To Buy?

2010-07-16T10:20:00.001-06:00

What is happening to house prices? What is happening to interest rates? Both of these questions are asking the same thing; when is the best time to buy? Unfortunately, this question is appropriate for purchasing a property for strictly investment purposes but is not as critical when buying your home. The main reason is once you enter homeownership most people will be homeowners for over 50 years, whether it is the same home or different homes it is still your home. Yes your home is an investment, but we have to start thinking more long term instead of wondering how much the value will increase or decrease over the next six months. Even if your home increases in value in six months by $10,000 what does that do? If you sell, most likely the next home you buy will have also increased by the same amount. In addition, after you sell if you decide to wait because you feel house values are coming down in the near future, where are you going to live until the time comes when you purchase a home again? You can rent but the money you saved will quickly deplete with rent and other costs. Regardless if it is your first home or you sell and buy again, you must remember interest rates may go up or down during this waiting period which can also impact you overall cost.

So again, when is the best time to buy? The best time to buy is when you are ready and can afford it (the sooner the better). Again we must start thinking long term (25 plus years) instead of thinking what will happen in 6 months. Trying to time the market ups and downs is virtually impossible due to the multiple variables that come into play such as home prices, mortgage rates, and the other variables that affect the home prices and mortgage interest rates. This means that if you are just looking at the home prices and not taking into account other factors such as interest rates, you may be losing more than you think. If interest rates are increasing, the savings on the purchase price can be easily offset with the increased interest costs.

If you are truly looking to save money make sure you are making accelerated bi-weekly mortgage payments and take advantage of your prepayment privileges. By using these privileges you will be paying off your mortgage faster which can save you tens or even hundreds of thousands of dollars over the life of the mortgage. With accelerated bi-weekly mortgage payments alone this will add up to more savings then trying to time the market.

In summary whether you are purchasing your first home or thinking of upgrading the best time to buy is when you are ready and can afford it. Please contact us today as we are happy to help you with all your mortgage needs now and in the future.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Variable Rate Mortgage Discounts Looking Good!

2010-06-16T09:45:00.001-06:00

With fixed rates that have risen from all time lows and not likely to decrease again, variable rate mortgages may be an option for you. Also, with the rate discounts looking good it may be time to think about going with a variable. Currently the best variables are as follows:

*Prime rate today is currently 2.50%

1) 5 year variable closed at Prime – 0.60% (1.90%) – offered by one lender with great pre-payment privileges.
2) 3 year variable closed at Prime – 0.65% (1.85%) – offered by one lender with great pre-payment privileges.

One factor when deciding if a variable rate mortgage is for you is to know that as the prime interest rate fluctuates so can your mortgage payments. This means with today’s prime rate still at a very low level and expected to increase about 3% over the next three years, your payment may increase substantially. In addition with the new qualifying rules brought in place recently by the federal government you now must qualify at the 5 year bank rate which is currently 5.99%. Therefore you will not be able to qualify for as large of a mortgage as if you went with a 5 year fixed rate mortgage.

Please contact us today if you can handle the payment fluctuations and are able to qualify for your purchase at the higher qualifying rate or to inquire further if the variable rate mortgage is right for you.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Prime Rate Increased By 0.25% Today. Is There More To Come?

2010-06-01T16:28:00.000-06:00

The Bank of Canada today announced the bank rate has been increased by 0.25% to 0.50%. With this announcement the lenders have subsequently increased their prime rate 0.25% to 2.50%. Over the past few weeks this increase was widely expected as the lenders have increased their fixed mortgage rates a few times during this period. Prime at 2.50% is still considered historically low however, the big question is, are there more interest rate increases expected in the future and when.

The prime interest rate will be increasing in the future. Most economists expect the prime rate to increase another 2% to 3 % over the next 2 to 3 years. With today’s Bank of Canada announcement it is very uncertain whether the interest rates will increase quickly in the short term, stay low in the short term and then increase faster in the future, or increase gradually over time. According to the Bank of Canada future interest rate increases will be dependent on a few factors: 1) How well our economy is growing. If Canada`s economy continues to grow at this fast pace, provided today`s increase does not slow down the economy, expect to see another interest rate increase at the next scheduled rate announcement in 6 weeks. 2) Inflation. If inflation is still increasing and is near or over the Bank of Canada`s 2% target also expect an increase in interest rate in 6 weeks. 3) How other global economies are faring, such as the United States and Europe. The Bank of Canada will have to look at these other global economies and how they are prospering. The degree of influence these global economies are having on Canada`s economy will be factored into the next rate announcement in 6 weeks. Looking at these three factors should help us answer the question of when and how fast the prime rate will increase in the future.

What does this mean to your mortgage rates? Historically speaking those who choose the variable rate mortgage over fixed rates saved more interest over the long term. However, you must remember this is over the long term so trying to time the market and flip between variable and fixed rates can be quite difficult and usually never works. In addition, with the variable rate mortgage, over time your payments will fluctuate. This means with the expected increase in the prime interest rate of 2% to 3%, your payments will increase as well and can be very substantial. If you are able to budget for your payment fluctuations, variable may work for you. If you do not like your mortgage payments changing during the mortgage term then a fixed mortgage is best where the payments do not change for the duration of the term you chose.

Whether you choose to go with a fixed or variable mortgage rate it can be a lot of information to process. You must remember that the decision should be based on your situation and what you and are comfortable with, not what rumours you are hearing is best. Remember there is no wrong decision when it comes to your mortgage no matter what someone tells you as they do not know your situation. We can help you to look at your situation and help you decide the best mortgage for you so contact us today.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

New Lending and Insurer Guidelines Regarding Condo Conversions

2010-05-25T08:45:00.000-06:00

New lending and mortgage insurer’s guidelines have been recently announced in regards to condo conversions. Here is a list of documentation required up front by the lenders before the mortgage funds can be advanced.

1) The lenders and insurers need to know the actual upgrades performed to the building. An Engineer’s Report or Certificate of Completion ensures there are no structural issues with the building. This will show that construction is complete because the lender will not fund the construction costs on a conversion.

2) The title of the units must have separately registered titles. Sometimes developers will try to sell the units before the condo has been approved and there are no separate registered titles. This is not acceptable and a separate title must be available for the mortgage charge. The appraiser will comment on the legal description of the property or if there is no title.

3) The lenders and insurers will require a Certificate of Incorporation to show that a condo corp. exists, and is in place to handle any property issues that may arise.

4) The lenders and insurers will also need to address the condition of the building and future maintenance. For this, a Reserve Fund Study will be required. Since many conversions are older apartment buildings this will show us the current condition of the building and what maintenance will be over the next fifteen to twenty years. The Reserve Fund Study also outlines the amount of condo fees that should be paid and if there will be any immediate cash needs.

5) Condo financials, bylaws and proposed budgets are also required by the lenders and insurers to approve a condo conversion.

Therefore, for mortgages required for condo conversions, in addition to the regular mortgage approval requirements please provide the additional documentation mentioned up front to avoid any delays in mortgage funding or the deal falling through.

If you have any further questions in regards to condo conversions please contact us at your convenience.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Why Use Our Services As Mortgage Specialists?

2010-05-05T15:28:00.000-06:00

Even if you have used our services in the past, you may not be aware of all the benefits of our mortgage specialist services. In this newsletter we will explain the difference between using our mortgage specialist services compared to going directly to the bank.

1) Bank – Each time you inquire about a mortgage at a bank, before they can disclose to you an interest rate you will be required to go through the application process including a credit check. The interest rate the bank offers you is very dependent on your credit score. Therefore not only is this exercise time consuming but can also negatively affect your credit score. The multiple checks may lower your score thus affecting the interest rate the bank may offer you, potentially stopping you from purchasing the home of your dreams.

Mortgage Specialist – With our services only one application and one credit check is required. This not only saves you time but also has the least impact on your credit score. In addition we can also disclose to you the best interest rates available before the application process and as long as you meet the minimum credit requirements the best interest rates are available to you from the beginning.

2) Bank – The banks can only offer their line of products so they may not have the best mortgage rates and product for your situation.

Mortgage Specialist – We deal with multiple lenders who compete for your business. Combined with multiple products offered by these lenders, we can match the best product for your individual needs.

3) Bank- May not be offering you the best interest rate available due to your credit score or they just may not be offering you the lowest mortgage rate available on the market.

Mortgage Specialist – We have better interest rates than those offered to you by your bank. We deal with multiple lenders who compete for your business including major banks as well as non-bank lenders. The main difference between the two is that the non- bank lenders do not have branches like the major banks so all servicing of your mortgage is done by phone, fax, e-mail and mail. With the lower cost of not having branches, the non-bank lenders can potentially offer better interest rates and may be an option for your mortgage.

4) Bank – When you inquire about your mortgage at your bank not only will they speak to you about your mortgage, they will also try to sell you other products such as bank accounts and investments. Also the person you may be dealing with may only have limited knowledge about their mortgage products and experience as they are required to know so much about all of the products they sell.

Mortgage Specialist – Our specialty is your mortgage and we have extensive experience with hundreds of satisfied clients. With a home purchase most likely being the largest and one of the most important purchases in your lifetime, would you not want to have a specialist to help you with your individual needs?

5) Bank – Will be only available during bankers hours and appointments are usually necessary. Also you may be speaking with different people at the bank throughout the process.

Mortgage Specialist - We work flexible hours including evenings and weekends to discuss your mortgage at your convince. In addition no appointments are necessary and your mortgage can be started immediately over the phone with no obligation. Also you will only be speaking with Betty and Kevin, both of whom know your individual needs so you will not have to continually explain your story over and over again.

If you know of anyone that you think may require mortgage financing, please forward this newsletter so they’re aware of our services as mortgage specialists.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

New Lending Rules Summary

2010-04-19T10:09:00.001-06:00

Three new lending guidelines were recently released by the Federal Government. The guidelines are to be enforced effective April 19, 2010. Below is a list of the new rules along with an explanation:

1) All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. – Currently, some lenders will allow you to qualify at the 3 and 4 year fixed rate terms when choosing a fixed rate mortgage term of less than 5 years. In addition, for variable rate mortgages some lenders will allow you to qualify at their best 3 year term fixed rate. The 3 year fixed rate is normally lower than a 5 year fixed rate. The lower qualifying rate allows you to qualify for a larger mortgage and thus a higher purchase price. Under the new rules, you will no longer be able to take advantage of the shorter terms and lower rates to qualify for a higher mortgage. For example, with an income of $50,000 per year, no other monthly debt and great credit, your current maximum purchase price would be approximately $400,000 with a 5% down payment. This maximum purchase price is based on the current 3 year qualifying rate with property taxes not to exceed $1,900/year and no condo fees. When the new rule takes effect, your maximum purchase price decreases to approximately $375,000 with 5% down payment. This maximum purchase price is based on the current 5 year qualifying rate with property taxes not to exceed $1,700/year and no condo fees. The $375,000 maximum purchase price is regardless of whether you choose a fixed, variable, or a term of 5 years or less.

2) The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home. – This change allows you to borrow less upon refinancing your existing property. This means if your property is valued at $300,000, the maximum you could borrow today is $285,000 (95%). However, after the rule change takes effect your maximum borrowing power drops to $270,000 (90%). This change only applies to existing owner occupied properties for refinance purposes.

3) Non-owner occupied properties will require a minimum down payment of 20%. – Currently, you have the ability to purchase an investment/rental (non-owner occupied) property with as little as 5% down payment. After the changes take effect, 20% down payment will be required. This means if you were to purchase an investment/rental property valued at $300,000, currently your minimum down payment is $15,000 (5%). When the new rule takes effect, your minimum required down payment to purchase the same property will increase to $60,000 (20%).

We hope that you now have a little more knowledge about the new mortgage guideline changes. If you have any further questions about the above changes please feel free to contact us anytime.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Housing Affordability Only to Get Worse

2010-04-07T09:44:00.000-06:00

With the recent mortgage rate increases purchasing a home has become less affordable. What this means is that a house you could purchase a couple of months ago is unaffordable today. In addition the affordability erosion is due to the recent appreciation of house prices. This newsletter covers how you still have an opportunity to take advantage of the historically low rates.

Looking further into the future, home prices are predicted to continue to keep rising at a moderate pace. In addition, as the economy recovers future salaries are also expected to increase. The main factor that is going to affect future affordability is mortgage interest rates. The expectation is that interest rates will increase another 0.50% by the end of 2010 and 2.5% higher in total over the next 2 to 3 years. Even with the recent increase in the mortgage rates, the rates are still considered being at historical lows. These historically low mortgage rates mean it is still a great time to purchase or refinance your home. The following example shows how you may not be able to afford your home if you wait any longer. Also it proves there is still opportunity to save on interest choosing to purchase or refinance a home in the near term rather than waiting until next year:

Example: $300,000 mortgage amortized over 35 years
Scenario 1: Current 5 year fixed closed interest rate 4.29%
Payment $1,374.08
Interest paid for entire term $61,690.85
Principle balance at end of term $279,246.05
Remaining amortization 30 years

Scenario 2: Predicted 5 year fixed closed interest rate at the end of 2010 of 4.79%
Payment $1,465.23
Interest paid for entire term $69,029.74
Principle balance at end of term $281,115.94
Remaining amortization 30 Years

From the example above you can see how the payments have increased by $91.15. This may not seem like much but it can actually lower the maximum mortgage you can qualify for substantially. This could mean that dream house you were hoping for may now be unaffordable if you wait until the end of the year to purchase. Not only could you afford more with the lower interest rates but there are two other great benefits as follows: 1) Interest savings of $7,338.89 over the 5 year term. 2) Lower principal balance that will save thousands in future interest.

So if you are looking to purchase a home or were thinking about refinancing, do not wait! You may no longer have the ability to afford your dream home or take advantage of the interest savings, if you do not act soon. Please contact us today to take your first step to purchase your new home.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Housing Affordability Only to Get Worse

2010-03-18T12:42:00.000-06:00

Recent publications show that purchasing a home has become less affordable. What this means is that a house you could purchase a couple of months ago is unaffordable today. This affordability erosion is due to the recent appreciation of house prices. The reports also show salaries increasing and interest rates decreasing slightly over the past couple of months. However, the higher wages and lower rates were not enough to offset the increased home prices.

Looking further into the future, home prices are predicted to continue to keep rising at a moderate pace. In addition, as the economy recovers future salaries are also expected to increase. The main factor that is going to affect future affordability is mortgage interest rates. It is widely expected that interest rates will be 1% higher by the end of 2010 and 3% higher in total over the next 2 to 3 years. This outlook for interest rates only has one outcome and that is for affordability to continue to go down.

So if you are looking to purchase a home, do not wait! You may no longer have the ability to afford your dream home if you do not act soon. Please contact us today to take your first step to purchase your new home.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

New Lending Rules and What They Mean to You

2010-03-01T16:36:00.000-07:00

Three new lending guidelines were recently released by the Federal Government. The guidelines are to be enforced effective April 19, 2010. Below is a list of the new rules along with an explanation:

1) All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. – Currently, some lenders will allow you to qualify at the 3 and 4 year fixed rate terms when choosing a fixed rate mortgage term of less than 5 years. In addition, for variable rate mortgages some lenders will allow you to qualify at their best 3 year term fixed rate. The 3 year fixed rate is normally lower than a 5 year fixed rate. The lower qualifying rate allows you to qualify for a larger mortgage and thus a higher purchase price. Under the new rules, you will no longer be able to take advantage of the shorter terms and lower rates to qualify for a higher mortgage. For example, with an income of $50,000 per year, no other monthly debt and great credit, your current maximum purchase price would be approximately $400,000 with a 5% down payment. This maximum purchase price is based on the current 3 year qualifying rate with property taxes not to exceed $1,900/year and no condo fees. When the new rule takes effect, your maximum purchase price decreases to approximately $375,000 with 5% down payment. This maximum purchase price is based on the current 5 year qualifying rate with property taxes not to exceed $1,700/year and no condo fees. The $375,000 maximum purchase price is regardless of whether you choose a fixed, variable, or a term of 5 years or less.

2) The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home. – This change allows you to borrow less upon refinancing your existing property. This means if your property is valued at $300,000, the maximum you could borrow today is $285,000 (95%). However, after the rule change takes effect your maximum borrowing power drops to $270,000 (90%). This change only applies to existing owner occupied properties for refinance purposes.

3) Non-owner occupied properties will require a minimum down payment of 20%. – Currently, you have the ability to purchase an investment/rental (non-owner occupied) property with as little as 5% down payment. After the changes take effect, 20% down payment will be required. This means if you were to purchase an investment/rental property valued at $300,000, currently your minimum down payment is $15,000 (5%). When the new rule takes effect, your minimum required down payment to purchase the same property will increase to $60,000 (20%).

You may have heard news in regards to increasing the minimum down payment for owner occupied purchases from 5% to 10%. In addition, there was discussion about lowering the maximum amortization period from 35 years to 30 years however, these guidelines were not affected with the changes. Thus, you can still purchase owner occupied properties with 5% down payment and amortize your mortgage for 35 years.

As mentioned, the deadline for the lenders to make the appropriate changes is April 19, 2010. However, we expect the lenders to adopt the new guidelines before the April 19, 2010 deadline. If you are requiring mortgage financing and you feel that the above rule changes will affect you, don’t wait, please contact us today to start your mortgage application immediately.

We hope that you now have a little more knowledge about the new mortgage guideline changes. If you have any further questions about the above changes please feel free to contact us anytime.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at http://www.yourmortgagecontact.com/ or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: http://www.yourmortgagecontact.com/

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Green Housing Can Save You Money

2010-02-22T11:53:00.000-07:00

When purchasing an energy efficient (green) home, in addition to saving on energy costs, you can also save on the mortgage insurance premium. Here are two ways to save on your mortgage with an energy efficient home:

1) 10% CMHC Mortgage Insurance Premium Refund for energy-efficient homes. You can apply for the refund after you take possession of the property directly through the mortgage insurer.
2) Amortization flexibility for energy-efficient homes without premium surcharges. This means you can increase your amortization to 35 years without paying the extra insurance premium surcharge for an extended amortization.

To qualify for these savings, your property must be built to certain standards. The guidelines are as follows:

1) Must be: R-2000 compliant, or
2) Certified under a CMHC eligible energy-efficient building program (i.e. Built GreenTM, Alberta and BC – gold label, NovoclimatMC, ENERGY STAR® and Power Smart™), or
3) Rate 77 or higher on an energy assessment performed by an NRCan licensed energy advisor.

Previously built homes or new construction homes that have the certificates and/or documentation as above can qualify you for the savings. Please call us for further details.

If you are looking to purchase a property, now is an excellent time with interest rates predicted to remain low for the near future, continued price appreciation during the coming years and further savings for going green. Contact us today to take your first step of mortgage financing to purchase you new property.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

How Fixed and Variable Rates Are Determined By The Lenders

2010-02-01T19:32:00.001-07:00

Interest rates are a very big topic on the minds of many, especially when it comes to a mortgage. However do you really know how interest rates are determined by the lenders? This newsletter will explain the factors examined when determining interest rates.

How are fixed rates determined?

One misconception about fixed mortgage rates is that they move up and down accordingly to the Bank of Canada’s overnight rate or the lenders prime rate. In reality the prime rate is not used to determine fixed mortgage rates at all. Lenders use the Canadian bond market yields to determine the fixed mortgage rates offered. Meaning, if the bond market yields start to increase the fixed mortgage rates will also increase and conversely decrease when the bond yields decrease. So to know where fixed rate mortgages are, heading you need to know what is happing in the bond market. Bond yields are determined on demand for bonds. The reason why current fixed mortgage rates are low is because bond demand is high and yields are also low. Bond yields are currently low because many investors are buying bonds creating a high demand which lowers the yield. Bond demand is higher when money transfers from the equity markets to the safer bond market which usually happens during more uncertain economic times or recessions. As the equity market demand picks up money starts shifting away from the bond market (lowering the demand), thus the yields start to increase which effectively increases fixed mortgage rates.

How are variable rates determined?

Variable rates are directly reflected by what the Bank of Canada’s overnight rate and lenders prime rate are set at. The Bank of Canada does not set the prime rate but the lenders usually adjust their prime rates when the Bank of Canada changes the overnight rate. This means today with the overnight rate and prime rate not being able to move down any further that variable rate mortgages have nowhere to go but increase in the future.

We hope that you now have a little more knowledge about how mortgage interest rates are determined. If you have any further questions about interest rates please feel free to contact us anytime.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Housing Recovery

2010-01-25T10:43:00.001-07:00

The Housing Recovery has seemed to take hold across all of Canada. It all started back in the summer of 2009 where the activity for new builds and existing house sales started to increase. This trend continued into the fall and winter. Usually in the last two months of the year home sales slow but even through the winter months of November and December this increasing sales trend continued. Housing sales in 2009 were better than 2008 due to the extraordinary 4th quarter. In addition the average price of detached bungalows rose to $315,055 (up six per cent), the price of a standard two-storey home rose to $353,026 (up 5.2 per cent), and the price of a standard condominium rose to $205,756 (up 6.4 per cent).

This strong recovery in the housing market was attributed to the low mortgage rates as well as some pent up buyer demand. It is expected that this home sales trend and price appreciation should continue while interest rates stay low. As interest rates start to increase the hot real estate market will level off to more normal historical levels during the second half of 2010.

So if you are looking to purchase a property, now is an excellent time with low interest rates for the near future and continued price appreciation during the coming years. Contact us today to take your first step of mortgage financing to purchase you new property.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Property Taxes 101

2010-01-04T13:13:00.000-07:00

The time has come for a new property tax year. In most areas property taxes are based from January to December but must usually be paid in full in June. There are three ways to pay your property taxes 1) Lump sum 2) Through a monthly municipality program (eg. TIPPS) and 3) Through the lender.

1) Lump Sum – You can pay your property taxes when due with one payment but most lenders do not allow this. It also can be very difficult to pay a large $2,000 tax bill fully when due. In addition if the full amount is not paid on time penalties will be charged in addition to your tax payment. It is more advisable to spread your tax payments throughout the year.
2) Monthly Municipality program – Most areas will allow you to pay your taxes on a monthly basis directly to the city or town. These programs are designed to help spread out the responsibility instead of one lump sum payment. In addition you can avoid any late payment penalties if you cannot come up with the full amount using the lump sum option.
3) Through the Lender – This option is similar to option 2 above. The lender collects the taxes along with your regular mortgage payments spreading the tax bill over the entire year. When the taxes are due the lender pays for your taxes in full with the payments collected from you over the year.

With options 2 and 3 payments may be adjusted higher or lower when your property tax payment amount is set by the municipality. Therefore if you pay your property taxes monthly with taxes due in June, the taxes are collected from July to June to pay the taxes fully in June. Please look at the following example.

Tax bill in June 2009 was $1,200.
Start making your monthly tax payments of $100 starting July 1st 2009.
In January of 2010 you receive your property tax assessment (Your property taxes owing be for 2010 due in June).
Based on your new tax assessment, your monthly payments can be adjusted higher or lower, also remembering you have already paid $700 ($100 per month) in taxes From July 1st to January 1st. If your new tax assessment comes in higher at $1,300 your payments get adjusted to $1,300 - $700 = $600 / 5 months remaining until tax bill due in June = $120 per month. If your new tax assessment comes in lower at $1,100 your payments get adjusted to $1,100 - $700 = $400 / 5 months remaining until tax bill due in June = $80 per month.

One misconception is that if you pay your taxes through the lender you pay higher property taxes. This is false as your property taxes are not set by the lender and no matter what option chosen your property taxes paid are always the same. We recommend using options 2 and 3 as they are the best ways to manage and pay for your property taxes.

When purchasing a new property, how property taxes are accounted for is different for your first tax bill. The easiest way to illustrate is with the following example:

Purchase a home with property tax bill for 2010 of $1,200 due in June 2010.
1) If you purchase the property between January and June, upon signing the papers at the lawyers you will receive a property tax credit. For example, if you purchased the property May 1st, the original owner has paid the property taxes from January to April ($400). Therefore when you sign the papers at the lawyers you will receive $400 credit to you from the sellers part of the property taxes. However, you will now be responsible for the full $1,200 property tax bill due in June. This means that if you pay through a monthly tax program you only have 2 months to pay the full $1,200 and the next two payments would be $600 each. Starting July 1st your monthly tax payment will go down to $100. Typically the lenders may let you spread the payments for the current taxes ($600/month) over a longer period of time to ease your payments however the effect is that your payments will not return to the $100 level on July 1st.
2) If you purchase the property between July and December, upon signing the papers at the lawyers you must pay extra for the property taxes. For example, if you purchased the property September 1st, the original owner has paid the full property taxes of $1,200 in June but only owes from January to August ($800). So when you sign the papers at the lawyers you will pay an extra $400 to the previous owner as they have paid the taxes to December. Now your monthly payment for your next years tax bill will be $1,200 / 10 months remaining until next property tax bill = $120. When your new assessment comes in January this monthly payment may be higher or lower.

You now have the basics of how your property taxes are collected and paid. If you have any further questions please feel free to contact us any time and we would be happy to assist you with your questions.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Wishing you, your family and friends a healthy and prosperous New Years in 2010.

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Is Blending and Extending Right For You?

2009-12-01T11:16:00.000-07:00

You may be looking at today’s mortgage interest rates and are asking yourself how you can take advantage of these rates. In our previous newsletter from February 2009 we talked about breaking out of your mortgage contract and getting a new mortgage at today’s lower rates. To view the February 2009 newsletter please visit our blog at http://yourmortgagecontact.blogspot.com/. Two obstacles can arise with this strategy: 1) You do not have the required equity in your home to allow this transaction. 2) The penalty is so high that there is no savings benefit over the long term.

There is another way you may be able to take advantage of the lower interest rates without requiring the equity in your home or paying a large penalty. The strategy is called blending and extending. With this strategy you are not entitled to the lowest mortgage rate available but your current lender will take your existing mortgage rate and blend it with a new 5 year term mortgage. The rate the lender can offer you will depend on the remaining term of your existing mortgage. This means that your blended rate will be better if the term left on your existing mortgage is shorter. In addition your term will be reset again to 5 years so you have extended your mortgage renewal. At the end of the process you will have a new 5 year term mortgage at a lower interest rate than your current interest rate. In our discussion, we talked about using the 5 year term to blend and extend but the lender may offer to use shorter or longer terms as each lenders policy is different. Also you will have to check with your lender to see if they will offer this strategy for you as some lenders may not allow this option.

If you are interested about this strategy and you call your existing lender to inquire about your new blended rate and term, also ask about the penalty to completely break out of your current mortgage. Please then contact us and we can assist and advise you as to whether the blended rate and extended term is better than breaking out of your current mortgage and paying the penalty to take full advantage of the low rates.

We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Wishing you, your family and friends all the best over the holiday season and have a wonderful New Years.

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

Saving For Your Downpayment

2009-11-02T16:46:00.001-07:00

Whether you are a first time home buyer or have bought multiple properties, saving for the downpayment can seem like an impossible task. It can be difficult saving $10,000 or more but not impossible. Here are a few solutions to help you save for that downpayment:

1) For first time homebuyers a great way to come up with the downpayment is taking advantage of the RRSP homebuyers plan. Even if you have owned a home in the past you may still be eligible if you have not owned a property for at least 5 years. This option allows you to withdraw up to $25,000 from your RRSP tax free and pay it back over the next 15 years. If you do not have adequate RRSP’s saved up, take advantage of an RRSP loan. This will help you with the savings you need while also providing you with the opportunity to improve your credit rating. To find out more about how to use your RRSP for a downpayment please click here or contact us today with your questions and/or your application.

2) This year the Canadian government introduced the Tax Free Savings Account (TFSA). The TFSA allows you to contribute up to $5,000 per year where any income or growth and principle can be withdrawn tax free. With time you can save for that downpayment quicker than you think while avoiding paying government taxes. Contact us today if you would like to know more about this option.

3) Downpayment funds provided by your immediate family members, meaning parents, grandparents or siblings. This downpayment can be in the form of a gift provided it is non-repayable. The person(s) gifting the funds would not have to be a co-borrower, co-signer or obligated any further with the mortgage in any way if you qualify on your own. They are just helping you out and providing you with a gift allowing you to purchase a home. If you are lucky enough to have this help from your family contact us today if you have any questions and to start your application today.

If the above means for saving for a downpayment are not suitable options for you, here are a couple of more solutions:

4) Providing you have an excellent credit score, borrowing the downpayment may be an option for you. If you already own a property, you can use any equity in that property up to 95% of the value towards the downpayment. If you do not have a property or adequate equity in the property, the downpayment can be borrowed by other means. For example using credit cards, line of credit or even a friend or family member loan that is set up as a real loan. A couple of factors to consider in regards to borrowed downpayment are: 1) Approval for a large unsecured loan may be quite difficult. 2) The loan payments must be considered when qualifying for the mortgage and thus can really impact the amount of the mortgage you can be approved for. 3) You will now be dealing with at least two payments, one payment for the downpayment loan and another for the mortgage. If borrowing the downpayment is an option for you then please contact us today to discuss.

5) A cash back mortgage solution is where the lender gives you the minimum 5% downpayment. This is a great option if you are motivated to buy immediately and have an excellent credit score but have been unable to save for the downpayment. Currently the best 5 year rate for this product is 5.84%. This rate may seem high at first however, you must remember that interest rates are at all time lows and if it takes you a year or two to save for the downpayment, the best interest rates at that time could be around this percentage level anyways. In addition the housing market has been strengthening lately where in most areas prices are starting to rise meaning you will have to save more downpayment for your future purchase. Looking at these two points makes the interest rate look very attractive and allows you to purchase immediately. Looking at these two points makes the interest rate look very attractive and allows you to purchase immediately. Keep in mind that if you break out of the mortgage term early for any reason the lender will take back the money given to you on a pro rated basis. If you feel this solution is the answer for you please contact us today to start your application and your homeownership dreams

We hope this helps you with any downpayment questions. If you feel that the above options do not solve your downpayment problems please contact us. We can look at your individual situation and work with you to help with homeownership no longer being just a dream but real.

In addition we are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

&

Kevin Saskiw, CFA
Mortgage Assistant

We Are On Twitter

2009-10-21T07:51:00.000-06:00

Did you miss out and not get a pre-approval in place before the increase in mortgage interest rates. Tired of waiting for an e-mail or a phone call about mortgage updates? Even worse are you even kept updated? No more waiting or being the last to know. Stay updated on the current products, news about mortgages and when rates may be changing. Follow us on twitter to be kept informed of any immediate changes that could affect your situation. Also you may check our website www.yourmortgagecontact.com for any updates as well.

Looking for a mortgage pre-approval, approval, refinance, renewal or have a question about mortgages? Contact us today for immediate service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or visit our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

and

Kevin Saskiw, CFA
Mortgage Assistant

Official Launch of Your Mortgage Contact Newly Designed Website

2009-10-15T10:10:00.000-06:00

We are pleased to announce the new design and look of www.yourmortgagecontact.com. Check it out to help you with all of your mortgage needs. Visit regularly to keep up to date on any changes in the mortgage industry. We also appreciate any feedback to make sure the website can be its very best.

We apologize that the newsletters have not been sent out the last few months. We are pleased to announce e-mails of our monthly newsletters will resume.

In addition we are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.

Any questions at all about mortgage financing refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or visit our updated website: www.yourmortgagecontact.com

Sincerely,

Betty Saskiw, AMP
Mortgage Associate

and

Kevin Saskiw, CFA
Mortgage Assistant

The Future For Interest Rates

2009-06-01T13:22:00.000-06:00

The first 5 months for 2009 have been an interesting time for the real estate and mortgage market. House prices have seemed to stabilize; fixed interest rates and the bank prime rate are at their lowest levels ever. So what does the remainder of 2009 have in store for the real estate and mortgage markets? Below are our predictions.

Per our last rate prediction newsletter in January 2009, we still believe that the western market (particularly Alberta) will continue to be fundamentally strong. With a stronger than average job market despite the current economic times, the real estate market should continue to show strength throughout the year. Also as predicted in January housing prices have started to stabilize. In addition, due to the lowest interest rate environment ever seen, more buyers are looking to enter the market particularity in the last two months.

Fixed rates: Fixed rates have recently stabilized with the best 5 year fixed rate for pre-approvals and 120 day rate holds currently at 3.79%. The lowest possible interest rate for a 5 year fixed closed mortgage is 3.74% but must close within 30 days. Since our last prediction at the beginning of the year rates have come down more than expected. We still feel that for the remainder of the year; rates will stay close to their current levels (within 0.25%) with a steady increase projected to start in mid 2010. Current fixed interest rates are at levels never seen before. The real estate market for the remainder of 2009 should continue to increase as more buyers take advantage of the unbelievable interest rate environment.

To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx

Variable rates: On April 22, 2009 the prime lending rate was lowered to 2.25%, which was a decrease of 0.25% from the previous level. The Bank of Canada rate of 0.25% is at its lowest rate ever. This means another decrease in the Bank of Canada rate is not possible. Therefore the banks prime rate will not go any lower than the 2.25%. The Bank of Canada did state that their plan is to keep the bank rate of 0.25% and prime rate at 2.25% for 1 year with no increases, unless there is a major change in the economy. Currently the best variable mortgage pricing is prime plus 0.40% (2.65%), however most lenders have adopted a pricing of prime plus 0.60% (2.85%). With the prime rate having nowhere to go but up, we still predict the prime rate to increase rapidly in mid 2010 to control inflation.

To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx

The remainder of 2009 should be an excellent year for you to get the mortgage you deserve. Whether you choose to go with a fixed or variable mortgage, 2009 is shaping up to be an optimal time to purchase a new, second, rental or vacation property, renew your existing mortgage or refinance your current property.

Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com and apply today.

Also please tell anyone you know that may be looking to purchase, refinance or early renew their mortgage as it may give you an opportunity to receive a $1,000 gift certificate of your choice. Click Here to find out further details.

Watch for our new and improved website in Summer of 2009.

Do You Have Life And Disability Insurance Coverage For Your Mortgage?

2009-05-04T19:17:00.000-06:00

Most people do not like to think of life and disability insurance, however insurance coverage is an important topic especially when it involves your mortgage. Whether you have had a mortgage in place for years or are in the midst of purchasing a new property, insurance coverage can be obtained anytime. There are basically four ways people cover their mortgages with life and disability insurance: 1) Through their employer benefits. 2) Individual term or whole insurance coverage plans set up through an insurance broker. 3) Mortgage insurance set up directly by the mortgage lenders. 4) Mortgage Protection Plan insurance coverage set up through Your Mortgage Contact Betty and Kevin. Each option has their advantages but some insurance plans may not be suitable in certain situations. We will go though each option individually:

1) Insurance coverage through your employer. This option is usually the cheapest but can be the most unstable. The instability is where you may find yourself with no life and disability coverage in the event you either lose your job or your benefits change with your employer. In today’s uncertain economic times, job stability and even changing benefits have become very common and can unexpectedly leave you in a position of losing your insurance. Also over time, employer insurance plans become more expensive as you age. Employer insurance plans are great because they are relatively inexpensive, however should not necessarily be the only insurance coverage you should rely on to cover your mortgage.

2) Individual term, whole and disability insurance plans set up by insurance brokers. The reasons these plans are great are because long term coverage is provided for a stated amount of time with no change in the coverage amount. One negative to this option is the potential high cost. Another downside is having to decide on the term as what term do you choose when covering your mortgage? With mortgage amortizations up to 35 years and with some mortgages expected to last even longer, what term do you choose? Say you choose a 25 year term because your mortgage amortization is 25 years. But what if your mortgage takes longer than 25 years to pay off due to refinancing? To renew your insurance can be very expensive now due to your age. One positive aspect about these policies is that the application is reviewed and verified before insurance is granted to you. This is an extremely important point in the event a claim is made to have it processed as smoothly as possible. Individual term, whole and disability insurance plans are a very good option to have your mortgage covered however there may be challenges deciding on the type and amount of coverage to match your mortgage requirements.

3) Mortgage insurance offered directly through the lenders. As you may be aware, most lenders have life and disability insurance coverage specifically designed for your mortgage at quite affordable rates. These insurance products are great for covering you for the entire term of your mortgage and can be easily adjusted with any changes to your amortization or mortgage amount. One issue is that when you sign up for lender insurance plans you have to be extremely careful when answering the medical questions. There have been instances when claims have been declined due to medical issues that were not disclosed or thought to have been minor. The claims get declined because verification of your application, especially the medical questions, is not done until a claim is filed. In addition, lender mortgage insurance is not portable meaning in the event you lender is changed, you must re-apply for insurance. Lender mortgage insurance coverage is good product given that it is specifically designed for your mortgage but dealing with complicated forms with little guidance can cause future problems when a claim has to be made.

4) Mortgage Protection Plan insurance coverage set up through Your Mortgage Contact Betty and Kevin. This insurance is offered by Manulife Financial, a name that is recognized all over the world and known for providing great insurance solutions at affordable prices. This plan combines options 2 and 3 to give you the best coverage possible. It is specifically designed for mortgages as in option 3 but with your application reviewed upfront by insurance professionals such as in option 2 so when claims are made they can be dealt with smoothly. Getting coverage is as simple as filling out a one page application. We at Your Mortgage Contact know we are not professionals when speaking about insurance however you can call an experienced insurance agent to help you with any question you may have about the product at anytime. Once the application is completed we will send in your request. Your application will be reviewed by an insurance professional that will follow up with you to go over your application in detail to make sure no errors have been made when answering the medical questions and any changes in the coverage and costs based on your individual situation. You also may be required to have a blood test in some instances. Some extra benefits to this plan also include the following: 1) 60 day money back guarantee. This means if you choose to cancel coverage in the first 60 days from your application date for any reason, any premiums already taken will be fully refunded. 2) When a claim is made any mortgage payments due will be covered and paid for while your claim is being processed. 3) Coverage starts immediately your application is submitted. 4) Your insurance stays in place even if you change lenders.

Life and disability insurance coverage for your home is extremely important. You do not want to leave your family burdened with a large unmanageable debt load. For this reason, please review your insurance coverage and ensure you are fully protected. Please contact us if you require assistance with your mortgage insurance needs. We can either refer you to an insurance broker or set up the mortgage insurance for you through a mortgage protection plan.

Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

Also please tell anyone you know that may be looking to purchase, refinance or early renew their mortgage as it may give you an opportunity to receive a $1,000 gift certificate of your choice. Click Here.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Summer of 2009.

7 and 10 Year Term Mortgages Looking Attractive During Uncertain Future

2009-04-01T16:39:00.000-06:00

The housing industry is showing signs of gaining momentum heading into spring. What does this mean for the future of interest rates? Currently mortgage interest rates are at all time lows however these rates will most likely start to increase in the near and long term future. In the future it is uncertain how high interest rates will go and for how long the interest rates will stay at these high levels. One way to combat this uncertainty is to choose a longer term mortgage. Most people choose the 5 year fixed term because of its low rate but the 7 and 10 year terms have decreased as well. If you choose the 5 year fixed term, upon renewing in 5 years time interest rates could be quite a bit higher than the rates are today. By choosing the longer terms of 7 or 10 years allows you to put off that renewal date an additional 2 to 5 years offsetting the uncertainty of your new mortgage rate and payment. With a 7 or 10 year mortgage you will still be faced with a renewal date. The extended term gives you the opportunity to pay down your mortgage balance further so even if mortgage rates are high at the time of renewal your mortgage principle balance will be lower. Currently the best 7 year fixed term offered is 5.00% with the 10 year fixed term as low as 5.25%. These are amazing rates for the length of the term. Choosing these terms would allow peace of mind that your mortgage payment will not change for 7 or 10 years. If you are currently in the stage of refinancing, renewing, remortgaging or purchasing and are considering taking a longer term mortgage please call us today.

There are a couple of myths when it comes to longer term mortgages:

1) I will not be able to move from my home if I choose a 7 or 10 year mortgage without facing a large penalty.
- This is incorrect. You have the ability to move anytime you wish without paying a penalty. Most lenders allow you to port or transfer your existing mortgage to your new property. Also if you need additional funds to purchase your new home a blended interest rate could be calculated depending on the extra funds required as well as current mortgage interest rates and terms available.

2) I cannot payout the mortgage faster if I choose a 7 or 10 year term.
- This is incorrect. You will have the same ability to make extra lump sum payments, double up payments and even increase your monthly payments as per the lenders guidelines. If your mortgage is paid out early using the lenders prepayment privileges (ie. if you have a 10 year fixed term and you end up paying the mortgage out in 9 years), then no penalties would apply.

If you currently have a mortgage, your mortgage is coming up for renewal, or you are currently looking to purchase a property and are concerned about future interest rates. Please call us today and inquire about the 7 and 10 year term mortgages available to help ease your concerns. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

Also please tell anyone you know that may be looking to purchase, refinance or early renew their mortgage as it may give you an opportunity to receive a $1,000 gift certificate of your choice. Click Here.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.

Recent Budget Changes and Greater Affordability That Help With Home Ownership

2009-03-02T08:59:00.000-07:00

If you are in the market to purchase a home, second home, vacation property, rental or investment property in 2009 it looks to be a great year. Affordability for housing is at an all time high due to extremely low interest rates and house prices. Real estate values have been falling for the last 9 months and look to stabilize throughout the year. In addition the recent budget changes help first time homebuyers with tax incentive programs and downpayment saving programs. New and existing homeowners can also benefit from tax savings with the introduction of a renovation tax incentive program.

As mentioned above it is a fantastic year for first time homebuyers to purchase a property. Homebuyers currently need a minimum 5% downpayment to purchase a home and saving for this downpayment has been made easier. The recent budget now allows a first time homebuyer to withdraw up to $25,000 from their RRSP under the first time homebuyers plan. This was increased from the previous maximum limit of $20,000. Also available to help any homebuyer with saving for the downpayment is a Tax Free Savings Account (TFSA). As of January 1, 2009 you can deposit your savings into a TFSA where any interest or dividend income and capital gains can be earned tax free. You can deposit up to maximum of $5,000 per year to your TFSA account and withdraw the funds anytime with no tax payments required. To find out more about these accounts please visit the following website: http://www.fin.gc.ca/ or contact your financial institution.

Whether you are a first time home buyer or buying your 10th property and have not had the ability to save for the downpayment, the following are two options available to you if you have excellent credit:

Option 1) Borrowing the downpayment through your own means. In this scenario you would borrow the 5% downpayment from a financial institution and then be eligible for the best mortgage interest rates. If you are having difficulties getting an unsecured loan from a bank or find dealing with two separate loans and payments to be confusing, option 2 is available for you.

Option 2) Cash Back Mortgage programs offered through the lenders where along with the mortgage, the downpayment is lent to you with one easy application process. You only have to deal with one payment. The current best 5 year fixed rate with 5% cash back is 5.79%.
Another incentive provided to first time homebuyers is the first time homebuyer’s tax credit. This program gives a tax credit of 15% on eligible closing cost expenses such as legal fees, land transfer taxes, appraisals fees, home inspection fees, moving expenses, etc. You can claim a maximum $5,000 of qualified expenses to receive the full $750 tax credit. For further information please visit the following website: http://www.fin.gc.ca/ or contact an accountant or tax professional.

The budget has also included for 2009 a home renovation tax credit to benefit all homeowners. This program gives the homeowner a 15% tax credit for any qualified renovation expenses in excess of $1,000 to a maximum of $10,000. You have until February 1, 2010 to make your qualified expenses for a maximum tax credit of $1,350. Qualified expenses include renovating a kitchen, bathroom or basement, new flooring such as hardwood carpet or tile, building a new addition, deck, fence or retaining wall, new furnace or water heater, Painting the interior or exterior of your house, resurfacing a driveway, laying new sod, etc. Expenses that do not qualify are the purchase of furniture or appliances, purchase of any tools, carpet cleaning, any maintence projects such as furnace cleaning, lawn care, snow removal, etc. Also to note only personal use properties can qualify such as your primary residence or vacation property. Therefore renovations done to rental or investment properties do not qualify for this tax incentive. To illustrate an example on how this works: you have made qualified renovation expenses of $7,000. That means you get a tax credit of $7,000 - $1,000 = $6,000 X 15% = $900. For further information please visit the following website: http://www.fin.gc.ca/ or contact an accountant or tax professional. If you do not have the means to pay for the renovations yourself you can always take advantage of today’s low interest rates and use any excess equity value up to 95% and refinance your property to complete your renovation projects. Also if you are purchasing a new home that may need some renovations the purchase plus improvements program can help you finance the renovations. Please feel free to contact us anytime to inquire about your options.

With housing that has become more affordable and the above savings, tax and loan incentives purchasing or renovating a home has become easier and cheaper than the recent past. If you have any questions or would like to apply today please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

Also please tell anyone you know that maybe looking to purchase, refinancing or early renewing their mortgage as it may give you an opportunity at a chance to receive a $1,000 gift certificate of your choice. Click Here.

Watch for our new and improved website in Spring of 2009.

Converting Your High Interest Mortgage to the Current Low Interest Rates Equals Unbelievable Savings.

2009-02-02T20:29:00.000-07:00

Did you get a mortgage within the last 4 years? If so please read carefully as you may be able to take advantage of unbelievable savings on your interest costs.

We are currently at a stage where the last time interest rates were this low was in 2004. Considering the inevitable rising of interest rates and an uncertain economic future, remortgaging is something you should definitely consider. It may be in your best interest to pay the penalty to break free from your existing high interest mortgage and consider refinancing or early renewing your mortgage at these unbelievably low interest rates. Take a look at the following example to see how these savings add up:

Example:

Original Mortgage Amount: $300,000.00
Current Interest Rate: 5.50%
Current Monthly Payments: $1,598.89
Term Remaining on Current Mortgage: 3 years
Amortization Remaining on Current Mortgage: 32 years
Approximate Penalty Payable to Break Free of Current Mortgage: $3,992.58
Approximate Interest Payable Remaining on Current Mortgage: $47,135.29

Current Mortgage Balance Including Penalty: $297,937.74
New Interest Rate: 4.39%
New Monthly Payments: $1,438.57
New Term: 5 years
Amortization: 32 years
Approximate Interest Payable over next 3 years: $38,009.25

Total Approximate Savings over next 3 years: $9,126.04
Total Approximate Savings over next 3 years after penalty: $5,133.46

As you can see in the above example you can save approximately $5,133.46 over the next 3 years even after taking into account the cost for the penalty. In today`s economy this money can go a long way. Apart from the savings two additional benefits are: 1) Per the above example, there is a decrease of your monthly payments by $160.32 per month. The difference in monthly payments can be spent any way you prefer. One tip is if you keep your monthly payments the same your savings would be even greater. 2) In the example above you would gain an extra 2 years at the new low rate of 4.39%. It is nearly impossible to predict what interest rates will be exactly in the long term. However we do expect interest rates to increase with no warning as early as September of 2009. These extra years at the low interest rate are priceless.

Fees that may be associated with this transaction are: 1) Appraisal costs which are approximately $350 (In most cases we will pick up this cost for you) 2) Legal costs approximately $450 (This cost is waived in most cases if your approved mortgage is less than 80% of your property value) 3) Mortgage insurance premium top up approximately $200 to $500 (In most cases there is no insurance premium fee if your approved mortgage is less than 80% of your property value). Considering your interest savings, the potential fees outlined are minimal.

Before you call us to inquire about your savings, first you need to see if you have the required equity in your property to take advantage of the current low interest rates. Most of you should have received your 2009 property assessment by now. Please follow these simple 2 steps to see if you are eligible to participate.

Step 1) Take your 2009 assessed value or the value you feel your property is worth and multiply it by 95%. (Example: 2009 Assesses value of $300,000 X 0.95 = $285,000) This provides you the maximum mortgage amount you can apply for.
Step 2) Take your current mortgage balance today and add 3 months payments. (Example: Monthly payments of $1,400, $1,400 X 3 = $4,200, Current Mortgage Balance $250,000, $250,000 + $4,200 = $254,200) This provides you with the amount of mortgage you would require including the approximate penalty to break out of your existing mortgage.

Results: If the number you calculated in step 1 is greater (larger) than the number you calculated in step 2 then please call us to inquire what your savings could be. If the number you calculated in step 1 is less than (smaller) than the number you calculated in step 2, then unfortunately you do not have enough equity in your property to participate. In this case you could only participate if your property value increases or if you are willing to pay the mortgage and penalty from your own resources so it is equal to or is less than the number you calculated in step 1. If your number in step 2 is only a small amount over ($5,000) than what you calculated in step 1 please call us as we still may be able to help out.

Don`t miss out! Please contact us today so we can do a detailed analysis on your individual situation. Contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com.

Also please tell anyone you know that may benefit from refinancing or early renewing their mortgage as it may give you an opportunity at a chance to receive a $1,000 gift certificate of your choice. Click Here to find out further details.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.

Where Are Interest Rates Going?

2009-01-05T17:29:00.000-07:00

2008 has been an interesting year for the real estate and mortgage markets. House prices have come down from their 2007 highs, fixed interest rates are the lowest since 2004, and the bank prime rate is at 3.50% its lowest level in 50 years. So what does 2009 have in store for the real estate and mortgage markets? Below are our predictions.

We feel that the western market particularly Alberta will continue to be fundamentally strong. With a stronger than average job market despite the current economic times, the real estate market should show some strength throughout the year. We also feel housing prices will start to stabilize. In addition, due to a low interest rate environment not seen since 2004 (the beginning of the boom), we should see more buyers looking to enter the market again.

Fixed rates: Fixed rates have recently been lowered by all the lending institutions and the best 5 year fixed rate is currently 4.89%. Due to the current economic state, we believe that there is potential for fixed rates to decrease 0.10% to 0.25% in the first half of 2009. For the remainder of the year, rates should stay unchanged with an increase projected in mid 2010. Current fixed interest rates are returning to levels not seen since the pre 2004 housing boom. Thus the real estate market going forward will be stronger than the market seen in 2008.

To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx

Variable rates: On December 10, 2008 the prime lending rate was lowered to 3.50%, which was a decrease of 0.50% from previous levels. The next rate announcement by the Bank of Canada is scheduled for January 20, 2009 and it is widely expected that once again the prime lending rate will be decreased by 0.25% to 0.50%. We also expect the prime rate to be lowered potentially another 0.25% to 0.50% throughout the year. Please note the lenders may not pass any Bank of Canada rate cuts to the consumer prime lending rate. For example, the last rate announcement only 0.50% of the 0.75% rate cut was passed onto the consumer banks prime lending rate. Currently the best variable mortgage pricing is prime plus 0.60% (4.10%), however most lenders have adopted a pricing of prime plus 1.00% (4.50%). We also predict the prime rate to increase rapidly in 2010 to control inflation.

To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx

2009 should be an excellent year for you to get the mortgage you deserve. Whether you choose to go with a fixed or variable mortgage, 2009 is shaping up to be an optimal time to purchase a new, second, rental or vacation property, renew your existing mortgage or refinance your current property.

Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: http://www.yourmortgagecontact.com/ and apply today.

Click Here to find out how you can receive a $1000 gift certificate.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.

WISHING YOU ALL A PROSPOROUS 2009

Money Management Tips To Save $$$$$

2008-12-03T10:42:00.001-07:00

We are heading into the Christmas season with an economy that has seen better days. Below are some money management tips to help you through this holiday season, the current economic situation, and the future ahead.

1) After the holidays are over everyone usually dreads receiving credit card bills in the mail. With most credit card interest rates in the 20% to 24% range it is very difficult to pay these cards off. Due to the higher interest rate, if the credit card bill is not being paid in full on a monthly basis, the interest charged will cost a lot of money. One option available to you is to consolidate your debts into one loan at a much lower interest rate. This can be done in two ways: 1) Approach your bank and ask them to consolidate at a lower interest rate. The interest rate to consolidate is normally in the range of 7% to 8%. 2) If you have sufficient equity in your home you can use the equity to pay off your debt at a lower rate of interest by refinancing your home. Please check out our current lowest rates. The second way is the greatest savings provided you have the equity in your home. Please contact us today if you would like to refinance your home to consolidate your debt.

2) If you are fortunate enough to have very little to no credit card debt and have the luxury of a little extra money at the end of the month, where do you invest this surplus? During good economic times the stock markets were not as volatile and GIC and savings account rates were much higher. This encouraged you to invest your surplus savings. Today’s environment consists of uncertain economic times, extremely volatile stock markets, and historically low GIC and savings account rates. Thus putting these extra savings towards the mortgage may be the more prudent investment. Your current mortgage rate is probably somewhere in the range of 4% to 6%. Applying your money towards your mortgage would be the equivalent of receiving 4% to 6% guaranteed return on your investment. Please examine the following example to illustrate your savings.

Example: $300,000 mortgage amortized over 35 years with a 5 year fixed term of 5.80%
Scenario 1: Make your current monthly payments
Payment $1,656.75
Interest paid for entire term $83,886.83
Principle Balance at end of term $284,481.33
Remaining Amortization 30 years

Scenario 2: Make your current monthly payments along with an extra $100 per month
Payment $1,656.75
Extra Payment $100
Interest paid for entire term $82,957.31
Principle Balance at end of term $277,552.31
Remaining Amortization 28 Years 2 Months

As illustrated by the above example, an extra $100 a month payment over the 5 year period equates an interest savings of $929.52. The Interest savings may not seem significant, however your principle balance has dropped to $277,552.31 and your amortization has dropped to 28 years 2 months. The rule of thumb is that the faster you pay off your debt the more you will save on interest. Based on the example, this adds up to a projected savings of $30,606.89 over the next 28 years 2 months assuming your interest rate stays the same for the life of the mortgage. Now that is big savings.

The next example shows the same mortgage but switching from monthly payments to accelerated bi-weekly payments.

Example: $300,000 mortgage amortized over 35 years with a 5 year fixed term of 5.80%

Scenario 1: Make your current monthly payments
Payment $1,656.75
Interest paid for entire term $83,886.83
Principle Balance at end of term $284,481.33
Remaining Amortization 30 years

Scenario 2: Switch to Accelerated Bi-Weekly Payments
Payment $828.37
Interest paid for entire term $82,444.10
Principle Balance at end of term $274,756.00
Remaining Amortization 23 Years

As illustrated by this example, switching to an accelerated bi-weekly payment equates an interest savings over the next 5 years of $1,442.73. Again the interest savings may not seem significant, however your principle balance has dropped to $274,756.00 and your amortization has dropped to 23 years. As mentioned above the faster the debt is paid off the more you will save on interest. So, based on this example your savings add up to a projected $94,664.83 over the next 23 years assuming your interest rate stays the same for the life of the mortgage. Now that is even bigger savings.

Based on the above examples applying extra payments towards your mortgage will result in big savings. So if your credit card debt is under control and you have the ability to make some extra mortgage payments, please call your mortgage lender today to take advantage of the savings.

Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.

Please contact us for any of your mortgage needs. Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

Wishing you, your family and friends all the best over the holiday season and have a wonderful New Years.

Tips To Improve Your Credit Score

2008-11-05T11:32:00.000-07:00

In today’s economic times of tightening lending markets, your credit history is increasingly more important when applying for a mortgage or loan. When a bank does your credit check, they do not provide a detailed analysis of your credit bureau and in most cases cannot even provide you with a copy. At Prolink Mortgages we will take the time and go through the credit bureau with you to ensure you understand the report as well as provide you with a copy of the report upon request. Also recent changes in the mortgage industry make it almost impossible to get mortgage financing with credit scores under 600 unless you are willing to pay a very high rate of interest. In some cases you even need a score above 650 to be considered for various mortgage programs such as rental or investment properties. By following these 8 simple rules, you will be ensured of the good credit score, mortgage and interest rate that you deserve.

1. Pay your bills on time. Your payment history is a major factor (35% of your score) in determining your credit score. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.

2. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.

3. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score. To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit. Don't use the extra credit though! That defeats the whole purpose and puts you further in debt! A general rule of thumb is to try and keep the credit card balance below 50% of the credit card limit.

4. Don't apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.

5. Don't ever close an open credit card account. If you pay off a credit card down to a zero balance, leave it open. Remember that a positive factor for your credit score is how much available credit you have at your disposal when compared to your credit balance, in addition to the length of your credit history.

6. Apply for loans within a two-week period. Every time you request a loan and the lender pulls your credit report, it can hurt your score. It is part of the formula that reasons "this person is trying to apply for credit and loans and possibly be trying to live way beyond their means!" If you keep the loan process within a two-week period, all of the credit report lookups are bundled together as one single request!

7. Check for errors on your credit report. Examine your credit report for errors and contact the credit reporting agencies to fix any errors on your credit report.

8. For the credit card debt that you have outstanding, try and pay more than the minimum payments required. By paying more than the minimum payments, your credit score will increase because it shows that you are making an effort to pay down the credit card debt.

If you take action and follow these tips, you will be able to give your credit score an immediate boost and gradually increase the score even more as time passes. The major keys are to pay your bills on time and reduce your debt amounts when compared to your credit limit. This has a twofold benefit of improving your credit score and reducing your debt.

Don’t panic if you do a credit check and your credit score comes in lower than you expected. We will work with you and help to get your score increased. If you take our advice and suggestions, usually in as little as 60 days we can help you to increase your credit score to make your home ownership dreams a reality. Even if it takes longer than 60 days for your score to improve, we will continue to work with you over the long term to help in any way we can to get your credit on track.

Please contact us for your mortgage needs or for help with getting your credit on track to reach your future home ownership dreams. Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

DON’T PANIC You Can Still Purchase A Home With No Down Payment

2008-10-03T17:17:00.000-06:00

As you all probably know, as of October 15th 2008 lending institutions will no longer be offering zero downpayment mortgage programs. No worries, you will still have the ability to purchase a home with no downpayment. Here are two available options: 1) Borrow the 5% downpayment on your own through a bank or someone else or 2) A cash back mortgage where the lender loans you the 5% downpayment and the downpayment is included in your mortgage payment. Both of these options still allow you to get a mortgage where 100% of the purchase price is from borrowed funds. Please check our current rates for the up to date mortgage and cash back mortgage rates.

Let’s go through an example with each option assuming a purchase price of $400,000 and amortizing the mortgage over 35 years.

Option 1) Borrowing the money through your own means. In this scenario assuming you could borrow the 5% downpayment ($20,000) through a bank at Prime + 3.00% (7.75%) with minimum payments of interest only, the monthly payment would be approximately $129.17. The total mortgage portion including mortgage insurance premium would be $392,540.00 assuming a 5 year fixed interest rate of 5.45%. Monthly payments would be $2,079.57. In summary the total loans outstanding would be $412,540.00 with combined monthly payments of $2,208.74. You may find it difficult to get an unsecured loan from a bank. Or having to deal with two separate loans and payments can be very confusing so in this case option 2 is available for you.

Option 2) Cash Back Mortgage programs offered through the lenders where along with the mortgage, the downpayment is lent to you with one easy application process. The full $400,000.00 is lent to you at a slightly higher 5 year fixed rate currently at 7.20%. In this scenario total mortgage including the mortgage insurance premium is $412,540.00 and total monthly payments are $2,662.87.

As you can see in the two examples above your payments are slightly lower in option 1. This is because you are only paying interest on the downpayment loan and nothing to the principle portion where in option 2, more money will be going towards your principle. Also finding financing yourself for the downpayment can be very difficult to obtain and each situation is unique so please feel free to contact us to see which option is best for your individual situation.

For both options you must have a strong credit score (650 or above). In addition you must have 1.5% closing costs from your own resources that cannot be borrowed. Closing costs are fees associated with lawyer’s fees, moving costs, property tax adjustments, etc. In the example above using the $400,000 purchase price, the closing costs would be $6,000.

One would think that with the higher interest rate and borrowed downpayment you would qualify for much less than the old zero down mortgage program, but this is not the case. For example, if you were to qualify for a $300,000 mortgage using the zero down mortgage program, the cash back or borrowed downpayment programs would qualify you for approximately $290,000. That’s only $10,000 less. The reason for this is the lower insurance premium as well as the ability to qualify at 35% GDS and 42% TDS, which is higher than the 40% TDS required for the zero down payment program.

The cash back mortgages are also accessible to a greater number of applicants as the credit score required is lower than for the zero down program. For example, you need a 680 or greater credit score with the old zero down program. The cash back or borrowed downpayment programs allow you to purchase with a minimum credit score of 650. This means more opportunity for you to purchase your dream home faster.

So if you don’t have the downpayment saved up no problem we can help you get into that dream home faster than you think. If you have any questions or would like to apply today please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: www.yourmortgagecontact.com

September Newsletter - Dream About A Vaction Property Or Second Home

2008-09-02T10:59:00.000-06:00

Have you ever thought of heading out to your ski condo on your favourite mountain, cottage by the lake, house where there is some of the best golfing in the world, or just somewhere you can escape to other than your home in the city? Do you have a child that is going to school away from home? How would you like to own that property and visit any time you want? Then what you are looking for is a vacation property or second home.

Now is a great time to think about a vacation or second home as you may still purchase a property with zero downpayment. Even after October 15th 2008 when a minimum 5% downpayment is required it is still considered a great time to buy for a couple of reasons. With the recent price decreases seen in the housing market and the large inventory of properties to choose from, this provides an opportunity for you to take your time and look for that dream property you are searching for.

The second home purchase program was introduced for the purpose of an individual wishing to purchase a second home in order to cut down on their commuting time or to obtain a vacation property. Also considered under the second home purchase program is the case where a mortgagor’s relative is living in the second property on a rent-free basis. As well, this program is ideal for a person wishing to provide a house for a child away at university.

Qualifying for a vacation or second home mortgage is very similar to the process of qualifying for your primary residence with the exception of a few criteria. These exceptions are as follows:
· The property must be intended for occupancy at some point during the year by the borrower; or a relative of the borrower on a rent free basis.
· The property can be located anywhere in Canada and must be suitable and available for all season access. Thus a back country cabin only accessible by foot would not be eligible for this program. Some exceptions apply.
· Properties that are constructed for seasonal use or have seasonal access only are not eligible. This means that if you have a cabin on the lake which you can only access by boat in the summertime, this cabin would be ineligible for this program. Some exceptions apply.
· The property must have a permanent foundation below the frost line; be zoned residential, rural or seasonal; include a kitchen, 3-piece bathroom, bedroom, and common area; have year-round road access; be winterized with a permanent heat source; and have a water source and septic system or sanitary sewer.
· Properties located on an island must have a year round bridge or ferry access.
· Time share interests, life leases and properties in rental pools are not eligible.
· Properties that are not winterized or have seasonal access will be considered for purchases with a minimum downpayment of 10%. In this case, the maximum loan amount will normally be $350,000.00.
· US residents may also purchase a second home or vacation property in Canada with a minimum downpayment of 35%. The applicants must be able to provide the downpayment from their own resources along with a solid credit history based on their US credit bureau.
· The applicant can only have 2 owner occupied properties under the second home program since the second home program allows you to purchase the second home with 0% downpayment. Any additional properties you wish to purchase must qualify as an investment or rental property where a minimum downpayment of 10% is required.
If you are unsure if the properties you are looking at are eligible for this program or not please feel free to contact us anytime to confirm.

In the event you may not have the ability to use the property at all times, cannot qualify for the property purchase on your own, or just feel that the payment is too high for you to afford, here are a couple of options available to you to make this dream a reality:

1. To help with the purchase of the property you may want to get a group together (maximum of 4 applicants) to make qualifying and affordability of the property easier. Also having more people involved in the property gets greater usage out of the investment
2. Another opportunity available to you is the chance of making a little income on the property. As above it states that the property must be intended for occupancy at some point during the year by the borrower; or a relative of the borrower on a rent free basis. This means that during the times that you will not be using the property you can rent it out. For example you may not be able to get out to the cottage every weekend of the year but for some weekends you may wish to rent it out. Unfortunately this income cannot be used to help qualify for the mortgage.

Remember a second home purchase can also be considered a very solid long term investment. With exception to the previous four years, the long term history of the housing market has shown that property values have increased on average 5% to 8% per year.

So what are you waiting for? Let’s make your dream a reality. If you, someone you know of or a group are interested in purchasing a vacation or second home please inquire with Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: http://www.yourmortgagecontact.com/ and apply today.