5 Oct

First-time Home Buyer Incentive

Mortgage Tips

Posted by: Kim Seifert

First-time Home Buyer Incentive

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

What does the First-Time Home Buyer Incentive offer? The incentive is a shared-equity mortgage with the Government of Canada.

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home
  • 5% for a first-time buyer’s purchase of a resale (existing) home
  • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The Incentive’s shared-equity mortgage is one where the government has a shared investment in the home. As a result, the government shares in both the upside and downside of the property value.

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the property’s fair market value at the time of repayment. If a homebuyer received a 5% Incentive, they would repay 5% of the home’s value at repayment. If a homebuyer received a 10% Incentive, they would repay 10% of the home’s value at repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.

LEARN MORE ABOUT THE FIRST-TIME HOME BUYER INCENTIVE

Looking for homebuying tools and resources?

Knowing what to expect throughout the entire homebuying process can lead to more well-informed decisions, and a better homebuying experience overall.

Check out all the homebuying tools and resources below to help you make your homebuying decisions with confidence.

 Guides

First-time Homebuyer Mortgage Process

Calculators

Other useful information

  • Your Credit Report – Learn more about the simple steps you can take to maintain a good credit history and improve your chances of being approved for a mortgage.
  • Mortgage Planning Tips – See how planning your mortgage in advance can help you save money in the long run.
  • Mortgage Fraud – Read these valuable insights that can help protect you from mortgage fraud.

Ready to Apply for a Mortgage? Apply Now

Mortgage Broker Regina

 

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

19 Sep

Lawyers in Regina

Mortgage Tips

Posted by: Kim Seifert

5 Tips on How to Select a Regina Real Estate Lawyer

Lawyers in Regina — Real estate and property law comprises the financing aspects of property: Such as mortgages, liens, and foreclosures.

If you have purchased or are thinking about purchasing property, whether you are considering a house, a commercial building or a piece of land, you may want to consult with a real estate lawyer in order to protect yourself from any unforeseen liabilities that might be attached to the property.

Real estate contracts tend to be full of legal jargon that can be difficult for the average person to understand. However, if you have selected the right attorney with years of experience to assist you with the real estate transaction, he or she can help relieve you from the stress of the deal by ensuring that all of your documents are in order and ready.

Selecting the right attorney will go a long way to ensuring that your house buying or selling process is a smooth one.

Lawyer in Regina

1. Choose a Real Estate lawyer

Not all lawyers in Regina practice Real Estate law!

It seems obvious, but some clients make the mistake of addressing any lawyer. For example, some might choose a family friend who helped with their divorce. Not every lawyer can help you in Real Estate.

Real Estate Legislation is complex and constantly changing and lawyers should be up-to-date on all changes. So, whether you are purchasing a new home, refinancing a mortgage, or listing your home for sale it is important that the lawyer you select is actively practicing Real Estate law.

2. Get Referrals from Mortgage Brokers & Realtors

Mortgage Brokers and Realtors have first hand experience working with Real Estate Lawyers and have an intimate understanding of how they treat their clients, legal service fees, and how quickly and efficiently they work.

The lawyers Legal Assistant plays an extremely important part in the Real Estate transaction often doing all the upfront work. Working with each lenders funding department, ISC (Land Titles), Mortgage Brokers, and Realtors. A Legal Assistant that is experienced in Real Estate transactions is as important as working with an experienced lawyer.

3. Contact the Saskatchewan Bar Association

The Saskatchewan Bar Association will be able to provide you with a list of attorneys in the Regina area that specializes in Real Estate law. Using the Saskatchewan Bar Association as a resource has the added benefit of ensuring that the attorney you choose is properly licensed to practice law in Regina. You typically can either call the bar association or visit their website to find a list of Real Estate lawyers in Regina

4. Examine Regina Lawyers/ Real Estate reviews

Many resources exist online that allow clients to provide reviews of attorneys whom they have hired to represent them in different types of legal matters. By reviewing other individuals’ experiences with a particular attorney, you can judge whether an attorney might be the right fit for you.

5. When do you need to provide the lawyers name and contact information

Lenders will request your lawyers contact information when submitting the signed mortgage commitment with the Mortgage Broker. Required for lender solicitor instructions.

How to select a local Regina Realtor — here

How to select a local Regina Mortgage Broker — here

Mortgage Broker Regina

 

Kim Seifert
M
ortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

19 Sep

Realtor in Regina

Mortgage Tips

Posted by: Kim Seifert

6 Tips on How to Find a Realtor in Regina

Whether you’re buying or selling a house, understanding how to find a the Best Realtor in Regina is essential and probably personal as well. Your agent will help you through all steps of the process and answer the countless technical, tactical, and financial questions that arise.

So you don’t waste hours Googling for answers that a good real estate agent will have a clear handle on the ins and outs of the local housing market. Below are some of the best resources to turn to find someone you know you can trust.

Realtor.ca

1. Find a Realtor in Regina with the most listings

One simple, somewhat passive way to find the Best Regina Realtor is to identify which agents have the most listings in Regina and surrounding areas. Experience with many clients indicates a certain amount of ambition and hustle. You can review current MLS listings for Regina at Realtor.ca

Just because a Realtor has the most Real Estate listings in the area doesn’t mean they are the best Realtor for you!

2. Get referrals from family, friends, other Regina Real Estate Professionals

Probably the most common strategy for finding a Real Estate agent in Regina is through word of mouth. Ask your family, friends, neighbours or other Real Estate professionals (ie. mortgage brokers, lawyers) who they recommend or have used before. Make sure to ask “would you use them again?”

The home buying process is an emotional time for many. Be careful using close friends and/or family as this could lead to conflict in the home buying process.

  • Finding the “right” Realtor is personal and subjective.
  • May work if the person’s sale or purchase was similar to yours.
  • Don’t assume one size fits all, even if their experience lines up with yours.
  • Compare the referral with 1-2 other realtors.
  • Be careful hiring agents you know personally, set ground rules.
  • Mortgage Brokers, Lawyers have first hand experience working with Realtors and have an intimate understanding of how they treat their clients and how they work with other professionals.

3. Get a referral from your previous Realtor

If you’re moving to Regina, you could reach out to your previous Realtor for a referral. Most brokerages have a network of Real Estate agents they use across the Canada, and they can refer you to someone who would likely be a good fit. Understand, Realtors usually get a referral fee for recommending a local Realtor.

4. Look for community leadership

Here’s an outside-the-box approach: Look beyond the performance numbers and find agents who have actually invested in the Regina area. Work with someone who believes in the community and does more than sell homes. Someone who participates in local schools, sports, developing businesses, or charities.

5. Evaluate what ‘good/ best’ means to you

Your idea of a good/ best real estate agent is probably different from someone else’s, so it’s important to make a list of qualities you most desire in the person you hire to sell or find you a home.

Does “good or best” mean they’re the most ethical, have the highest sale volume, or have the greatest experience? Do you want an agent who takes charge, or one who focuses more on making you feel heard? Is customer service the highest priority? Avoid superficial “best local contests” as well. They are just made up competitions to get more traffic to media providers.

6. Make sure the Regina Realtor’s license is up-to-date

Before you sign with an Realtor check if there Realtor’s license is up-to-date. To check that the license is current, go to the Canadian Real Estate Association CREA or Saskatchewan Realtors Association SRA websites. You will also be able to see if the agent has faced any disciplinary action.

In conclusion

Avoid using platforms like Zillow and Google to find Realtors as the huge number of search results can make it inefficient and overwhelming. It is also hard to tell the top agents from agents who paid for more visibility. These tools are better for vetting agents than finding them.

So, finding the Best Real Estate Agent in Regina is a personal decision and shouldn’t be taken lightly. Feel free to reach out to me and I can provide a list of local Regina Realtors that I have personally worked with and know first hand how they treat their clients and how they work with other Real Estate Professionals. If you are looking for other advice please checkout my Blog section.

How to select a Lawyers in Regina— here

How to select a local Regina Mortgage Broker — here

Mortgage Broker Regina

 

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

16 Sep

Mortgage While on Maternity Leave

Mortgage Tips

Posted by: Kim Seifert

Can you get a mortgage while on maternity leave in Canada?

Simple answer is Yes you can qualify for a maternity leave mortgage. In general, you will qualify if you provide a letter of employment from your employer. It must confirm your current Rate of Pay, Guaranteed Hours, and finally your Expected Return Date. NOTE: Not every mortgage lender has the same rules regarding Parental Leave.

What are the mortgage rules for maternity leave?

  • Credit score over 640 (anything less usually requires a strong co-signer — immediate family member – ie: spouse/ significant other, parents, siblings, grandparents).
  • 100% of employment income can be used for the mortgage loan provided you are returning to work within 12 months of the closing date.
  • 60% of your income will be used if you are returning to work more than 12 months after closing.
  • Letter of Employment stating return to work date.
  • Self-employed, or you are not salary or guaranteed hours you will be required to use 2 years’ T4’s/ NOAs to qualify at the percentages noted above.
  • Whether you are pregnant or on maternity leave lenders can not discriminate or prevent you from qualifying for mortgage financing.

What you require on the Letter of Employment?

In order to evaluate your application using 100% of your typical income you must provide the bank/ financial institution with a ‘return to work’ letter. It must state your employment status. This letter must include:

  • Your original start date.
  • Plan to return to work date.
  • Job title and income information.
  • A clause stating that you will be returning at your full employment income. Regardless of previous years’ T4s or Notice of Assessments.
  • Must be on company letter head.
  • Must have current date and contact information listed.

For more information on writing an Employment Letter check out my article here.

Letter of Employment

What can working with a mortgage broker do for me?

A Mortgage Advisor can help guide you through applying for a mortgage pre-approval. Moreover, a broker will help find a lender that suites your immediate requirements. Most Realtors (before showing you homes on the market) will also require a Mortgage Pre-approval letter confirming that you qualify for a mortgage.

As a Brokerage with access to over 40 lenders, we are able to submit your mortgage application to lenders that will take 100% of your usual income into account (NOTE: if you will be returning to work within 12 months after your maternity leave starts). This means you will qualify for the same amount of financing as you would if you were not on leave.

You will also have access to the best available mortgage rates.

Maternity leave does not affect your mortgage application. Simply contact our office for a Free Consultation and discuss your options for buying a house, fixing bad credit, using maternity benefits, and calculating your mortgage payments for your parental leave lower income.

Mortgage Broker Regina

 


Kim Seifert

Mortgage Broker  lic# 316147

M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

16 Sep

Purchase Plus Improvements Mortgage

Mortgage Tips

Posted by: Kim Seifert

What is a Purchase Plus Improvements Mortgage?

Purchase Plus Improvements Mortgage helps qualified homebuyers carry home improvement costs into their mortgage with as little as 5% down. The Purchase Plus Improvements program is designed for borrowers who want to make improvements to their home immediately after taking possession of the purchased property. The Improvements Program allows homeowners to do so with one manageable mortgage payment.

The Purchase Plus Improvements and Refinance Plus Improvements programs are administered through the three main mortgage default insurers (purchase plus improvements CMHC, Sagen improvement program, Canada Guaranty Improvement program).

Purchase Plus Improvements Mortgage

What does this mortgage allow?

  • The cost of home renovations are added to the home purchase price. Mortgages are available up to 95% Loan-to-Value (LTV) or refinances up to 80% LTV. (NOTE: you can only refinance in Canada up to 80% LTV).
  • Maximum of $40K for home improvements or up to 20% of the appraised property value.
  • Allows renovations that will improve the value of the property. It will not allow items that can be removed from the home. For example: appliances, blinds (shutters are considered built in). Garages, roofing, fencing, upgraded kitchen, bathroom renovations, windows, paint, flooring, adding on to the home, and landscaping are just some of the more popular improvements people complete.
  • The home improvements can be completed by a professional contractor or DIY. (NOTE: You can not charge for your own labour).
  • Amortization up to 25 or 30 years. This depends on the lender and if the mortgage is high ratio or conventional.
  • Maximum 120 days post funding to complete the improvements. (NOTE: Some exceptions apply, especially if COVID restrictions are delaying delivery of material).
  • Same great Mortgage Rates apply.

How does the Purchase Plus Improvements Program work?

Step 1: Once you have an accepted Offer to Purchase work with your Regina Mortgage Broker to determine what renovations need to be completed, gather a rough idea of how much they will cost, and what CMHC, Sagen, Canada Guaranty will allow.

Step 2: Acquire improvement quotes from professional contractors on company letter head and supply to the lender and mortgage insurer. Make sure the contractor quotes cover all anticipated costs and contain a detailed list of materials and labour costs as you can not go back later and ask for more funds.

Step 3: Once improvement quotes have been summitted to the lender they will send an appraiser to do an “As-Is” & “As-Improved” appraisal.

Step 4: Your local Regina Mortgage Broker will get your new mortgage approved based on the homes ‘As-Improved’ value.

Step 5: Once the sale of your new home has concluded and you take possession of your new home, you can immediately start the renovations that were submitted to the lender. You have to stick to the lender approved renovations. Since the lender will not release the funds until after the renovations have been completed you can use personal cash, credit cards, or lines of credit to pay for the improvements upfront.

Step 6: Notify the Mortgage Professional once you are getting close to completing the improvements. Supply the Mortgage Broker with the paid invoices and the broker will submit to the lender for their review. This will trigger the lender and mortgage insurer to request a final inspection to verify the home improvements have been completed as directed.

Step 7: Once the lender receives the final inspection report they will direct the lawyer to release the funds. Usually, the lawyer will also be instructed to pay out any credit cards, lines of credit that have been used to pay for the home renovations. If any of the contractors are still expecting payment this will also be looked after.

Step 8: With the upgrades done, and all the mortgage details taken care of, you can fully enjoy your new home.

Notes:

  • You have access to the same great mortgage interest rates for which you qualify. There are no hidden costs or mortgage rate increases for this program (NOTE: some lenders will request the borrower to pay for the appraisals — ask your mortgage professional upfront).
  • Have firm price quotes prior to finalizing your mortgage, this will speed up the process.
  • You will not receive any funds for the renovations until after the work is completed and reviewed by the bank and/or financial institution.

Conclusion

Very solid program and your local Regina Mortgage Broker will walk you through each step along the way. So, thinking of purchasing a home remember that their are Purchase Plus Improvement Programs available to you.

Not buying a home at this time? But you still want to renovate? No worries, as the Refinance Plus Improvements program is there for you. Remember the lowest rates available for your next mortgage loan still apply and no hidden fees.

Mortgage Broker Regina

 

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

15 Sep

Regina Mortgage Broker

Mortgage Tips

Posted by: Kim Seifert

Regina Mortgage Broker and Business Associations

To secure the best interest rates, contact a local Regina Mortgage Broker. Using a local broker in Regina provides you the ability to have a local Real Estate expert that knows and understands local market.

Mortgage Broker in Regina

Mortgage Broker Regina Advantages

Using a mortgage broker in Regina poses many benefits, some of which includes:

·        Increased exposure to lenders, mortgage products and best available mortgage rates

·        Only required to pull your credit report once to compare multiple rates and lenders.

·        The mortgage broker can negotiate on your behalf and pass on some of their volume discounts to you.

·        Greater flexibility when finding a time to meet with your broker in-person as mortgage brokers usually have extended hours, outside of the typical bank business hours.

·        Access to your mortgage brokers large amount of industry knowledge as they are not limited to products from one lender.

·        They can help with a number of mortgage solutions such as: debt consolidation, mortgage refinancing, mortgage renewals, home purchase, second homes, and provide one pre-approval.

·        Free service, as mortgage brokers are paid by the lender that provides your mortgage. Exception is working with Private lenders that do not pay finders fees.

Mortgage Broker Association

As provincial associations are not mandated the majority of Regina Mortgage Brokers belong to Mortgage Professionals Canada (formerly CAAMP). Mortgage Professionals Canada is a national mortgage broker industry association which ensures ethical and professional standards are maintained.

Mortgage Broker Licensing in Saskatchewan

For Regina mortgage brokers to be able to conduct business, they must meet the education and experience requirements outlined by the Financial and Consumer Affairs Authority of Saskatchewan. This includes 24 months of experience, the completion of an approved mortgage broker education course, and a criminal record check. The Financial and Consumer Affair Authority of Saskatchewan enforces the Mortgage Brokers Act and Regulations to protect the public and betters the mortgage broker industry.

Other Professional Ties

When purchasing a new home or property in Regina you will come into contact with multiple professionals all who play different roles in the purchase process. The main individuals you will work with are realtors, home inspectors and real estate lawyers.

Realtors are overseen by the Real Estate Council of Saskatchewan. They have access to home sales data (MLS) and can help you find the right property and negotiate with the seller on your behalf.

·        Recommended Realtor in Regina:

Home Inspectors provide home inspections to determine the condition of the property. A home inspection will allow you to determine the required maintenance and repairs need on your property. To be a licensed home inspector in Saskatchewan you must meet the requirements laid out by CAHPI Saskatchewan (Canadian Association of Home & Property Inspectors).

·        Recommend Regina Home Inspectors:

Real Estate Lawyers execute all legal documents such as a purchase agreement and mortgage agreement and ensures your rights as a buyer are upheld.

·        Recommended Lawyers in Regina :

How to select a local Regina Lawyer — here

How to select a local Regina Realtor — here

Mortgage Broker Regina


Kim Seifert

Mortgage Broker lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca
The Mortgage Firm lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

14 Sep

What is an employment letter?

Mortgage Tips

Posted by: Kim Seifert

What is an employment letter?

An employment letter for mortgage purposes is a document provided by your employer that confirms your current employment status and income. Most banks and Financial Institutions verify income as a part of their due diligence processes before extending a mortgage, line of credit, and/or HELOC.

Letter of Employment

Letter of Employment

 


Download the letter from employer for mortgage template below:

Word document (.docx)

Google document

Small business owners might not have an employee letter for mortgage template. When you request an employment verification letter provide these attached templates. We can help guide the employer and write an employment verification letter with them.

Why do I need a letter of employment for mortgage?

Lenders must do their due diligence before extending a mortgage to a borrower. One of the details they verify is the borrower’s employment status and income because lack of steady, reliable income which means the odds of the borrower defaulting on the mortgage is greater. Verification of employment and income is normally completed using a confirmation of employment letter from the borrower’s employer. You can usually obtain an employment letter for mortgage purposes by requesting one from your human resources (HR) department or supervisor. By the Mortgage Broker gathering all the documents you require before you apply for a mortgage, you will speed up the application process. A confirmation of employment letter for a bank or another financial institution can take time. The sooner you start the process, the quicker you can secure your mortgage.

What should be included in an employment letter?

Lenders must do their due diligence before extending a mortgage to a borrower. One of the details they verify is the borrower’s employment status and income because lack of steady, reliable income means the odds of the borrower defaulting on the mortgage is greater.

  • Employer information:
    Most lenders require your employment letter to be issued on an official company letterhead that contains the company’s name, address, logo and contact details.
  • Employment status:
    The letter of employment should contain information about your employment status, including how many hours you work, your job title and how long you’ve been employed.
  • Financial information:
    The letter should state whether you’re paid hourly or you’re on a salary, how much you make, your payment cycle and if you get bonuses.
  • Date and signature:
    Make sure the letter is dated and signed by a representative of the employer.
  • Part-time Employment:
    The employment letter should state guaranteed hours, hourly wage along with your job title and start date.

Will all lenders require a letter to verify employment?

No, but most lenders will require some sort of verification. Whether that’s from a letter of employment, notice of assessment from the CRA, pay stubs or bank statements. If a letter isn’t requested by the lender, they may call or email your employer instead. Alternatively, the lender might give you a form for your employer to complete on your behalf.

Best Regina Mortgage Rates

Best Mortgage Rates

Want to see what rates are out there? Compare mortgages

Most lenders want to verify your employment as a part of their due diligence. This can involve getting a letter from your employer, having your employer fill out a form or having your lender call or email your employer. Some lenders might skip this process and instead ask for proof of employment via notice of assessments, pay stubs and bank statements. Whichever option they choose, the process is generally pretty simple, but it helps to be prepared.

If you’re just getting started with researching the mortgage process, start your search here.

 

 

Frequently asked questions:

How recent does the employment letter need to be?
Most lenders require the employment letter to be no older than 60 days from the date of receipt, but it can vary from lender to lender. If you have a letter that’s more than a couple of months old, ask your lender if you’ll need a new copy that’s been signed and dated more recently.

Can I provide my lender with a faxed copy of the letter, or does it need to be the original?
This will vary depending on the lender’s individual policies and eligibility requirements, but most lenders will accept a faxed copy of the employment letter.

Where can I get a proof of employment letter template?
At the top of this guide, there is a template that you can download and use. Some employers have their own templates since employment verification is a common request from employees. Alternatively, you can attempt to make your own letter, just be sure that it includes all the necessary information.

What if it’s a phone call instead of a letter?
If your lender lets you know that they’ll be calling your employer to verify your employment, give your supervisor (or another employer representative) notice to be courteous. It’s also a good idea to ask your employer if they need any information from you before the call.

Self-Employed will I require a Letter of Employment?
If you are Self-employed general lenders do not require a letter of employment unless you take a salary.

Does the employment letter require all employment history?
No, the lender will only require an employment letter from your current employer(s).

Should I write the letter myself?
No, the employers Human Resource Department, or immediate supervisor should write the employment verification letter.

Contact Information:

Mortgage Broker Regina


Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

 

14 Oct

Teaser Rate – Is It Worth Signing Up to Get?

Mortgage Tips

Posted by: Kim Seifert

Is It Worth Signing Up to Get the Teaser Rate?

Teaser Rate: You’ve probably seen a local gym offering a promotion along the following lines: sign up now and your first two months are only $10! Naturally, you have to sign a contract to get this rate, and after the two months are up, you’ll be paying far more than $10 a month.

This kind of offer is known as a teaser rate and it’s not limited to gyms. Banks in Canada are currently advertising teaser rates for mortgages, GICs and high-interest savings accounts.

Why do banks use teaser rates? Simple. It’s a way of attracting new customers (or, in some cases, of retaining current ones). Everyone likes a bargain, and the prospect of a better rate is difficult to turn down. Psychologically, consumers may also pay more attention to the initial rate (the teaser) than the rate that governs the majority of the product’s term.

Teaser rates always seem like a good deal. But are they really worth it? Let’s take a look at three offers currently available and do the math to see how much you actually save.

1. Teaser Rate Special Mortgage Offer from CIBC

CIBC had a 4-year fixed mortgage promotion with a teaser rate of 1.99% for the first 9 months, followed by 2.83% for the rest of the term. Assume you’re buying a $400,000 home with 20% down ($80,000), which leaves you with a $320,000 mortgage loan.

At 1.99%, your payments for the first 9 months would be $1,354/month. Subsequent months, when the rate jumps to 2.83%, would be $1,487. The teaser rate is a discount of $133 on the normal payment.

How does this look over the course of the 4-year term?

You would pay 9 months x $1,354 = $12,186
Followed by 39 months x $1,487 = $57,993
$12,186 + $57,993 = $70,179

What if, rather than going for the teaser rate, you just got a 4-year fixed mortgage for 2.49%, which was the best mortgage rate on at that time. In this case, based on the same $400,000 house and $320,000 mortgage, your monthly payment would be $1,432.

48 months x $1,432 = $68,736

That’s a savings of $1,443 ($70,179 – $68,736) over 4 years compared to the CIBC offer described above.

You shouldn’t just look at the numbers when comparing mortgages, however. Another key part of your decision rests on the terms and conditions of each offer. One aspect in particular you should find out is whether there are any unusual restrictions on your ability to make prepayments towards your principal. CIBC says its promotional offer comes with no unusual restrictions, aside from its standard charges for paying off your mortgage early. (We broke down CIBC’s prepayment charge calculations in a blog post, last year.)

2. Teaser Rate from Tangerine Savings Account

Last year, Tangerine offered 2.50% on all new deposits from April 8th to July 31st, to a maximum of $250,000. After the special offer period was over, savings accounts earned interest at a rate of 1.30%. Interest was calculated daily.

Let’s say you had $10,000 at another bank earning 1.30% in early April 2014 and you planned to leave it there for an entire year. How much more interest would you have earned if you switched to Tangerine to take advantage of their special offer?

First, let’s look at what you would earn at your existing bank.

Principal x Daily Interest Rate (Annual Interest Rate ÷ Days Per Year) = Total Daily Interest
$10,000 x (0.0130 ÷ 365) = $0.356 per day

To find out the annual interest, we then just multiply this figure by 365 days.

$0.356 x 365 days = $130

Total interest (non-compounded) earned at your existing bank would be $130.

For the Tangerine offer, there were 23 days in April that paid the special rate, followed by the entire months of May (31 days), June (30 days) and July (31 days). That’s a total of 115 days at 2.50%.

Here’s how much interest you would earn if you had moved your money over.

Principal x Daily Interest Rate (Annual Interest Rate ÷ Days Per Year) = Total Daily Interest
$10,000 x (0.0250 ÷ 365) = $0.684 per day
$0.684 x 115 days = $78.66

And that’s just for the promotional period. Tack on the 1.30% interest rate you’d earn for the other 250 days in the year.

Principal x Daily Interest Rate (Annual Interest Rate ÷ Days Per Year) = Total Daily Interest
$10,000 x (0.0130 ÷ 365) = $0.356 per day
$0.356 x 250 = $89.04

$78.66 + $89 = $167.66

Your grand total in interest would be $167.66, or, expressed as an annual percentage, 1.677%. That means you would’ve earned an additional $37.66 compared to what you would’ve received from your existing bank. It’s not nothing, but it may not have been worth the hassle of switching bank accounts either. (Imagine how much smaller that difference would be on $1,000 or $2,000.)

The conclusion?

We’re not the only ones who are wary of these offers. Both Rob Carrick and Ellen Roseman have written extensively about whether or not Canadians should sign-up for financial products based on promotional interest rates, especially if there are transfer fees involved (common with TFSAs). If you’re paying $45-150 to transfer from one bank to another, that’ll likely eat up all the additional savings the promotion should’ve brought you.

Banks want your business and they’ll dangle all sorts of short-term promotions to get it. Before signing on the dotted line, or its electronic equivalent, make sure it’s actually a deal worth doing. It only takes a few simple calculations to figure out if it’s worth taking advantage of a teaser rate.

Source Article by: Alyssa Furtado

Mortgage Broker Regina

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

28 Aug

DLC Leasing and Financing

Mortgage Tips

Posted by: Kim Seifert

About DLC Leasing

There are many benefits for a business to choose to finance, rather than purchase equipment. It helps them conserve valuable capital, realize tax advantages and immediately obtain the equipment needed to grow. DLC Leasing originates and services a full range of financing for businesses and professionals. Our unique expertise and experienced support systems give you the ability to tailor financial solutions that suit any and all business requirements.

We have extensive and unique expertise in offering a wide range of leasing products and terms to clients with a variety of credit profiles. We provide leasing products for sole proprietors, partnerships, limited companies, public companies, municipalities and professionals. We structure approvals for start-up operations through to mature companies with prime, near prime or sub-prime credit.

What services does DLC Leasing offer?

1) Commercial Equipment Leasing

Enables businesses to obtain the use of machinery or other equipment on a rental basis while avoiding the need to invest capital in equipment. Ownership rests in the hands of the financial institution or leasing company, while the business has actual use of the equipment.

Who is eligible?

What is eligible?

Any asset that is new or used, and where the function is for cash-generating business-related purposes. A business can lease practically any asset depending on their credit, including:

2) Merchant Cash Advance

A Merchant Cash Advance is a lump-sum payment to a business in exchange for an agreed upon percentage of future credit card and/or debit card sales.

Who is eligible?

3) Business Factoring

A financing method in which a business owner sells accounts receivables at a discount to a third-party funding source in order to raise capital.

Who is eligible?

Incorporated businesses such as:

4) Vehicle Leasing

Vehicle leasing is the leasing (or the use of) a motor vehicle for a fixed period of time. It is commonly offered by dealers as an alternative to vehicle purchase, but is widely used by businesses as a highly cost-effective method of acquiring vehicles for business, without the need for cash outlay.

Who is eligible?

  • Incorporated Businesses
  • Proprietorships
  • Professionals (that use their vehicle for business use)
  • Consumers

 

Vehicle Leasing Cheat Sheet

Vehicle Use

Business (Commercial)

Personal (Consumer)

Mileage – under 90,000

A credit – Yes/B credit – Yes *

Yes (nothing over 90,000)

Age – under 5 years

A credit – Yes/B credit – Yes **

Yes (nothing over 5 years old)

Cost – over $10,000 pre-tax

A credit – Yes/B credit – Yes

Yes (nothing under $10,000)

Private Seller

Okay, except Ontario

Okay, except Ontario

* must be under 150,000km ** must be under 8 years

In order to qualify as Business or Commercial use, the vehicle must be used primarily for business, not driving to work. We are not able to finance Taxi or Limo vehicles at this time.

Leasing

For further details on leasing please feel free to contact me.

21 Aug

CHIP Reverse Mortgage What you Need To Know

Mortgage Tips

Posted by: Kim Seifert

CHIP Reverse Mortgage -EVERYTHING YOU NEED TO KNOW

Chip reverse mortgageWouldn’t it be wonderful to be able to have money to do more of the things you love? To be able to have the freedom to pursue things you truly enjoy, especially in your Golden Years? Enter in a CHIP Reverse Mortgage! A Reverse mortgage is a simple and sensible way to unlock the value in your home. This mortgage product can tap into your home’s equity and turn it into cash to allow you to enjoy life on your terms.

A CHIP Reverse Mortgage is a loan secured against the value of the home. With this type of mortgage product, you are not required to make regular mortgage payments. Instead the loan is repaid only when the homeowners no longer live in the home. Keep in mind that there are conditions with this. The homeowner is required to keep the property in good condition and keep up to date on property taxes and insurance.

There are also other qualifications an applicant must meet in order to qualify for this type of mortgage:

  1. Homeowners must be age 55 or older
  2. You must reside in your home/residence for 6 months out of the year
  3. If the title of the property is registered to more than one person, you must be registered as joint tenants, not just as tenants in common. The difference between these two types of shared ownership is what would happen to the property when one of the owners passes on. If the property is joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owner. If it is tenant in common the deceased tenant’s property interest belongs to his or her estate.
  4. Although you do not need to have an income to qualify for the borrowed amount as there are no payments required, you will have to stay up to date on paying the property taxes, fire insurance and strata fees (if applicable). The income you have coming in will have to be enough to adequately cover those associated fees.

Now for the big question you are all asking: How much can I borrow?

Well, to answer this there are factors that contribute to the total value. First, your age is a determining factor for this mortgage product. Essentially, the older you are the more you will qualify to borrow. The second factor is in direct relation to the details of your property. For instance, a detached home will qualify to borrow a higher amount than say a condo or townhome. The final factor to consider in this is the maximum amount that can be accessed through a CHIP Reverse Mortgage. The max amount is set at 55%. So, if your property is worth $1,000,000 and you are looking to qualify for the maximum amount, that would give you a mortgage of $550,000. If accessing 55% Loan To Value is not high enough there are private lending options that will consider increasing the Loan To Value up to 65%.

An easy way to take all three of those factors into consideration is to visit www.chipadvisor.ca and enter in your details. This can give you a rough idea of what the maximum amount is that you will be able to receive through a CHIP Reverse Mortgage.

One final note is to consider the costs associated with a CHIP Reverse Mortgage. Yes, there are no required payments due while you are living in your home. However, you should expect the following costs to be associated with this product:

1. An appraisal of your property will be required with an approximate cost of $300.
2. There will be legal costs associated which will be around $1495.00 This amount can be included in the mortgage funds and does not need to be paid out of pocket.
3. Independent legal advice is required on all CHIP Reverse Mortgages. The approximate cost will be $600. However, this again can be included in the mortgage funds and does not need to come out of your pocket.
4. Mortgage Penalties may incur if you are breaking the term of your mortgage.

  • In the 1st year it is 5% balance of the funds owing
  • In the 2nd year it is 4% balance of the funds owing
  • In the 3rd year it is 3% balance of the funds owing
  • In the 4th year and beyond it is 3 months interest penalty
  • If you are deceased, no penalty

If you are selling to move to a nursing home the penalty fees will be reduced by 50%.

Below, Reverse Mortgage myths are separated from the facts:

1. Myth: The bank owns the home.
Fact: The homeowner always maintains title ownership and control of their home, and they have the freedom to decide when and if they’d like to move or sell.

2. Myth: Those with a reverse mortgage will owe more than their house is worth.
Fact: HomEquity Bank’s conservative lending practices allow clients to take a maximum of 55% (33% on average) of the home’s appraised value. In fact, 99% of HomEquity Bank’s clients have equity remaining in the home when the loan is repaid.

3. Myth: Reverse Mortgages are too expensive because the rates are high.
Fact: HomEquity Bank rates are modestly higher than regular mortgages because there are no payments required. HomEquity Bank offers rates as low as prime +1.25%*.

4. Myth: The bank can force the homeowner to sell or foreclose at any time.
Fact: A reverse mortgage is a lifetime product, and as long as property taxes and insurance are in good standing, the property remains in good condition, and the homeowner is living in the home, the loan won’t be called even if the house decreases in value. Reverse mortgages provide peace-of-mind that the homeowner can stay in their home as long as they’d like.

5. Myth: The homeowner cannot get a reverse mortgage if they have an existing mortgage.
Fact: Many of our clients use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things

6. Myth: The homeowner cannot get a reverse mortgage if they have an existing mortgage.
Fact: Many of our clients use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things.

7. Myth: Surviving spouses are stuck paying the loan after the homeowner passes  away.
Fact: Surviving spouses can choose to remain in the home without having to make a payment unless they choose to sell the home.

8. Myth: A reverse mortgage is a solution of last resort
Fact: Many Financial professionals recommend a reverse mortgage because it’s a great way to provide financial flexibility. Since it’s tax-free money, it allows retirement savings to last longer.

Below are some common questions and answers:

Will the homeowner owe more than the house is worth?
The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.

Will the bank own the home?
No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have property insurance, and maintain the property in good condition.

What if the homeowner has an existing mortgage?
Many of our clients use a reverse mortgage to pay off their existing mortgage and debts.

Should reverse mortgages only be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.

What fees are associated with a reverse mortgage?
There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as our fee for administration, title insurance, and registration. With the exception of the appraisal fee, these fees are paid for with the funding dollars.

What if the homeowner can’t afford payments?
There are no monthly payments required as long as the homeowner is living in the home.

In closing, a CHIP Reverse Mortgage product is a unique product that can be very powerful and useful for a certain demographic. It can allow you tap into the funds that you need while allowing you to remain in your family home. We have seen clients use their home’s equity for a variety of things from supplementing their pension income, to paying off debts and helping out family without depleting their current savings. It offers unique benefits that may just be right for you.

If you are interested or want to learn more, contact me today and I can give you the details that will relate to your unique situation.

Mortgage Broker Regina

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca    
The Mortgage Firm 
lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5