Creating your own down payment

Normally down payments can not be borrowed. However there are a few ways around this legally and ethically. So let’s first state that the down payment must be in your possession for 90 days and you must be able to provide bank statements to support that.

  1. You can borrow it from an existing line of credit. This should not be from the same source that is providing your mortgage, and you must be able to debt service for the payment.
  2. It can be gifted from a blood relative. A gift letter is required and you will then need to provide a statement showing that you are in possession of the funds.
  3. You can borrow it from your RRSP’s under the Home Buyer’s Plan. For a single applicant this amount is up to 35K and for a couple it is 70K. This is a tax free withdrawal and you have 15 years to pay it back.

However there is a better way to do the last step, and it’s best to start it as tax season is kicking off in February. Firstly consult a certified financial planner to find out your unused contribution room. Determine how much you need for your down payment. Take out an RRSP Loan for the amount of your unused contribution room. Then put this money in your RRSP for at least 90 days. Record this RRSP contribution on your tax return to get a refund. After the 90 days have passed take out the money from your RRSP and repay the loan. Lastly use your tax refund for your down payment.

Today I am thankful for the ability of exercise to clear my head, quiet early mornings while everyone else is still asleep and getting a peek at British farming life on the new Amazon Prime show Clarkson’s farm.

“Agriculture is our wisest pursuit, because it will in the end contribute the most to real wealth, good morals and happiness.” Thomas Jefferson

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

New House or new car?

The good weather if finely here and also now that phased reopening plans have started, this means that more and more people are out and about. I have noticed lately that lots and lots of people are shopping for a new vehicle, this is also coinciding with our current hot real estate market where it seems that everyone is also shopping for their first home or their dream home.

However I must caution you that as nice as those new wheels are, I would hold off on that purchase until after you have closed on your home. This is because that for every $400 in vehicle payments, it is effectively taking away $100,000 worth of purchasing power for your home. In the way that real estate has risen in the past year this is more like 200K as what was selling for 400K last year is now selling for 500K.

Finding out that your significant other is expecting does not mean that the 1st major purchase should be a mini van. Get the house sorted away first, keys in the door and closed BEFORE you even consider getting the vehicle. Just because you have received your mortgage approval does not mean that you can now put appliances on credit or finance a new vehicle. Lenders do a soft credit check prior to closing and if anything has changed prior to closing they will pull the financing. If a new vehicle is absolutely necessary prior to getting your home, buy used, buy cheap and pay cash.

Today I am thankful for another beautiful Sunday morning run on the trail, my favourite team sill in the hunt for the Stanley Cup and prospects who call on the weekend cause the banks are closed.

“Waiting is painful. Forgetting is painful. But not knowing which to do is the worst kind of suffering.” Paulo Coelho

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Appreciation

Appreciation is the gift that keeps on giving. It is commonly said that people will do more for honest and sincere appreciation than they will for monetary compensation. Placement firms know this as it is challenging to entice someone away from a position where they are paid well and appreciated.

Another example of appreciation at work, my brother wanted to treat his staff to a surprise as they have all been working hard during the latest phase of the pandemic. He reached out to my daughter who loves to bake and asked her to make homemade cupcakes with buttercream frosting. The staff really loved them and to further pass on the appreciation he increased the rate that he had promised to pay my daughter for the cupcakes by 50%.

“Be thankful for what you have, you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough”. Oprah Winfrey

Today I am thankful for my referral partners who continue to think of me to assist their clients with the biggest buying decision of their lives, I am thankful for my underwriters who in-spite of being over worked continue to be pleasant in all our interactions and my appraisers who are also working 12-15 hour days to meet the lenders demands continue to do it with a smile at least I feel that on the phone.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Friends and Family

If I had friends or family opening a business I would support them. If it was a restaurant, it would be my restaurant. If friends opened a bakery it would be my go to bakery. The same could be said if someone opened a garden centre ( yes my family have a garden centre) a plumber, eletrician or even a mechanic. They would all be my go to people.

However there a few careers that make it difficult to deal with people you know. Chances are you may not go to confession if you grew up with the priest in question. You may not go to the shrink who is a member of your family. Sadly also people find it difficult to go the mortgage broker who is a member of the family or a close friend ( some cases but not all).

You see in each of those three cases you are getting really personal details about the other person. Even though the information does not go anywhere other than me and the bank, I do understand. There are no hard feelings and if a close friend or relative doesn’t want me to look at their personal financial details and their credit report I will gladly refer them to a colleague that I know and trust.

Today I am thankful for my Friday calls with my family and how close we have become over the past year, my daughter who loves to bake and has an order to make cupcakes for a client, the gentle reminder that I forgot to change my voice mail.

“Family and friendships are two of the greatest facilitators of happiness.” John C Maxwell

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Stress Test

The purpose of a stress test is see if you have any weaknesses that need to be addressed. Like those who have heart disease and are required to jump on the treadmill to see how their heart responds to exercise, we have a stress test( since Jan 2018) for those looking to purchase a home or refinance their mortgage.

The purpose of the stress test for your mortgage is just to make sure that you will still be able to afford the payments in the event that mortgage rates increase rapidly. Until rather recently the rate used for qualification was 4.79%. While fixed and variable rates are much lower than this rate, it is used as a benchmark to make sure that you can still afford a mortgage if rates were to increase to that point. Now the government ( more specifically The Office of the Superintendent of Financial Institutions or OFSI) took action and changed the qualifying rate to 5.25% or the mortgage contract rate +2% whichever is greater. These changes take effect as of June 1st/2021.

What this essentially does is decrease your buying power by about 5%. Now I don’t think it will do anything to address the overheated real estate market. The problems that we are facing today have to do more with a overwhelming lack of supply rather than people spending more than they can afford to get into a home. Yes I know ( cause I am doing one for a client right now) that CMHC has programs available for developers of multi unit properties where they will finance up to 95% of costs if a certain percentage of units are deemed affordable housing units. However at the rate that these new developments are coming on the market it may take years for our real estate market to balance out. So tit tight, hang on and enjoy the ride.

Today I am thankful for a refreshing light rain during my morning run, reminders that come up in my calendar just in time to make sure that I don’t miss important events and a wonderful sales book written by an author that left us far too early.

The greatest weapon against stress is our ability to choose one thought over another. –  William James

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Liar, Liar

What’s the age old expression, liar liar pants on fire. Let’s face it as humans we have all told a white lie from time to time. From did you do this to who ate the last cookie. I am not suggesting that you lie, exactly the opposite I am going to show you the consequences if you do. I am going to cover three areas and how lying can effect you and those around you.

People lie to impress a potential mate or flat out lie to someone that they are in a committed relationship with. The end results of either situation are the same whereby you lose their trust and now are no longer in a relationship with them.

People lie to gain employment. They lie about past experience on their resume, hoping that nobody will notice and that if they get their foot in the door they can prove their worth and it will all work out. Companies protect themselves by screening applicants and if hired placing them on probationary periods so they can prove that they are good fit for the role and culture.

People lie to get a loan or a mortgage. In this instance it’s called fraud. People try to create their own job letters, alter their bank statements or tax forms. All this in an effort to get a loan that they would otherwise not qualify for. This is why I underwrite each file prior to sending it to the lender. Lender’s also google applicants and call each and every employer to verify information that was provided.

“If you tell the truth, you don’t have to remember anything”. Mark Twain

Today I am thank for for my wife picking me up just after the lighting started flashing last night as I was out on a tree covered trail walking our dog, wonderful neighbours with great advice and having several “Rock Star” referral sources they know who they are. Rock on!

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Hurry Up, and Wait!

The mortgage business like many others is filled with moments of hurry up and wait. Hurry up I need you to take my mortgage application, but have to wait to receive the supporting documents in order to submit it for approval. Hurry up and get me approved, but have to wait for the underwriter to review the file and approve it. Hurry up and get all the conditions met so I can advise my realtor, but have to wait for the fulfilment specialist to review all the documents.

As much as we and clients want things done yesterday, things take time. I find that the process proceeds much more smoothly when expectations are set in advance and advised what the timelines are for various stages. This is also why I request a full document package up front and upon submission so this minimizes any potential surprises and allows for a much smoother transaction.

Today I am thankful for receiving my 1st shot of the Pfizer-BioNTech vaccine, actually having access to a vaccine at all to fight this pandemic and being up before all the jackhammers started going this morning.

“Sure enough even the waiting will end…if you can just wait long enough.” William Faulkner

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Bridge the gap

Private loans or often called bridge loans help bridge the gap between your current situation to a better situation. Weather this be because of less than stellar credit, the sale of a property or the completion of construction. Private mortgage financing serves a valuable purpose to help make financing possible when everyone else is saying no.

What private mortgages are not are long term loans. They are called bridge loans for a reason. They are priced based on risk and also the pricing is an incentive to exit the private loan as quickly as possible. With interest only payments and hefty renewal fee’s, if left unchecked you could be eating up what equity you did have if your situation did not improve enough to pay them out. This is why it is fundamentally important to know your exit strategy ( how you pay them off) upon entering into a private loan.

If you need access to private mortgage financing for whatever reason, please reach out to me so we can determine if that type of financing is a good fit for you or your situation.

“Risk comes from not knowing what you are doing”. Warren Buffett

Today I am thankful for a great new podcast that I discovered from NPR called “How I built this“, my son’s class which the project was to make a healthy breakfast, private lenders who know how to turn around important files very quickly.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

It’s not about the mortgage!

Yes I am a mortgage broker and have been one for just over 19 years now. When clients come to me they aren’t just looking for a mortgage ( which translates to roughly death pledge from old french). In actuality they are not coming to me for an interest rate either, although some are steadfast that it is very important to them.

What they really want is access to capital to allow them to purchase or refinance a home. The mortgage is just a tool to make that happen. It’s similar to people who go to the hardware store looking for drills, they don’t really want a hand held machine but they really want is something to make holes of certain sizes.

The same can be said about the general public’s fixation on interest rates. Yes great rates are important, but isn’t what you care about the most is the amount of the payment coming out of your bank account? Amortization or the length of the life of your loan has a greater effect on the size of your payment that just the interest rate.

Financing your home is an important decision, don’t leave it up to people who may give you substandard advice. Talk with an expert who just does mortgages so you will get the best advice possible.

Today I am thankful for a dark raining morning where even the birds slept in, a quiet walk with my dog as most of the walker and runners took the day off and an ethernet adapter that arrived quickly from Apple.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

No Surprises!

Let’s face it there are people who like surprises and those who don’t. There are also good surprises and then there are bad surprises. Good ones include surprise birthday parties, surprise gifts, promotions and winning lotto tickets. The bad ones include but are not limited to larger than normal power bills, flat tire on your car the day or your big interview, in-laws showing up un announced and the worst one in my industry is mortgage discharge penalty surprises.

The best way to avoid these bad surprises is to be prepared. Have an account with 3 months pay for emergency expenses like your surprise power bill or your flat tire ( sorry I can’t help you with the in-laws). Now as for your mortgage discharge penalty. The best way to avoid an interest rate differential penalty is to have a variable rate mortgage as they come with only a 3 month interest penalty. In declining rate market like we have been for the last 10 years or so you are more often than not be hit with an interest rate differential penalty when going to break your fixed rate mortgage.

To lessen the blow of a whopping high penalty stay in touch with your lender leading up to a potential break of your fixed mortgage as IRD penalties will change from month to month. But as I have said if possible go variable so you can protect yourself from any potential sudden surprises when you need to break that mortgage.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here