I have been sitting on this blog for a while now, waiting for the right moment to launch, waiting to be moved into action by some external force. In other words,

I needed inspiration…

This world, our world, this planet that we all call home… it’s changing. It changes every single day, and now more than ever, that change has become exponential.

One person alone has the power to affect change. When that person invites others to collaborate for a deeper understanding of their purpose, the change then becomes more powerful.

Have a read: BLOG – Collaboration on a Global Scale

Credit is King …. check this great blog out from my DLC colleague Dave

While people often think of mortgage brokers when they are first time home buyers, we can help people in a variety of different ways.
Recently Garrett LaBarre of Calvert Home Mortgages in Calgary shared a success story with brokers. He had a client referred to him by a mortgage broker who had a conundrum. She was paying her credit card balances on time month after month, but couldn’t get them paid down due to the high interest rates. As a result, she had a 567 credit beacon score. Her bank would not refinance her mortgage or offer her a debt consolidation loan. She was stuck.
The solution was to use some of the equity in her home to pay off the credit card debt and lower the payments to a more manageable monthly. Even though her mortgage interest rate was higher than a regular lender, it was a lot lower than a credit card rate and it was amortized over 30 years.
The result was that within three months this client had her credit score jump from 567 to 769!
What an amazing result. Now there’s one more person who knows that mortgage brokers can do things that the banks can’t do.
If you have a challenging story, be sure to contact your local Dominion Lending Centres mortgage professional for help.

Under the home buyers’ plan, a participant and his or her spouse or common- law partner is allowed to withdraw up to $25,000 from his or her RRSP to buy a home. Before 1999, only the first- time home buyers are permitted to buy a home under this plan. Now a person can take an advantage of HBP plan more than one, two, three, four or more times as long as the participant in this plan fulfills all other conditions. The house can be existing or can be built.

Are you a first – time home buyer?
You are considered a first-time home buyer if, in the four year period, you did not occupy a home that you or your current spouse or common-law partner owned. The four-year period begins on January 1st of the fourth year before the year you withdraw funds and ends 31 days before the date you withdraw the funds.
For example, if you withdraw funds on March 31, 2018, the four-year period begins on January 1, 2014 and ends on February 28, 2018.
If you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.
Qualifying home – a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in a housing unit located in Canada, also qualifies.

Repayment of withdrawal amount into RRSP
Generally, you have up to 15 years to repay to your RRSP, the amounts you withdrew from your RRSP(s) under the HBP. However, you can repay the full amount into your RRSP(s)
Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan (HBP) statement of account, with your notice of assessment or notice of reassessment.
The statement will include:
• the amount you have repaid so far (including any additional payments and amounts you included on your income tax and benefit return because they were not repaid);
• your remaining HBP balance; and
• the amount you have to contribute to your RRSP and designate as a repayment for the following year.

If you have any questions contact a Dominion Lending Centres Mortgage Professional near you.

Some shocking election results. Love it or hate it, we have to deal with it. Great article from my colleague Angela below that talks about how the elections could effect your mortgage. Check it out

With all the news we have seen on the election, I thought I would sum it up from a mortgage industry perspective.

What the liberal win means for your mortgage:
1. We will see the continuation of the First Time Home Buyers’ Incentive. Check out the link for more information here:
2. Property Transfer Tax modifications were on the platform, so we will await the date that change is applicable.
3. Consumers will still be able to withdraw up to $35,000 from their RRSPs as part of the government’s Home Buyers’ plan.
4. Bank of Canada Rates may not decrease as expected this year – unless there is a significant downtown in the market suddenly- based on the snapshot of recent activity that doesn’t appear as likely. It certainly makes it easier for the lenders not to pass the decrease down the line to the consumer.
5. We will likely see a national housing tax implemented in addition to the provincial ones already in place.
For items 1, 2 & 5, here is a link.
It doesn’t appear we will see any of the changes to the stress test or amortization hoped for by many.
Stay tuned for more updates and what the BOC decides to do Oct. 30 and Dec. 4.
While the constant in our market will always be change, Dominion Lending Centres mortgage professionals are here at the frontlines to help you navigate the market to your advantage and save you money. Please reach out to us with any mortgage questions on how we can help you or those you care most about.

HISTORY OF MORTGAGE CHANGES

The mortgage industry seems to be ever-changing. What was applicable one day seems to no longer apply to the next and at times, it can be confusing to navigate through what all of these changes mean–and how they impact you directly. As Mortgage Brokers, we firmly do believe that although the industry has gone through MANY changes over the years, each time our clients are able to overcome them by practicing the same sound advice–which we will reveal at the end! But first, a walk through of the mortgage changes over the past few years and how the industry has changed:

LOOKING BACK

Before 2008

During this time, lending and mortgages policies were much more lenient! There was 100% financing available (YIKES!), 40-year amortizations (WOW!), cash back mortgages, 95% refinancing, 5% down payment required for rental properties, and qualifications for FIXED terms under 5 years and VARIABLE mortgages at discounted contract rate. There was also NO LIMIT for your GROSS DEBT SERVICING (GDS) if your credit was strong enough. Relaxed lending guidelines when debt servicing secured and unsecured lines of credits and heating costs for non-subject and subject properties.

July 2008

We saw the elimination of 100% financing, the decrease of amortizations from 40-35 years and the introduction of minimum required credit scores, which all took place during this time period. It was also the time in which the Total Debt Servicing (TDS) could only be maxed to 45%.

April 2010
This time period saw Variable Rate Mortgages having to be qualified at the 5-year Bank of Canada’s posted rate along with 1-4 year Fixed Term Mortgages qualified at the same. There was also the introduction of a minimum of 20% down vs. 5% on investment properties and an introduction of new guidelines on looking at rental income, property taxes and heat.

March 2011

The 35-year Amortization dropped to 30 years for conventional mortgages, refinancing dropped to 85% from 90% and the elimination of mortgage insurance on secured lines of credit.

July 2012

30-year amortizations dropped again to 25 years for High Ratio Mortgages (less than 20% down). Refinancing also dropped down this time to 80% from 85%. Tougher guidelines within stated income mortgage products making financing for the Business for Self more challenging and the disappearance of true equity lending. Perhaps the three biggest changes of this time were:

● Ban mortgage insurance on any million dollar homes
○ 20% min requirement for down payment
● Elimination of cash back mortgages
○ Federal guidelines Min; requirement of 5% down
● Introduction to FLEX DOWN mortgage products

February 2014

Increase in default insurance premiums.

Februrary 2016

Minimum down payment rules changed to:
● Up to $500,000 – 5%
● Up to $1 million – 5% for the first $500,000 and 10% up to $1 million
● $1 million and greater requires 20% down (no mortgage insurance available)

Exemption for BC Property Transfer Tax on NEW BUILDS regardless if one was a 1st time home buyer with a purchase price of $750,000 or less.

July 2016

Still fresh in our minds, the introduction of the foreign tax stating that an ADDITIONAL 15% Property Transfer Tax is applied for all non residents or corporations that are not incorporated in Canada purchasing property in British Columbia.

October 17, 2016: Stress testing

INSURED mortgages with less than 20% down Have to qualify at Bank of Canada 5 year posted rate.

November 30, 2016: Monoline Lenders

Portfolio Insured mortgages (monoline lenders) greater than 20% have new conditions with regulations requiring qualification at the Bank of Canada 5 year posted rate, maximum amortization of 25 years, max purchase price of $1 million and must be owner-occupied.

AND HERE WE ARE NOW…

January 2018: OSFI ANNOUNCES STRESS TESTING FOR ALL MORTGAGES + NO MORE BUNDLING AND MORE RESTRICTIONS

•If your mortgage is uninsured (greater than 20% down payment) you will now need to qualify at the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%

•Lenders will be required to enhance their LTV (loan to value) limits so that they will be responsive to risk. This means LTV’s will need to change as the housing market and economic environment change.

•Restrictions will be placed on lending arrangements that are designed to circumvent LTV limits. This means bundled mortgages will no longer be permitted.

*A bundled mortgage is when you have a primary mortgage and pair it with a second loan from an alternative lender. It is typically done when the borrower is unable to have the required down payment to meet a specific LTV.

BOTTOM LINE: WHERE DO WE GO FROM HERE?

As you can see, the industry has always been one that has changed, shifted and altered based on the economy and what is currently going on in Canada. However, with the new changes that have come into effect this year, we recognize that many are concerned about the financial implications the 2018 changes may have.

The one piece of advice that we promised you at the start of this blog, and one that has helped all our clients get through these changes is this: work with a Dominion Lending Centres mortgage broker!

We cannot emphasis the importance of this enough. We have up to date, industry knowledge, access to all of the top lenders and we are free to use! We guarantee to not only get you the sharpest rate, but also the right product for your mortgage.

GEOFF LEE
Dominion Lending Centres – Accredited Mortgage Professiona

KEEPING YOUR CREDIT SCORE HEALTHY

If you haven’t seen your credit score, you’re not alone.

Many of our clients don’t know about their credit score or even know what it is when we first meet with them. During our initial consultation, we go over your complete credit report with you. As an added bonus, we’ll even teach you how to read it.

So, how can you make sure you have a great credit score? Here are a few tips to get you started.

1. You need to have credit. It may be surprising – but your credit score goes up as more credit is available to you. We recommend at least two facilities: a credit card and a line of credit (or 2 credit cards).
2. You also have to pay your bills when they are due. That goes for your internet, cell phone and even parking tickets.
3. It also helps to start as soon as possible. The longer you have a clean record of paying your credit card, loans or other credit facilities, the better your credit becomes.
4. Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization.

Don’t ever hesitate to contact a Dominion Lending Centres mortgage professional about your mortgage related needs when you’re buying a property anywhere in Canada.

EITAN PINSKY
Dominion Lending Centres – Accredited Mortgage Professional