READING THIS COULD SAVE YOU MONEY

(HOW TO RENEW YOUR MORTGAGE IN 5 EASY STEPS)

If you have a mortgage, chances are unless you win a lottery (cha-ching $$$) you’ll be doing a mortgage renewal when your current term has finished. While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal? Mortgages are amortized *over a set term* which can vary from 1-10 years.  About 6 months before the end of your term, your current lender will suddenly become your “Best Friend” showering you with attention and trying to entice you with early renewal offers… Please, please, please Mortgage borrower, sign here on the dotted line to renew… it’s sooo easy!!

You have 3 options

1. Sign and send back as is (don’t do it, really I mean it… don’t do it!!)
2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
3. Talk to ME and together we can discuss the best options available for your situation.

Lenders know that 80% of people will sign their renewal forms, because it’s easy. Banks & Lenders are a business and as such they want to make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get. Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home?

Yes, signing the renewal document is easy, however, it’s in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket… so its time to get to work!

5 steps to save you money on your mortgage renewal

1. Receive the renewal offer from your current mortgage lender and examine immediately, which gives you enough time to make an informed decision.
2. Do your research via the internet and phone calls to find out about current rates.
3. Phone your current lender and negotiate!
4. If your lender will not offer you a better rate then it’s time to move your mortgage. YES, you will have to complete a mortgage application and gather documentation, just like you did for your original mortgage.
5. Take a look at your budget and see if you can increase the amount of your mortgage payments above the mandatory payments and save money by paying off your mortgage quicker.
   Your mortgage is one of your biggest expenses. For this reason, it is imperative to find the best interest rates and mortgage terms you possibly can.

As you can tell there is lots to discuss about mortgage renewals.  To save money, call me anytime to help you shop your mortgage around at renewal time.

Original Article posted by  KELLY HUDSON

Current mortgage rules dictate that home owners can purchase a property with as little as 5% down. Did you know that on top of this, they can also access additional funds for renovation costs at the time of purchase?

Once you own a home it can only be refinanced up to 80% of the market value in the future. This means that most likely first time home owners with 5% down payments will not be able to access low interest mortgage funds for many years after taking possession of their properties. Home values would have to increase  / or balances paid down significantly before refinancing to complete renovations or upgrades on the property will be possible.

Knowing this, as a buyer if you are considering an older property that may need some renovations in the next 5 years  – I strongly recommend considering the purchase plus improvements program. Not only will you build equity right away, customize the home to suit your needs and tastes but  you also have the option to roll it into your lower interest mortgage rate at an affordable amortized payment.  

How does it work?

At the time of purchase you will be required to provide quotes to the lender for the work that you plan on doing. The bank and insurer have to agree that the renovations you are completing will increase the value of the property by what you are paying.  The minimum 5% down payment will be based on the total of the purchase price and the renovation costs. Some examples of common improvements we see approved are kitchen & bathroom renos, basement development, new windows, new flooring, new roof or the addition of a garage to a property.

Once approved and you move in to the home, the funds for the renovation costs are held in trust at the lawyers office until the work is done. As soon as the renovations are complete, the receipts are brought to your lawyers and/or the bank may send an inspector out to confirm, and then the funds will be released to you or your contractor.

Break it down for me!

You have found a home with a purchase price of $400,000 that needs to have the following improvements to make it just perfect:  New Kitchen ($20,000), flooring ($5,000).  How much down payment do you need and what is the monthly payment based on today’s rates (5 year term at 3.49%)?

I can help you to finance the purchase of your home and also the upgrades needed to make your new home perfect!

No Down Payment?  No problem!

New RRSP Loan Program for 1st Time Home Buyers

Hoping to take advantage of the buyers market this spring but falling short on down payment funds? Traditional borrowed down payment options can be tough to qualify for and expensive. You’ve got to have perfect credit and be prepared to pay a premium on both your rate and default insurance fee to go this route. Perhaps you have already been declined by the bank – don’t fret,  there is another option.

I have a solution.

We are offering a program through one of our lending partners to help you save your down payment through an RRSP loan.

How does it work?

Call me. I can start an application to qualify  you for up to a $25,000 RRSP loan and start the mortgage preapproval process at the same time. Once approved,  you must wait a minimum  of 90 days before making an offer.  After this time you can then withdraw these funds as a down payment tax free through the First Time Home Buyers Program. 

Bonus! You have access to standard insurance premiums, qualifying guidelines, and best rates!  

Bonus! You get yourself into the spring market! 

 Bonus! You receive a 2018 personal tax adjustment! 

Call me anytime if you would like to chat further about this option or have any questions. It is always a pleasure hearing from you.