Monthly Archives: January 2018

Posted in Mortgages

It’s easy to get caught up in home buying frenzy and just focus on finding that perfect home. During all that excitement, be sure to take some time to get acquainted with a few key terms. Here are the four types of insurance you’ll encounter.

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HIGH-RATIO MORTGAGE INSURANCE
If your downpayment is between 5% and 20%, you are required to have “high-ratio mortgage insurance”. This insurance is there to protect the lender, and the premium is almost always added to your mortgage amount.

Example: Purchase price is $400,000 and you have 5% downpayment, for a total mortgage amount of $380,000. The mortgage insurance premium is 4% or $15,200, which is then added to your mortgage. The insurance premium declines at 10% and at 15% down. If you’ve saved up more than 20% of the purchase price, then you don’t need this insurance unless it’s required by the lender.

TITLE INSURANCE
Having “title” means you have legal ownership of property. Title insurance protects owners and their lenders against losses related to the property’s title or ownership, such as: unknown title defects, liens against the property’s title, encroachment issues, title fraud, survey errors, and other title-related issues that can affect your ability to sell, mortgage or lease your property in the future. Premiums are collected upon purchase and based on the value of the property.

HOME & PROPERTY INSURANCE
This must-have insurance protects against risks to your property and contents in the event of fire, theft and some weather damage; it also includes liability insurance in the event that someone is hurt on the insured property. Most lenders require proof of home insurance, so be sure to have your policy in place after your offer is accepted and before your closing date.

MORTGAGE LIFE INSURANCE
In the event of death, this insurance will pay the insured balance of the mortgage, discharge fees and prepayment penalties to the lender, and leaves the property with little or no mortgage for the surviving family or estate. There are many reasons to strongly consider this coverage because anything can happen at any age and at any time. Premiums are calculated based on age and the original mortgage balance.

Insurance can protect you and your family throughout your home ownership journey. If you are unsure about something, get in touch. I’m here to make sure your journey has a happy ending!

NEW 2018 MORTGAGE RULES
Conventional mortgages must qualify at the government benchmark rate (currently 5.14%), or your contract rate plus 2%, whichever is higher. Ask about strategies to get around the new rules!

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Bank of Canada increases benchmark rate

The Bank of Canada announced today that it is raising the overnight rate .25 per cent given a strong economy and despite the uncertainty surrounding NAFTA. The Bank noted that the Canadian and global economies continue to strengthen, but that NAFTA is a definite concern so they will be cautious about any future rate hikes. The next rate-setting day is Wednesday, March 7.

Homeowners with variable-rate mortgages will see their rate increase along with a possible modest payment increase. Lines of credit will be similarly affected. Get in touch if you have a variable-rate mortgage and have questions about your mortgage strategy and whether you should lock in or not. Or perhaps you need a new mortgage, are renewing, or are looking to refinance. If you have house shopping plans, be sure to get pre-approved now.

Given new rules that went into effect on January 1, it’s very important to work with an experienced professional who knows the right questions to ask to assess your situation and provide the direction you need to save money over the long term. Good advice early will save you a lot of time and stress!

We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.

Terms Posted Rates Our Rates
6 MONTHS 3.14% 3.10%
1 YEAR 3.04% 2.64%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.79%
4 YEARS 3.89% 2.94%
5 YEARS 5.14% 2.99%
7 YEARS 5.30% 3.69%
10 YEARS 6.10% 3.74%

Insured mortgage rates, subject to change. Conventional and refinance rates may be higher. OAC. E&EO

 

Prime Rate 3.20%
5 yr variable 2.30%

 

Crunch the numbers and explore different scenarios with our website calculators.

Book a no-obligation chat with me to discuss your mortgage options click here: https://calendly.com/ronlefebvre

New year. New rules. New chance to review your mortgage and wealth-building options. Get in touch for a review of your situation… Click here to schedule a quick chat: https://calendly.com/ronlefebvre

Mortgage rule changes that came into effect January 1 have made rates and qualifying much more complicated, which means it’s important to get in touch as early as possible when you have an upcoming financial need.

Are you thinking about buying another home (moving up or a second home)?

1.Be careful looking online for a “best” 5-year rate. Fact is, these days a “best rate quote” is meaningless, because mortgage pricing is now based on multiple factors. Everything depends on your personal situation.

2.If you have over 20% equity, you may want to consider a 30-year amortization mortgage. Benefits can be significant and outweigh any rate premium – more purchasing power, easier mortgage qualifying, and lower payments to boost cash flow or to allow you to divert cash to build a savings buffer or use for investing. Taking a variable-rate mortgage could also improve your mortgage qualifying, allowing you to lock in later.

3.While counter intuitive, lenders offer the best rates to borrowers who need mortgage insurance because they have less than 20% down. So even if you have more than 20% down and don’t need mortgage insurance, it may actually be worth purchasing. You’ll get a lower rate and better options at renewal. I can run the numbers and see if it makes sense for you.

4.If you are self-employed, get in touch early so I can advise you on what documentation and information you’ll need for building a strong case to present to lenders.
Do you have a large loan or a stubborn credit card balance that is eating away at your cash flow?

5.While refinancing may be more difficult for some, I have access to other financing options that can help you get your debt under control.

6.Always keep up good credit habits: pay your bills on time, never let your debt exceed more than 50% of your limit, and don’t be tempted to apply for store cards “to save on your purchase today”.

7.A home with a rental suite could help offset mortgage payments in the house you’re in.
Is your mortgage coming up for renewal within the next 12 months?

8.Lenders love insured mortgages. If you have one, let’s check out the competitive landscape at renewal. If you aren’t sure if your mortgage is insured or not, I can find out.

9.If your mortgage isn’t insured, we should definitely still look at your available options or I can help you renew with your lender and make sure you get the best deal.
And finally…

10.Do you want to pay off your mortgage early, or start that long wanted renovation? Wherever you are in your homeownership journey or whatever your need, a great conversation at any time can identify all the ways you can make it happen and save thousands of dollars.

New year. New rules. New chance to review your mortgage and wealth-building options. Get in touch for a review of your situation.

Click here to schedule a quick chat: https://calendly.com/ronlefebvre

Posted in Personal Finance

debt

TORONTO – Canadians are keen to lighten their debt loads in 2018, according to an annual opinion survey conducted for CIBC.

The Toronto-based bank says debt reduction or elimination was the top priority for 25 per cent of the poll respondents.

Paying bills or just getting by were the top goals for about 15 per cent of respondents.

By comparison, 13 per cent said their top priority was growing wealth or investments.

Lower on the list of financial goals were saving for a vacation (eight per cent), retirement (seven per cent), or for a house or renovation (six per cent).

Read more here