Why Use a Real Estate Broker?

October 21, 2018 by Andrew

Plan on buying a home soon? Did you know that there are plenty of ways that a real estate broker can help you achieve your goal by finding the best home that meets your needs, all while ensuring your peace of mind?

Below you find some of the main tasks a real estate broker performs for their clients that will be a buying a home:

Evaluate Your Needs

This will include the type of property you are looking for, what type of area or neighbourhood you want to live in, if you want a new home or one that might require some renovations be made to it, how many bathrooms and bedrooms you might want to have. Your real estate broker will help you identify which essential elements should be included in your future home.

With their in-depth knowledge of the market, your broker will help to ensure that your budget corresponds to the type of property you’re looking for and the neighbourhood you’re interested in. Your broker will also encourage you to get a pre-approved loan from your bank, this helps to speed up the buying process and makes you credible with sellers.

Give You Choices

Your broker will present you with properties that match what you are looking for. They help organize visits to these potential properties, as well as give you an honest opinion about each property. They can also provide you with various options that have not been considered. When you finally find a real winner, your broker will advise you on the strategy for submitting the promise to purchase.

Ask Questions For You

The broker will also attend the inspection of the home, ask questions and help you understand the inspection report on the property. Your broker will also follow-up on the fulfilment of conditions and act as an intermediary for the delivery of various documents, these can include bank drafts, etc.

Remember that if you do have any questions, your broker will answer them during the buying process. If you’re buying a condo, for example, they will analyze the essential documents with you, such as the minutes of condo meetings, the condo’s financial statements, etc.

When all the conditions have been met, your broker will accompany you to the notary for the signing of the documents that formalize the transaction.

As you can see from the above that your broker is involved at almost every step of the home buying process, why would you miss out on their guidance and expertise?

Things Not To Do Before Closing

October 21, 2018 by Andrew

You have worked to secure financing for your mortgage, you have a great rate and terms for it. Everything is good, all you must do is wait for advancement of funds.

Sometimes you might suffer a lapse in judgement when it comes to the closing the sale of your home. It is sometimes a stressful time when it comes to these types of events, especially if it is your first time purchasing a home.

A mortgage lender might suggest a simple course of action, however sometimes this is misinterpreted by the buyer. Here is a list of things you should NEVER do in the time between your financing complete date (when everything is setup and looks good) and your closing date (the day the lender advances funds).

Don’t do anything that would reduce your income

When it comes to your employment don’t do anything that would jeopardize your employment or income with your existing employer. Getting a raise is fine but dropping from Full Time to Part Time status is not a good idea. The reduced income will change your debt service ratios on your application and you might not qualify.

Do not close any credit accounts

Even if you realize that you never use a certain credit card, for example, cut it up if you must, but do not cancel that line of credit while you are waiting to close the purchase of your home.

Don’t apply for new credit

if you find yourself at shopping for new furniture and they want you to finance your purchase right now… don’t. By applying for new credit and taking out new credit, you can jeopardize your mortgage. It is best to wait until everything is finalized before going out and buying new furniture for the house.

Do not buy anything with your closing cost. Nothing.

This means not one thing. Yes, you might need a washer and dryer, but wait until you close to order it. Don’t take a salesperson’s word that they’ll just write it up and hold it for you, because somebody will enter it into the store’s computer by mistake. Typically, the lender wants to see you with 1.5% saved up to cover closing costs… this money is used to cover the expense of closing your mortgage.

Bridge Financing, What Is It?

September 22, 2018 by Andrew

Bridge Financing London, Ontario Mortgages

What is Bridge Financing?

It is a useful tool made available to borrowers when the closing date of the home they are purchasing is before the closing date of the home they are selling. This is generally common in a seller’s market, buyers often explore the idea of making a firm offer without conditions, even if they have their own house to sell.

Bridge Financing means that the lender is comfortable making an interim loan between the closing date of the new purchase and the closing date of the buyer’s own firm sale. Basically, it is closing the gap between the two firm closing dates that do not coincide.

Bridge financing is not the same as being able to carry two separate properties.

However, bridge financing is not applicable if your home is not sold firm, you are talking about carrying two properties (owning two homes). Carrying is when the buyer owns two homes simultaneously for any length of time. They are also qualified to carry the total sum of the two mortgages.

So, what is required to set up bridge financing? Your lender will ask you for a copy of your firm purchase agreement and firm sale agreement.

This is a great stress reliever and helps with leaving a buffer of time for the buyers to get settled into their new home before their own purchasers will show up on their previous home’s doorstep looking for a clean and empty property. This also give the buyer some flexibility when it comes to accepting an offer on their own home, that firms

Bridge financing is quite common and a wonderful option but its a conditional on your own home have a firm offer in place.

When it comes down to it, you should make it clear with your lender whether you are looking to mortgage two homes or bridge the gap between 2 firm sales before you firm up your financing.

Why The Best Mortgage Rate May Not Always Be The Lowest

September 22, 2018September 16, 2018 by Andrew

Just like when looking for a car, it isn’t always the best option to choose the cheapest one you find, it is the one that is best suited for you and your lifestyle. So just like when looking at mortgages, choosing the one with the lowest interest rates might not be the best option for you, as it could end up costing you more.

How can it cost me more?

One of the reasons why some of the interest rates are low, is that they come with restrictions and sometimes aren’t that flexible. While lenders can entice you with low fixed rates, they might be able to get that money back further down the road with penalties and fines if you were to adjust or change your mortgage. This is not an uncommon practice, similarly insurance companies do this by offering us less for insurance but charge us a higher deductible if something were to happen with our car.

Just like interest rates with additional features and flexibility, these can cost a bit more than a fixed, low interest rate. By paying a little bit extra in interest rates, you can have a little bit of breathing room when it comes to an unexpected change in events and you may need to change your mortgage.

Some Considerations

Here are some questions you should ask yourself when you consider locking in your next mortgage:

What if I need to refinance due to an unexpected job loss, break-up, unexpected home repairs, etc.?
Can I put extra money down to pay off the mortgage? If so, how much and when?
Are my closing dates flexible? What happens if they aren’t?
What if I move and sell my house before the mortgage is up?

So, what is the best rate?

Life is unpredictable! We may not be able to foresee our future, especially when signing our first mortgage. A no-frills, low-interest mortgage that can end up penalizing you for adjusting or breaking your mortgage can be devastating! The last thing you want is to be penalized a substantial amount on fees and penalties in unexpected charges.

We’ll sit down with you and go over your present situation, as well as discuss your future needs. We can go over all the options available and choose the best options that will suit your needs.

My Mortgage Application Was Denied, Now What?

August 12, 2018 by Andrew

Owning your home is not only a dream but a financial goal for many in Canada. However, factors like housing prices, interest rates, and new mortgage rules that came into effect have made it a little more difficult to get a home.

If you have recently had your mortgage application denied you may be wondering about some of the next steps you can take. Before you put your dream on hold, here are a few things to consider

Why was your mortgage application denied?

The first thing to consider after your mortgage application was denied, was why it was rejected in the first place. Your credit report or credit history may be one of the reasons. A low credit score can sometimes act as a warning sign to your lender. It would be a good idea to check your credit report to see whether it is accurate and then get to work on improving that credit score.

Proof of income might be another reason why you may not get that mortgage. For those that are self-employed or business owners, it may be a little more difficult to get approved for a mortgage, as lenders most often associate them with unpredictable income and are a higher risk.

The amount of debt you have can also affect your ability to get approved. Lenders will look at something called your debt service ratio when considering your mortgage application. Your Total Debt Service Ratio (TDS) is calculated by adding your family’s monthly mortgage payments, property taxes, and other debt payments, then dividing it by your family’s gross monthly income.

Is it really time to buy?

If your mortgage application was denied and you have considered the reasoning behind it, it is probably a good idea to double check to see if it is an appropriate time to buy a home. If right now you find that you have a lot of debt and are having difficulty paying some bills on time, it may be worth it to pay off some of that debt and set up a budget to put towards your home purchase. If you have however gone through your finances and figured that right now is a good time to buy, you can consider other available options.

What other options are available?

It is a big misconception when it comes to big banks and mortgage loans. There are other lenders available. Not only are there other lenders out there, some of them include: mortgage companies, insurance companies, trust companies, loan companies and credit unions.

Mortgage Brokers can help

If your application was denied, an experienced mortgage broker can work with you to help determine if it is indeed a good time for you to buy a home. They can help investigate some of the alternative options available Mortgage brokers negotiate on your behalf and have relationships with various lenders. Meaning a mortgage broker can help get you approved, even if your first application was denied.

5 Important Tips for First-time Home Buyers

August 8, 2018 by Andrew

The cost of buying a home is the biggest investment you will ever make. Buying a home is one of the biggest decisions you will ever make. It can also be a bit complex, especially if you don’t know what to expect. The rising home values and stricter guidelines can also make it difficult for first-time buyers. From mortgages to tax credits, here are some tips to consider if you are a first-time homebuyer.

1) Research the area and the market

Most people looking to buy a home know which neighbourhood or community they would like to live in. Unfortunately, it isn’t really a practical option when it comes to a value-cost perspective. While you are looking at the neighbourhood it is great to check out the local amenities, quality of the neighbourhood and consider what the travel to and from work will be like. Research the area thoroughly and decide what the right compromise might be, given your lifestyle, budget and needs.

2) Work with a broker

Fewer Canadians are going straight to their bank. Instead they are heading to mortgage brokers for a better set of options that are available. There are more than just the five major banks when it comes to the mortgage industry and there is a good chance that a smaller lender will provide you with a better rate. Brokers work on your behalf and look through the market for the best rate for your situation, this isn’t always possible when using a bank.

3) Make use of government programs

There are several first-time buyer governments grants available to help make your home buying experience easier. The Homebuyers Plan allows you to purchase your first home with as little as a 5% down payment. This is a great opportunity to become a homebuyer and start building equity at a younger age. The RRSP homebuyers’ plan also allows you to withdraw up to $25,000 from your RRSP account to buy or build a qualifying home.

4) Don’t feel rushed

Certain markets can create a sense of urgency to buy a home, one that may not even meet your criteria. While it is important to have a sense of purpose when buying a home, there will always be new listings popping up each and everyday. If you set your criteria wide enough, you’ll be sure to find something that suits your needs in a reasonable time frame.

5) Calculate all the costs of homeownership

In addition to your mortgage payment, you also need to factor utilities (heat, hydro and gas), insurance and property tax. When it comes to closing costs, there are also costs associated with buying a home, luckily first-time buyers in Canada save the Land Transfer Tax and get a nice tax refund.

Breaking Your Mortgage Early

August 7, 2018 by Andrew

Sure, it started out great, it got you the home you dreamed of and met your financial needs… back then. But things have changed, now you are probably looking to start a brand-new mortgage and end this one.

Why break it?

Mortgage break ups can happen for a variety of reasons. Life changes, things happen in your life, maybe you need a bigger home to accommodate your growing family? Maybe you need to move for your new job (which is in a new city). These are some common reasons why people may need to break their mortgage before the five years are up. A decrease in interest rates, while giving you the ability to save some money is also another common reason to break your mortgage early.

Why you may want to break it

When interest rates drop, it may be tempting to see what other options are out there for your mortgage. A lower interest rate means that your mortgage payments will be reduced each month and you’ll save money in the long-run. On the opposite end though, if you do stay with your mortgage you may be able to pay off your mortgage earlier.

You should be careful when you are looking at your options. There are some qualified professionals to go to (like myself) that can help you determine which route you may want to go. It is important that you are aware of the negative impacts of breaking your mortgage early. there are penalties and fees attached when you decide to break your mortgage contract that could mean that you end up not saving any money at all. Don’t forget that you may now need to pass the new mortgage ‘stress test’ to qualify for a new mortgage.

So, what happens when you decide to break your mortgage early?

So, you decided it is time to break your mortgage. Typically, penalties for breaking a mortgage agreement vary depending on the type of mortgage and the type of lender. In many cases, a smaller lender and a variable mortgage have lower penalty fees that bigger lenders and fixed-rate mortgages.

When it comes to paying the penalty, the penalty amount you will need to pay is calculated using something called an interest rate differential. You’ll likely end up paying the interest for the remainder of the term on the remaining balance, or the amount of three months’ interest on the remaining balance – whichever is greater.

Still unsure about if you should break your mortgage? Contact me today and I will go over all the options you have!

What’s The Deal? Needing an Appraisal with 20% Down Payment

April 1, 2021July 28, 2018 by Andrew

I’m Andrew Young of Mortgage Wise Financial and Community Mortgage Movement.

What’s the deal with Needing An Appraisal When You Have 20% Down?

To begin with, an appraisal is an unbiased estimate of the value of a home you want to buy or already own by a third party appraiser. It is basically an analysis of recently sold properties, active properties, terminated properties, and expired properties around your area to determine the value of your home right now. Most lenders will consider recent within the last 30 days. A lot of people ask me “Why do the lenders need an appraisal when I have 20% down or more?” This a real easy question to answer. When you have less than 20% down for a down payment, a lender has to go to CMHC, Canada Guarantee, or Genworth to get third party insurance. This then means that the onus is on the insurance company if you were to default on your mortgage. When you have 20% down or more, this means that the onus is on the lender itself. Therefore the lender wants to make sure that the value for the home, if the worst-case scenario were to happen (you were to default on your insurance). They have to go in, take the home and then sell it again on the market. This is why you need an appraisal, even if you are paying 20% or more for your down payment I’m Andrew Young and that’s the deal.

What’s The Deal? Winning

May 5, 2021July 18, 2018 by Andrew

I’m Andrew Young of Mortgage Wise Financial and Community Mortgage Movement.

What’s the deal with Winning?

I am proud to announce that Mortgage Wise Financial is the recipient of the 2018 Canadian Mortgage Award for Top Brokerage in Canada with fewer than 25 employees!

Don’t believe me? Head over to http://canadianmortgageawards.com/winners-finalists/2018-winners-finalists for a full list of the finalists.

the Canadian Mortgage Awards (CMA) celebrates excellence across the entire spectrum of mortgage brokering in Canada and continues to be the leading independent awards event for the mortgage industry. 21 prestigious industry awards are designed to ensure national recognition for large and small organizations and individual mortgage professionals.

Winning a CMA is a career-defining moment!

I can’t tell you how truly proud I am of my entire team at Mortgage Wise Financial, from the brokers to the agents, to the administrative staff. Everyone is so incredible! I also have to thank the Realtors, the Insurance Agents, the lawyers, everybody that is and has supported us in what we do throughout the years. We really want to thank you and for all being part of something very special!

I would also like to thank the award committee and everyone that voted for us and lastly thank you to whomever nominated us, we really appreciate the opportunity!

I’m Andrew Young and this is awesome award! That’s the deal with winning!

What’s The Deal? Community Mortgage Movement

June 2, 2023July 3, 2018 by Andrew

I’m Andrew Young of Mortgage Wise Financial and Community Mortgage Movement.

What’s the deal with Community Mortgage Movement?

I originally started the Community Mortgage Movement back in 2016 as a passion project. The whole point of the organization is to give back to the community that has helped to make me who I am today.

With every deal that I do through Mortgage Wise Financial, a portion of the proceeds go back into the community. This is done in two different ways: 1) this is my family foundation, which is through the London Community Foundation and is given in the form of an endowment. For those unaware what an endowment is, it is a fund that is a receptacle for gifts given in perpetuity. The capital of the endowment remains untouched, and only the income from the fund is used for ongoing programs and services.

2) The Community Mortgage Movement has chosen six charities, these charities have been screened and vetted by us to make sure that every single dollar that is donated is going towards someone who is in need. We piggy back on the Vital Signs report, which is released by the London Community Foundation and is released every 2 years. This report helps to identify and fund the greatest impact that will help the London, Ontario community.

When we first started in 2016, we were very successful and were able to give back $10,000 to charities within the London, Ontario community. In 2017, we were able to give back $15,000 and are goal for this year is to give back $20-25,000.

How Can You Help?

You can refer any of your friends, family, colleagues, and neighbours. Not only will they get incredible rates, competitive products, and at the end of the day they are helping out the community they are investing in.

Thank you again for helping to make Community Mortgage Movement so successful.

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