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.

Mortgages and Entrepreneurs

September 29, 2018September 27, 2018 by Andrew

When we are talking about mortgages, most of us assume it is about families and having a stable income that can pay off the mortgage after a certain time. What is rarely talked about is mortgages and entrepreneurs and their plans; as we know being self-employed means your salary can vary monthly, versus being an employee at a company with stable pay.

Back in July of this year, the CMHC announced the implementation of new mortgage lending rules designed to help the self-employed secure mortgages and maintain their position in Canada’s housing market. This will all take effect on the 1st of October this calendar year!

Self-employed Canadians have faced many obstacles when trying to obtain loans, primarily due to their variability of incomes. Since those that are self-employed are not on a payroll, lenders required a more rigorous proof of income, including but not limited to requiring at least two years of proof of income, audited financial statements, a good credit history, regular and stable patterns of income, and a large deposit for the home they are seeking to purchase. Sounds complicated, right?

One of the most difficult barriers to overcome in securing a mortgage is the very reasonable inclination of a small business owner (and their accountant) to do everything legally possible to reduce taxable income to reduce the amount of tax paid by the self-employed. In the case of obtaining a mortgage, the self-employed ideally needs to demonstrate the largest possible income to help to secure a loan. The two purposes are conflicting, with no clear solution.

To address the inequities and difficulties faced by the self-employed, the CMHC has proposed the introduction of several new, more flexible factors that can be used by lenders to assess the mortgage application of a self-employed person. Lending institutions will now be able to include factors such as enough cash reserves, the acquisition of an established business, and their training, education, and previous employment experience, including for businesses that have been operating for less than two years.

With these new changes, these will greatly assist not only self-employed Canadians, who according to the CMHC represent 15 percent of the workforce, also young entrepreneurs seeking to enter the housing market for the first time.

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.

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? 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? – Bloopers

June 2, 2023June 13, 2018 by Andrew

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

And what’s the deal with my inability to get my lines right?

Here is the deal, I can’t always get my lines right or joke around in between takes. Here are some of the bloopers while filming. While working on these videos I have compiled some footage of me forgetting some of my lines, playing around with “what’s the deal” and trying to figure out which one would work best.

Looking for help with refinancing or renewing your mortgage? Feel free to reach out and I’ll make sure I find an option that is suitable for you and your needs!

For those of you who don’t know me, I am a leader in the mortgage industry and in the London, Ontario community. Not only do I help with finding a suitable solution to my clients needs I also help with supporting the London, Ontario Community. I am involved in several London, Ontario not for profits and on multiple boards and committees in the London, Ontario and surrounding areas.

Myself and Community Mortgage Movement is a group of caring and compassionate advocates who are creating a cooperative approach to funding community initiatives. Not only do I want to help grow the London, Ontario community, I want to help develop sustainable funding to support local businesses and community partners.

For your viewing pleasure, I’m Andrew Young and that’s the deal!

What’s The Deal? Low-rate Mortgage Offers

June 2, 2023June 11, 2018 by Andrew

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

What’s the deal with super low-rate mortgage offers?

I just want to go over a few different things before you lock yourself into something you don’t really want or something you don’t really need. What I want you to understand is what are you sacrificing to get a very low interest rate? Here are a couple things you should watch out for on low-rate mortgage offers.

Low-rate Basic Mortgages

These are low-rate mortgages that sometimes may include a reinvestment fee. A low rate basic mortgage will offer you an unbelievably low interest rate. So, what are you sacrificing with this type of mortgage? One of the main things you are giving up is your flexibility. Let’s say you were to break your mortgage after the first five years, there is generally a percentage of a penalty you will pay. So, if you break your mortgage early, you will generally have to pay a penalty (this is normally around 3%). These mortgages need to make their money somewhere! So, let’s say you have a mortgage of $400,000 that is a $12,000 penalty fee!

Reinvestment Fee

Some lenders are adding reinvestment fees into their mortgages. Some of the mortgages that we have seen here have these reinvestment fees added into their mortgage, they have a gradual decline over the five-year period, some dropping by .25% each year. If you are 99% percent sure that you are going to stay at this property for five years it might be worth it to just wait it out, if not you should start considering other options.

What I like to do is a suitability analysis. We try not to sell rates as much as possible, I would prefer to find out what you need first before I come up with a solution.

I’m Andrew Young and that’s the deal!

What’s The Deal? The Posted Rate Hike

June 11, 2018 by Andrew

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

What’s the deal with the recent posted rake hike?

So, what is a posted rate? Well posted rates have been around since before I was born. The posted rate is an intricate sales tactic to lure you into a bank. Back in the day you would walk into a bank and you would see a posted rate on one of their walls. Following that you would then move into an office and talk with the banks’ mortgage specialist. They would then offer you a discounted rate (because you are such a good customer). Let’s say the posted rate is 6% and because you are such a “great” client, they give you a rate of 4.5%.

One of the reasons why a posted rate exists still is to help calculate a penalty. Higher posted rates equal higher penalties. So, what the banks are trying to do is eliminate those people who are trying to secure lower interest rates in going elsewhere. This is a problem with a lot of the banks nowadays, as there are some better variable rate mortgages available elsewhere. So, in short, a lot of people are now leaving banks to go chase a better rate. Therefore, the major banks are increasing their posted rate.

A lot of the lenders (non-banks) that we work with don’t use the traditional bank way of coming up with penalties. Instead they use their regular rates also known as straight rates or discounted rates. It could be advantageous for you to deal with a monoline lender, rather than a major bank. Another interesting fact is that banks do deal with brokers, but these are deals through different channels.

Now is the best time to have a look at your mortgage and make sure it is the best mortgage for you. I’m always here to help.

I’m Andrew Young and that’s the deal!