London Housing

Why Use a Real Estate Broker?

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Why You should Use a Real Estate Broker

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?

Bridge Financing, What Is It?

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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.

5 Important Tips for First-time Home Buyers

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first time home buyer tips

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.

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

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Need An appraisal with 20% Down Vlog

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? Community Mortgage Movement

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Community Mortgage Movement

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.

To learn more about our products and services visit our website

What’s The Deal? – Bloopers

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What's The Deal Bloopers

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!

Self Employed & Looking For A Mortgage?

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Self Employed London Ontario

What’s the deal with being self employed?

I’m Andrew Young from Community Mortgage Movement and Mortgage Wise financial here to talk to you about being self employed and getting a mortgage if you are self employed.

So, you’re self employed? Well congratulations! So now you want to purchase a home – so, what do you need when it comes to looking for lenders?

Most lenders generally want to see at least 2 years minimum self employed or sub contracted income. When it comes to income, lenders will use a 2-year average from your line 150 from your T1 Generals or your Notices of Assessments. Don’t worry there are some opportunities when it comes to grossing up your income by a certain percentage or we also can add back some of the expenses to help get you to the mortgage amount you are looking for.

There is also the opportunity to use the Stated Income Mortgage Program. What is the Stated Income Program? Stated Income means exactly that. When a mortgage application is created, for a self-employed or commissioned applicant, and the entire income amount is not verifiable in traditional documents, for example a Notice of Assessment, the applicant may apply under the Stated Income program to allow an income adjustment to help qualify them for a home purchase or re-finance.

So, using the Stated Mortgage Program we take your stated income and inflate it by a reasonable rate to take into consideration, due to your profession (this is to consider your expenses and cash components of your job). All of this is to help make sure we can get you to the mortgage you want to be approved for.

I’m Andrew Young and that’s the deal!

A & B Lenders and Private Mortgages

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A & B Lenders

Andrew Young from Community Mortgage Movement here. What’s the deal with A & B Lenders and Private Mortgages?

Today we are going to be going over what is an A Lender, B Lender and a Private Mortgage. But first here is a little more info on what mortgage agents and mortgage brokers do. I myself am a mortgage broker and can not only deliver a lot of different options and a lot of choices because we deal with different types of lenders. So, what’s the deal with these lenders?

A Lenders:

Also known as traditional lenders, refer to banks or credit unions that traditionally cater to customers with good credit scores and have a reliable income – These are considered “A” Clientele.

Institutions servicing an “A” clientele include Canada’s major banks — e.g., BMO, CIBC, National Bank of Canada, Scotiabank, RBC, and TD. These banks are subject to federal regulation, which means that you’ll be stress tested when you apply for a mortgage.

B Lenders:
These institutions offer a lower barrier of entry to qualifying for their products but can offset that with higher interest rates. In short, they cater to people who may not qualify for say, a mortgage or a credit card at one of Canada’s six big banks, because they lack either a strong credit history, or a guaranteed income (recent immigrants, or the self employed, for instance).

Private Lenders:

These are the lenders that can help fill the gaps between the A & B lenders. These lenders are not just for people in a really bad financial situation, it could also be for people who are looking to build something that is a little more unique, as the banks might not understand or the banks don’t have the hunger for.

Mortgage Rates and Why They Rise and Fall

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Mortgage Rates Rise and Fall

There are many factors that influence the overall health of the Canadian economy; unemployment, inflation, consumer confidence and the housing market, just to name a small few.

 

Factors affecting the Fixed Mortgage Rates

 

One of the main factors that affects fixed mortgage rates is the Government of Canada Bond Yields. Fixed mortgage rates normally move in alignment with the Government of Canada Bond Yields.

 

Bond Prices and Bond Yields

There is a negative relationship between bond yields and the price of bonds. Meaning that when bond prices increase, the bond yields decrease and when bond prices decreases, the bond yield increases. Bonds are historically safer than stocks, especially Government issued bonds and due to this bond prices for Government bonds decrease when the market is booming and increase when the market is dipping

 

Bond Yields and fixed rates generally have a positive relationship. Meaning that when bond yields increase, fixed rate also increases.

 

Stock Market

When the Stock Market is booming, investors are more likely to make a higher return on investment equities than investing in bonds. This means that the demand for bonds decreases and as such the bond price decreases and the bond yield increases and this will lead to an increase in the fixed rate. On the other hand, when the stock market is dipping, and stocks do not look as enticing, investors are more likely to invest in safer investments, such as bonds. As such the fixed rate will likely decrease due to the price of bonds increasing, the demand for bonds increasing and the yield of bonds decreases.

 

Factors affecting the Variable Mortgage Rates

 

The bank of Canada is responsible for changes to variable mortgage rates because they determine the target overnight lending rate.

 

Variable Rates and Overnight Rate

The overnight rate changes the cost of lending/borrowing short term funds and therefore influences the prime rate. Meaning when the prime rate goes up, so will your variable rate and monthly payments, as prime rates are linked to variable mortgage rates.

 

Prime -/+

Variable mortgage rates are normally advertised as Prime plus or minus (insert rate here), which means the interest you pay is directly related to the Prime Rate and will fluctuate whenever these change. Let’s say the current overnight rate is 0.5% and the major banks prime rate is 2%, and at that time the variable mortgage rate is – 0.50% (thus 1.5%). If the Bank of Canada increases the overnight rate from 0.5% to 0.75% (an increase of 0.25%), the banks will likely follow suit and increase their prime rate by the same 0.25% to 2.25%. Your variable mortgage rate will thus also change due to this increase in the prime rate, making your new variable mortgage rate 2.75% – 0.50% = 1.75%.

Down Payment and the Next Steps

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Down Payment

So, you’ve finally got the money the need to make a down payment on your house, congrats! So, what are some of the next steps in this process?

 

Confirm the details

 

To fulfill the conditions of your mortgage approval, you’ll need to document almost everything you do. This is required by all lenders to ensure that you are not borrowing against your down payment and to help protect against fraud.

 

Here’s what you will need:

 

A 3 Month History

You will need a 3-month history of any bank accounts that you have been using to get your down payment. One of the most important parts of this is that your name is linked to the account, as some printouts do not show a name. Talk to your mortgage advisor about this if you have any concerns

 

If You Had Large Deposits

If you had any large deposits within the last 3 months, you will need to show where they came from. An example of this might be if you sold a car, make sure to keep the bill of sale or if you transferred money into the account, make sure to bring the records.

 

If It Is a Gift

Gifted funds can only come from immediate family members (parents, grandparents, siblings). There must also be a signed gift letter and a bank statement from the giver to verify the funds.

 

If You are using money from your RRSP

If you are withdrawing under the Home Buyer’s Plan, the funds must have been in the account for 90 days.  Also make sure you budget enough time (about 30 days) to make sure your funds can be transferred out in time. You will also need to show a 3-month history of your RRSP

 

If You are Getting money from Outside of Canada

It is important to get the money into the country at least 30 days before funding. Some lenders might ask that the money must have been in a Canadian account for more than 90 days, so make sure to ask about this early!

 

Regularly Deposit Cash into Your Accounts

As stated above lenders do not like to see giant deposits into your accounts and they especially don’t want to hear that you’ve been stockpiling your money and not depositing it into a bank.

 

If the Down payment is coming from the sale of your existing house

It is important to provide a firm purchase and sale agreement, and the current mortgage statement. Some lenders will also ask for the real estate lawyer’s letter of disbursements, to see how the proceeds of the sale will be divided up.