A peek behind deeply discounted 5-year rates.

24 Jan

When considering a deeply discounted 5-year rate, keep in mind that cheapest isn’t always best. Strangely, we know that’s true when we’re shopping for anything else – but we still tend to believe that lowest rate is the one and only factor in choosing a mortgage. But, that low-rate mortgage could actually cost you more in the long run.

An amazing cut-rate mortgage could have you locked in to a very rigid contract filled with financial “trip lines” that could work against you down the road. That’s why it’s important to check the fine print. For instance, is the mortgage fully closed? That means you’re not leaving the lender unless you sell your house, so your options are limited and you have no negotiating power if your needs change in the next 5 years. Low or no prepayments: means you have no or limited ability to chip away at your principal to reduce your overall cost. Maximum 25-year amortization can take away flexibility you may need later. Many prudent homeowners take a 30-year amortization but set their payments higher using a 25-year or lower amortization. This gives them the option to reduce their payments should an emergency arise or a special need like maternity leave. For first-time buyers too, a 25-year amortization means higher payments than a 30-year amortization and could limit their entry into the market.

Spot a deeply discounted 5-year rate? Talk to us first. We’ll always help you find the right combination of low rate with the options you need to achieve your goals for homeownership and the financial future you want.

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Mortgage Options for Self Employed

10 Jan

Are you self employed and does your accountant do too good of a job writing off income? We all want to pay less income tax and that is one of the reasons we employ accountants. They can work their magic so a good portion of self employed earnings are written off against eligible expenses. This is awesome! But where this practice can get tricky is when you go to your bank and want to borrow money to purchase or refinance a home. They tell you that you don’t show enough earnings on your tax return to qualify for a mortgage.

The government has tightened up policy on mortgage qualifications for self employed recently as well, making it harder than ever to qualify. No more 5% down payment, self employed individuals must have 10% down now in order to take advantage of a self employed program. No more automatic approvals if you simply prove self employment and have a good credit score. Things are a little more difficult and involved, but we at Invis can help.

There are still options available to help self employed individuals obtain mortgages. If you need help finding a mortgage due to self employment or hard to prove income, call us at Invis West Coast Mortgages for a no obligation consultation. We can find the right program with the right lender for you. These programs are still out there even though there has been some changes, we know where to look! Call us today!

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Looking for long term security with your mortgage rate?

6 Jan

If you are thinking about where mortgage rates will be in the future and are considering locking in, there are some really good 7 and 10 year rates available right now.  These are a good consideration if you are planning to keep your home long term and want stability. We have a 7 year fixed term available at 3.99% and a 10 year fixed term at 4.49%. These are worth considering for risk averse clients. If plans change mid term and you sell or refinance, porting the rate is always an option.

Call us at Invis West Coast Mortgages for more information and a no obligation consultation to see if these options can be of benefit to you.  We are here to help!

 

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Bank of Canada Rate Stays Put

7 Dec

Canada’s key interest rate will end 2011 unchanged.

In as statement, the Bank said European economic performance will be worse than expected, Canadian and U.S. growth are “slightly” better than expected and inflation will “ease”.

It added: “With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary stimulus in Canada.

Economists are saying that they don’t sense much of a change in the Bank of Canada’s overall view.

The bond market, which leads fixed mortgage rates, apparently agrees. Yields changed very little in reaction to the Bank of Canada’s decision.

The next Bank of Canada’s rate meeting is January 17, 2012.  So status quo for now!

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Financial Comfort and Joy.

2 Dec

In a few weeks we’ll be in full gear getting ready for the holiday season. But before you begin your holiday baking, or get started on your holiday shopping list, here’s a tip for enjoying real financial comfort and joy this festive season: do a holiday debt-check!

Why do a debt-check just when you’re getting excited about the holidays? Well….that excitement is the reason you want to have a cool, intelligent appraisal of your financial situation. It’s tempting to overspend at this time of year. That’s why so many Canadians suffer from “plastic shock” when their credit card bills arrive in January.

Do a quick assessment. Are you carrying too much credit card or other high interest debt right now? Do you have a fund set aside for holiday shopping? Are you struggling to keep up with your monthly obligations? If you answered “yes” to any of the above, it’s worth having a conversation about streamlining your finances before the holidays are upon us.

We have access to some great rates right now, and can help set you up with a smart plan with sensible payments, and smooth sailing through the hectic holidays and into the new year.

Worried that your locked-in mortgage means your options are limited? We can do a quick check – there’s a good chance the savings each month will far outweigh any penalties.  Here’s one client example:

Joe’s mortgage, car loan and credit cards totalled $225,000. We helped Joe roll that debt into a new $233,000 mortgage, and even paid a fee to break the existing mortgage. But look at the payoff:

Today:  Mortgage        $175,000             @ $969 per month

                 Car loan           $  25,000              @$495 per month

                 Credit cards    $  25,000              @$655 per month

                 Total                                                          $2,119 per month                        

New Monthly Payments on new $233,000 mortgage: $1,176.00 per month.

That’s $943 less each month – a huge improvement in cash flow! Joe’s planning to put tax returns and holiday bonuses against his mortgage principal – and he’ll be out of debt well before his original timeline – with some real peace of mind about his finances.

Give us a call. We love to help at this time of year. Financial comfort and joy: that could be one of your best gifts!

*4.5% current mortgage, 3.6% new mortgage, 25 year amortization. Credit cards 19.5% and car loan 7%, both at 5 year amortization. OAC. Subject to change. For illustration purposes only.

 

                                                          

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Buy and renovate for the perfect abode with a mortgage for fixer uppers!

19 Nov

Many homebuyers looking at older properties find themselves in a common predicament: they’ve found a property that suits them, but it needs some costly and immediate upgrades.

Many buyers add the costs of those immediate renovations into their mortgage, instead of racking up credit card bills or selling investments to pay for the upgrades. Known as a “purchase plus improvements” mortgage, this type of mortgage covers the sale price of the home, plus any renovations that would increase the value of the property , with as little as 5 per cent down.

If you’re buying a home but want to add a second storey, finish a basement or redo a kitchen, it can make a lot of sense to add those costs to your mortgage. That way you can spread your payments over the life of the mortgage and have a cost-effective way to get your dream home. You can also use your pre-payment privileges to pay the renovation off faster. The process is quite simple:

Obtain cost estimates for the upgrades.  Once you have found a home, you need to get detailed written quotes from licensed contractors on the renovations you plan, outlining the scope and all costs.

Get your appraisal.  An appraisal with two separate values will sometimes be required: first the value of the property “as is” and the estimated value of the property once the improvements are completed. Discuss this step with your mortgage consultant as it is not always necessary.

Renovation costs are included in your mortgage. Your lender will add the estimated costs of the renovation into your mortgage. For example, with a 5% down payment, your mortgage broker would apply for 95% of the “as improved” market value, which will be higher than the actual purchase price. The committed amount of the mortgage will be advanced to your solicitor, who will be instructed to hold back the renovation funds until the work has been completed and inspected.

Complete your upgrades; funds are released upon completion. Once an inspection from an appraiser confirms all work is complete and a copy of the building permit (if applicable) has been received, the balance of the mortgage funds will be released to you to pay for the renovations. Depending on the lender, you may also be asked to provide copies of receipts and invoices for the work done. There are a few options for carrying your expenditures until the funds can be released. Some major home improvement retailers offer “no payment” options for up to six months.Larger contractors may also be willing to finance the project short-term if they see the documentation for purchase plus improvements financing.

Example:

Purchase price:  $400,000

Improvements:  $40,000

Total mortgage:  $418,000 (95% of $440,000)

$378,000 will be released on closing date. $40,000 will be released upon completion of improvements i.e. improvements are 100% complete and a final inspection has taken place.

Be sure to consult with a mortgage professional to learn about the full range of options available to you when purchasing a fixer upper.

 

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Is it time for flight to safety with your mortgage?

31 Oct

If you have a variable rate mortgage and have been thinking about locking in to a fixed rate, now might be the time. The Bank of Canada rate is remaining stable but lenders are shrinking the discounts off of prime, with some lenders now adding a premium onto prime.  So variable mortgages are not as attractive as they once were especially when you look at where fixed rates are in comparison. Variable rates are now somewhere between prime minus .40 and prime plus .10 depending on the lender.  Five year fixed rates are now from 3.39% to 3.59% depending on lender.  Not a huge difference anymore, making the fixed rates attractive.  If you look at a 4 year term, it even gets more attractive. 

We are starting to get the vibes that increases to fixed rates are imminent. I know, I know we have heard that before! But this time it really does appear to be happening. The Canadian economy is starting to heat up and with bond yields increasing, rates could go up. What this tells us is that now is a good time to have a look at your situation and review it to see if making a change is in your best interest.

Clients who currently have a really good rate on their variable in the 2.25% range will have an increase in their monthly payment. The age old question is whether you will end up saving money in the long run. Variable rate mortgages are expected to stay at the same level until mid 2012. By that time we anticipate that fixed rates will have increased.

For a mortgage review and check up, give us a call at Invis West Coast Mortgages, we are here to help.

 

 

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Are you a first time home buyer….?

26 Oct

Buying your own home will likely be the largest financial decision you will ever make. But there is no reason to be intimidated. Your Invis Mortgage Consultant can guide you through each step of the way so you can acheive your goal of home ownership.

The process can be broken down into several steps and will often engage you with several professional services. But before you start you need to determine what you can afford to buy. This is where your Mortgage Consultant can help quide you through the entire process.

Step 1: Mortgage Pre-Approval – Your first meeting with your Invis Mortgage Consultant will help you understand the many possibilities for down payments and mortgage loan options. After that meeting you will have a better understanding of what your down payment, interest rates, and monthly payments look like. We will provide a rate guarantee that is good for 120 days, so you are protected should rates increase. You will know the price range before you start shopping for a home.

Step 2: Selecting your home - Choosing the right Realtor can make a big difference. Your Realtor will help you find a property that best suits your needs and will ensure any contract to purchase protects you. Expert guidance is crucial here and if you have not chosen a Realtor already your Invis Mortgage Consultant can be a good referral source.

Step 3: Mortgage Application -  Once you have found your home and signed a contract to purchase you will work with your Invis Mortgage Consultant to remove any financing conditions and secure your best mortgage. If you have not already provided income and down payment confirmation, we will require at this time.

Step 4: Subject Removal – This happens once you have received confirmation that your mortgage is unconditionally approved. Your Invis Mortgage Consultant will guide you seamlessly through this process. The other subjects, such as inspections are removed once you get approval from these experts.

Step 5: Legal Documentation – This stage transfers the title of the property and registers the mortgage for the lender. You are now a homeowner. Your Invis Mortgage Consultant will arrange for documents and instructions to be sent to your lawyer or notary. You will then meet with them to finalize all parts of the transaction. The solicitor will handle the monetary transaction and the filing of the documents with the Land Titles Office. If you do not have a solicitor in mind, again your Invis Mortgage Consultant can be a great referral source.

Your Invis Mortgage Consultant is an expert at residential and commercial mortgages. Mortgages, lines of credit and their associated products are all we do. Your consultant will be there from the beginning to the end of the process. They are someone you can count on to get you through each step of the process and they will be there for you throughout your entire borrowing life time.

We are here to help. Contact us at Invis West Coast Mortgages at our office located on Cliffe Ave in Courtenay.

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Legal fees waived on CHIP reverse mortgages

19 Oct

CHIP is waiving legal fees on reverse mortgages applied for before Nov 30/11 and closed by Dec 31/11. You can save up to $1,495.00 on legal fees, closing costs and administrative fees which is a substantial savings.

A reverse mortgage unlocks the value in your home and lets you enjoy your retirement on your terms. You can receive up to 50% of the value of the home with no payments necessary as long as you own the home. These mortgages are available for clients age 55 and over. The amount you could potentially receive is based on your age, your location, type of home and the appraised value of the home.

You can choose how you want to receive the money. You have the option of receiving all of the money in one lump sum or you can take some now and more later. Funds are tax free and not added to taxable income, so it doesn’t affect your Old Age Security pension (OAS) or Guaranteed Income Supplement (GIS).

You can use the money any way you wish.  Invest it and supplement your monthly income, spend it on home renovations, take a trip, buy a car, it doesn’t matter.  If you are selling your current home and purchasing that patio home you always wanted for instance and are short a little to buy the home of your dreams, you can get a reverse mortgage for the difference.  Use it any way you would like.

For more information on reverse mortgages, call us at Invis West Coast Mortgages, we are here to help.

 

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Understanding your Credit Report and Credit Score

6 Oct

If you have ever taken out a loan, used a credit card or taken advantage of a “buy now, pay later” offer, you will have a credit history.

Whenever a financial institution, such as a bank, a credit card company, or any other business gives you credit, it may send information about whether or not you make your payments on time to a credit-reporting agency. Credit-reporting agencies, also known as credit bureaus, are businesses that collect information about you and how long it takes you to pay back money you have borrowed. This information is called your “credit history“. When you want to borrow money in the future,the lender will check with a credit-reporting agency to see if you have a good credit history.

Having a good credit history is very important. If your credit history is poor, a lender can refuse to give you a loan. You may not be able to get a mortgage to buy a new house, or take out a personal loan. Lenders that may grant the loan may require you to pay a higher interest rate.

Your credit history is recorded by at least one of Canada’s two major credit-reporting agencies: Equifax and TransUnion. A credit report is a “snapshot” of your credit history. It is one of the main tools lenders use to decide whether or not to give you credit.

You have the right to see your credit report. No one else can have access to the information unless you allow it. When you apply for a loan or credit card, you are allowing the organization that is giving you credit to check your credit history.

Your credit report contains information about your past and present personal and financial situation. It contains personal information such as name, current and previous address(es), social insurance number, telephone number, date of birth and your current and previous employer(s).

It contains credit information related to any credit you may already have, such as a credit or retail card, a line of credit, a loan or a mortgage.

Banking information such as accounts you have including any NSF (non sufficient funds) information may be reported.

Any public records such as a bankruptcy or a credit-related court judgment against you will be reported.

It will show collection information as well. If you ever had a debt that you could not pay and it was referred to a collection agency for payment, it will be reported.

You are entitled to make a consumer statement to explain a particular situation, such as a dispute with a financial institution or a fraud warning on your file.

Any credit report inquiries will also be recorded on your file.

Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.Both Equifax and TransUnion use a scale from 300 to 900. The higher the score, the lower the risk for the lender.

The formula used by credit-reporting agencies takes into account various factors such as the following: 1. Payment history. Is a balance carried on credit cards from month to month? Have you ever missed a payment on any of your debts? 2. Any collection or bankruptcy recorded against you. 3. Outstanding debts, what is the limit on your credit cards? is your spending close to your  credit limit. 4. History, how long have you had credit. 5. Number of inquiries. 6. Type of credit you are using.

The above factors all go into determining your credit score.

It is a good idea to request a copy of your credit report at least once a year to verify that your personal information is up to date, that your financial information is correct, and to ensure that you have not been the victim of identity fraud.

Here are some tips on how to improve your credit score; 1. Always pay your bills on time. 2. Try to pay in full by the due date. If you aren’t able to do this, pay at least the minimum amount shown on your monthly statement. 3. Try to pay your debts as quickly as possible. 4. Don’t go over your credit limit on your credit card. Try to keep the balance well below the limit. The higher your balance, the more impact it has on your credit score.5. Reduce the number of credit applications you make. 6. Make sure you have a credit history. You can build credit history by using a credit card.

In addition to the above, here are some do’s and don’ts.

Do contact your creditors if you are having trouble making payments.

Do make sure that your monthly account statements are correct.

Do read the statements you receive from your credit card company carefully. Keep up to date on any fee increases or changes in your card’s terms and conditions.

Do deal with companies you know and trust.

Don’t accept or use any form of credit until you understand and are comfortable with its terms and conditions, to avoid any misunderstandings between you and the credit issuer.

Don’t wait to report any unauthorized transactions on your account. Contact your credit issuer immediately if your bill includes items you did not buy.

Don’t go over your credit limit on your credit cards.

If you are thinking about purchasing a home and would like to know what you would qualify for, give us a call at Invis – West Coast Mortgages and we will be glad to meet with you to discuss your specific situation. We can work together to put together a plan to correct weaknesses in your credit score if any exist, so that your dream of home ownership can be realized. We are here to help.

 

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