1 Nov

Empowering Aging in Place with the CHIP Reverse Mortgage

General

Posted by: Jennifer Koop

Empowering Aging in Place with the CHIP Reverse Mortgage.

As we age, maintaining independence and staying in the home we love can be a challenge, especially when faced with reduced mobility and the need for costly home modifications and personal care services. However, with the CHIP Reverse Mortgage by HomeEquity Bank, aging in place becomes more feasible and attainable. Here are three ways in which this unique financial solution can support you:

  1. Enhance your home for accessibility and enjoyment.

The CHIP Reverse Mortgage enables you to make essential home improvements that improve accessibility, safety, and overall livability. For example, you can adjust electrical switches and outlets to a more comfortable height, eliminating the need for reaching overhead. You can also plan for features like relocating the laundry room from the basement to the main floor to facilitate single-level living.

2. Afford the convenience of at-home care.

With funds from the CHIP Reverse Mortgage, you can access financial resources to help with various at-home care needs. From hiring a cleaning crew to maintain your house regularly to securing 24/7 in-home caregivers, the funds provide the means to ensure you receive the necessary assistance and support.

3. Support for transitioning into assisted living or long-term care.

If your spouse or a loved one needs to move into assisted living or long-term care, the CHIP Reverse Mortgage can alleviate the financial strain of the transition. The funds can be used to pay for accommodation and meals, known as co-payment fees, ensuring that your loved one receives the care they need.

Ease financial burdens with the CHIP Reverse Mortgage

The CHIP Reverse Mortgage by HomeEquity Bank allows Canadians aged 55 + to unlock up to 55% of their home’s equity as tax-free cash. This enables you to revitalize your living space, afford at-home care services, or support your spouse’s transition to assisted living or long-term care. What’s more, there are no required monthly mortgage payments until you decide to move or sell your home.

Contact Jennifer Koop, your Dominion Lending Centres mortgage expert today to discover how the CHIP Reverse Mortgage can empower your journey of aging in place.

Contact us today 705-349-0502

Published by HomeEquity Bank

17 Oct

What is Alternative Lending?

General

Posted by: Jennifer Koop

What is Alternative Lending?

When traditional lenders (such as banks or credit unions) deny mortgage financing, it can be easy to feel discouraged. However, it is important to remember that there is always an alternative!

If you’re seeking a mortgage, but your application doesn’t fit into the box of the big traditional institutions, you’ll find yourself in what’s commonly referred to in the industry as the “Alternative-A” or “B” lending space. These lenders come in three classifications:

  • Alt A lenders consist of banks, trust companies and monoline lenders. These are large institutional lenders that are regulated both provincially and federally, but have products that may speak to consumers who require broader qualifying criteria to obtain a mortgage.
  • MICs (Mortgage Investment Companies) are much like Alt A lender but are organized in accordance with the Income Tax Act with an incorporated lending company consisting of a group of individual shareholder investors that pool money together to lend out on mortgages. These lenders follow individual qualifying lending criteria but tend to operate with an even broader qualifying regime.
  • Private Lenders are typically individual investors who lend their own personal funds but can sometimes also be a company formed specifically to lend money for mortgages that carry a higher risk of default relative to a borrower’s situation.  These types of lenders are generally unregulated and tend to cater to those with a higher risk profile.

All classifications noted above price to risk when it comes to a mortgage. The more broad the guidelines are for a particular mortgage contract, the more risk the lender assumes. This in turn will yield a higher cost to the borrower typically in the form of a higher interest rate.

Before considering an alternative mortgage, here are some questions you should ask yourself:

  1. What issue is keeping me from qualifying for a traditional “A” mortgage today?
  2. How long will it take me to correct this issue and qualify for a traditional lender mortgage?
  3. How much do I have to improve my credit situation or score?
  4. How much do I currently have available as a down payment?
  5. Am I willing to wait until I can qualify for a regular mortgage, or do I want/need to get into a certain home today?
  6. Is this mortgage sustainable? Can I afford the larger interest rate?
  7. Can I exit this lender down the road in the event the lender does not renew or I cannot afford this alternative option much longer?

If you are someone who is ready to go ahead with an alternative mortgage due to a weaker credit score, or you don’t want to wait until you’re able to qualify with a traditional lender, these are some additional questions to ask when reviewing an alternative mortgage product:

  1. How high is the interest rate? What are the fees involved and are these fees paid from the proceeds, added to the balance or paid out of pocket
  2. What is the penalty for missed mortgage payments? How are they calculated? What is the cost to get out of the mortgage altogether?
  3. Is there a prepayment privilege? For example, are you able to avoid penalties if you give the lender a higher mortgage payment once a month?
  4. What is the cost of each monthly mortgage payment?
  5. What happens at the end of the term. Is a renewal an option and what are the costs to renew if applicable
  6. What is the fine print?

When it comes to the alternative lending space, things can get complex. Contact Jennifer Koop your DLC mortgage expert today if you’re considering an alternative lender and we can help you source out various mortgage products, as well as review the rates and terms to ensure it is the best fit.

Contact us today for all your mortgage needs 705-349-0502

Published by DLC Marketing Team

10 Oct

What Insurance Protection Does Your New Home Need?

General

Posted by: Jennifer Koop

What insurance protection does your new home need?

With interest rate hikes on pause, more buyers are coming off the sidelines and looking to enter the market. Prices are high, so protecting your investment and your home is more important than ever.

What insurance will you need to protect your new home? A quick Google search will turn up entries for title insurance, as well as for home insurance. They each protect consumers, but from very different things.  Here’s a quick breakdown on each type of insurance and why properly protecting yourself takes both:

title insurance

WHAT IS TITLE INSURANCE?

Title insurance protects your right to own your property. It deals with hidden issues your home may have, as well as future risks like fraud. This is just some of what title insurance covers:

  • Title defects that can keep you from selling,
  • Title fraud and home title theft,
  • Encroachment and access issues,
  • Tax arrears and unpermitted work from previous owners.

Want to know more about title insurance coverage?

HOW MUCH IS TITLE INSURANCE?

You only pay once for title insurance, usually between $150—$800, depending on where your home is and how much you bought it for. There are no monthly or annual payments, and your coverage lasts for as long as you or your heirs have an interest in the property.

home insurance

WHAT DOES HOME INSURANCE COVER?

Home insurance covers four main things:

  • Damage to your home or other structures on the property,
  • Lost, damaged or stolen valuables, depending on your policy,
  • Liability for accidents or injuries that happen on your property,
  • Losing use of your home because of an event covered by your home insurance (usually to do with damage to the home).

HOW MUCH IS HOME INSURANCE?

It varies, but the average cost for home insurance in Canada is currently a little less than $1,000 per year.1 Your cost can change from year to year if you switch providers or update your coverage. Many home insurance policies also give you the option to purchase additional coverage, like flood protection, which increases your premiums.

which do you need, home insurance or title insurance?

They cover very different things, so you need both. It’s the only way to protect both your home itself and your ownership of it.

  • Title insurance doesn’t cover most property damage, lost or stolen items, or medical/injury liability.
  • Home insurance doesn’t cover fraud, back taxes, or the City forcing you to alter or remove structures on your property.

EXAMPLE OF A TITLE INSURANCE CLAIM

A north Ontario homeowner and her neighbour had discovered that her water and sewage lines didn’t connect to her street. Instead, they connected to the next street over via her neighbour’s property. They forced her to relocate her water and sewer lines at huge expense.

But fortunately, she had a title insurance policy in place with FCT. We stepped in to resolve the issue for her, and we were able to cover the full cost of moving her water and sewer lines.

Paid: $115,284.32

Without title insurance, where would the homeowner in that case have come up with $115,000? The risks title insurance protects you from are unpredictable and can be hugely expensive. If you don’t have title insurance and home insurance, the truth is that you’re at risk.

how can you get protected?

You can get title insurance coverage, even if you already own your home with an existing homeowner’s policy. But the best time to start protecting your new home is while you’re purchasing it. Talk to your lawyer or notary about title insurance from FCT, or learn more about residential title insurance here.

1 source: ratehub.ca

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.

Published by DLC Marketing Team

Contact Jennifer Koop, Recommended Dominion Lending Centres Mortgage Agent in Huntsville, Muskoka for all your mortgage needs.

705-349-0502

 

10 Oct

How to Talk to Your Kids about Finances

General

Posted by: Jennifer Koop

How to Talk to Your Kids about Finances.

Financial independence is a critical skill for future success that your children will not learn anywhere else. Not only does financial literacy help your children have more success in life, but it allows them to move out sooner and it avoids delaying your retirement with additional expenses to support them.

So, how do you teach your children about money?

  1. Review Your Attitude Towards Money: The first and most important thing is to examine your own attitude towards money. Are you a penny pincher? Frivolous spender? Do you buy on impulse, or take a long time to make a purchase? How much debt do you have? Your financial habits will shape your children. To ensure that you are setting them up for their best financial future, parents need to consider what messages they are sending with their own money habits.
  2. Give Your Children an Allowance: Providing an allowance to your children (especially one in exchange for chores) is an age-old way of teaching your kids about money. A good guideline is $1.00 per year of your child’s age. For a 10-year-old, this would be $10 per week.
  3. Teach Your Child to Save: If you are giving your child $10 per week in allowance for chores, encourage them to put even just $1 per week into a piggy bank. In six months, show them how much money they have saved and talk to them about why it is important, and what they can do with that larger amount now.
  4. Encourage Kids to Think Before They Buy: While it’s hard to get a 10-year-old excited about an RRSP, there are other ways to help them plan ahead. One is to encourage them to think about their purchases before they commit. They saw a toy on TV and they have to have it – teach them about how advertisements are designed to make you want something. Ask them to wait a week. Do they still want it?
  5. Involve Your Children in the Family Finances: It is more valuable than you might think to let your kids see and hear you discuss financial planning; let them be part of opening and paying bills or planning vacations. Explain why and how much you pay for certain things and discuss affordable choices. This helps them be part of the conversation and will work to instill a sense of financial responsibility as they grow up.

Remember, you are the best example to your children about money. Don’t be afraid to share the ups and downs with them. Be patient with your kids, but don’t give up! The best thing you can do as a parent is to promote financial security and independence.

Contact your recommended Cottage Country Mortgage Agent, Jennifer Koop for all your mortgage needs 705-349-0502.

Published by DLC Marketing Team

28 Sep

Converting Your Basement to an Income Suite

General

Posted by: Jennifer Koop

Converting Your Basement to an Income Suite.

With the current interest rates and economic scenarios, many Canadians may be looking for ways to bring in some extra cash. One option for this is to put your home equity to work and consider renovating your basement into a legal income suite! You can do this by using a secured credit line (home equity line of credit or HELOC) to help fund the upfront cash to make changes to your home.

A few things to consider before you invest in renovating to create an income suite include:

Zoning: Before looking into doing anything with an income suite, always double-check if you are zoned accordingly for a smooth renovation. If your zoning does not allow for secondary suites, see if you can rezone.

Local Regulations: Depending on your location, there may be particular regulations that you need to follow or be aware of regarding your suite. A few examples of how the regulations can differ between provinces or cities include:

  • In Coquitlam, you cannot have a suite that is more than 40% of the main house floor plan. You are also required to offer a parking spot for tenants.
  • In Kelowna, you can only have one secondary suite and the home must have an “S” designation.
  • In Calgary, updated zoning legislation has now made it easier to add income suites.
  • Toronto has also proposed reforms that will make it easier to add suites.
  • In Montréal, anyone carrying out a project involving the addition of at least 1 dwelling and a residential area of ​​more than 450 m² (equivalent to approximately 5 dwellings) must enter into an agreement with the City of Montréal in order to contribute to the supply of social, affordable and family housing. It can be a new building, an extension, or the conversion of a building.

Visit the official municipal websites or consult local building departments to obtain accurate and up-to-date information on the rules and requirements in your area BEFORE getting started.

Insurance & Legal Considerations: Before adding your secondary suite, ensure that you have proper insurance coverage or the ability to add additional coverage to protect both the primary residence and suite. In addition, you will want to consult a lawyer and draw up a tenant or rental agreement for any potential tenants. Ontario has a mandatory standard lease agreement that all landlords must use.

Unit Layout and Design: If the zoning and regulations in your area allow you to build an income suite, the next steps are to look at the suite layout and dimensions. Confirm any size restrictions or minimum ceiling height requirements as you are laying out the design for the unit. The unit should have, at minimum the following:

  • A separate parking space for the renter.
  • A separate entrance, kitchen, bathroom, and living/sleeping areas.
  • Ventilation and soundproofing measures to enhance livability.
  • Consideration of natural light.
  • Interlink smoke detectors for primary and secondary residences.
  • Separate, independently-controlled ventilation and heating system.
  • Proper drainage, sewage connections, and utility separations.
  • Outlets, circuits, and lighting that meet electrical code requirements.

Ensure that however your income suite is designed, you are hiring the appropriate building, plumbing, and electrical experts to ensure your suite is up to code and avoid any potential disasters.

Building & Trade Permits: Once you have confirmed that you are properly zoned and able to add an income suite and understand all the regulations for your area, you will want to draft your blueprints and submit a permit application, along with the fee, before you get started. For instance, in B.C. you are required to have a Building Permit for any suite to be considered legal.

IMPORTANT: Even if you are not required to have a building permit, it is important to get these permits for other aspects including insurance coverage should anything happen. Having a building permit will help protect your investment.

In addition to your building permits, you will need to get permits for any plumbing, electrical, and gas renovations prior to beginning your work.

Inspections & License: Once you have your permits and have begun construction, make sure you understand what inspections are required throughout the process and you schedule them accordingly with local authorities to ensure compliance with building codes, fire safety standards, and health regulations.

If the work meets all requirements, your suite will be approved. The last step is determining if you need a business license. This is not required if your family (parents, children, etc.) will be living in the suite. In Vancouver, for example, if you intend to rent out your suite long-term, you DO need a license. Be sure to check any rules on this in your area.

Incentives: Beyond the ability to earn extra income per month, there are a few additional government incentive programs when it comes to suites including:

  • First Nations: If you live on a First Nations reserve, you may be eligible for federal funding that will provide up to $60,000 to help you build an inexpensive secondary suite rental linked to your principal home. If you live in a northern or remote area, this amount is increased 25%. This is a 100% forgivable loan that is not required to be paid back assuming all guidelines are followed.
  • Residential Rehabilitation Assistance Program (RRAP) – Secondary and Garden Suites: This program is open to all First Nations or individual First Nation members, particularly those who own a family home that can be converted to include a self-contained suite for a senior or adult with disability.
  • Multigenerational Home Renovation Tax Credit: A credit for a renovation that creates a secondary unit within the dwelling to be occupied by the qualifying individual or a qualifying relation. The value of the credit is 15% of the lesser of qualifying expenditures and $50,000.
  • British Columbia: Beginning in early 2024, BC homeowners will be able to access a forgivable loan of 50% of the cost of renovations, up to a maximum of $40,000 over five years, for income suites.
  • Ontario: There are multiple secondary suite programs throughout Ontario, depending on your region. These loans provide $25,000 to $50,000 in funding and are forgivable assuming continuous ownership for 15 years.

While it is important to look online and do your research. Your best resource will be visiting local authorities at the “City of” to confirm that you completely understand the considerations before moving forward with implementing an income suite.

Published by DLC Marketing Team

For all your mortgage needs call us today 705-349-0502

27 Sep

Debt Reduction Key as Interest Rates Soar

General

Posted by: Jennifer Koop

Debt Reduction Key as Interest Rates Soar.

There are lots of reasons people fall into debt but only one way out — and it requires a combination of planning, discipline, and persistence. With the rise in interest rates, there is no better time to map out an action plan to reduce your debt.

Start by gathering information about all of your debts — student loans, credit cards, lines of credit, car loans, overdue bills — everything. Make a list of all the debts with the details of the amounts owed, interest rate, and minimum monthly payments. This will help you set goals, create a timeline, and prioritize your repayments.

Your first goal is to make sure everyone gets paid the minimum amount required to avoid your debts going into arrears. Overdue bills and missed payments are going to play havoc on your credit score and it can take a lot of time and effort to rebuild.

The next step is to figure out how much more you can allocate from your current income for debt repayment. One common debt pitfall is to look at your situation and conclude that more income is the solution — and immediately start looking for ways to make extra money. While more income can obviously help you reduce debt, it shouldn’t be your first step.

The most important step is to create a realistic budget. Reducing the expense side of your monthly budget is going to free money to pay off debt much faster than pumping up your income on the top line. You need to identify areas where you can reduce expenses and channel those savings to your debt repayment fund. It’s critical to start accurately tracking your expenses and get the actual data on your spending, not just a guesstimate based on your feeling.

When it comes to who to pay first, there are two commonly used strategies for prioritizing debts: the debt avalanche method and the debt snowball method. With the avalanche method, you focus on paying off the debt with the highest interest rate first while making minimum payments on other debts. The snowball method involves paying off the smallest debts first, regardless of interest rates, and then moving on to larger debts.

From a financial perspective, the avalanche method is the best way to pay off debt, especially if the interest rate differential is large. The snowball method may improve your motivation, but it makes no sense to pay off a small home equity loan at 6% if you are carrying credit card debt at 20%!

Interest rates on credit card balances haven’t been affected by Bank of Canada rate changes (unlike other loans!), but they are already so high that in almost every case they should be the starting point for your debt reduction efforts. If you have been making payments and your credit rating is not too bad, you may be eligible for a credit card balance transfer offer with a promotional 0% interest rate for a specific period. Make sure you have a realistic plan and are disciplined before you sign up for any balance transfer options or credit card consolidation loans. They are a good option for managing credit card debt as they lower or defer the interest, but you need to stay on the payment schedule. If you have any investments (TFSA?), selling them to pay off credit card debts usually makes financial sense.

Paying off debt is a long-term commitment that requires discipline — there is no quick way out. Once you get started and see some progress, your mindset will begin to shift, and a huge weight will start to lift. Becoming debt-free or at least in a position where debt stress doesn’t consume your life will do as much for your mental health as it will for your financial health.

Published by DLC Marketing Team

Contact Jennifer Koop, your Recommended Mortgage Agent in Huntsville, Muskoka 705-349-0502 for all your mortgage needs.

21 Sep

Understanding Mortgage Rates

General

Posted by: Jennifer Koop

Understanding Mortgage Rates.

While not the only factor to look at when choosing a mortgage, interest rates continue to be one of the more prominent decision criteria with any mortgage product. Understanding how mortgage rates are determined and the differences between your typical fixed-rate and variable-rate options can help you make the best decision to suit your needs.

HOW RATES ARE DETERMINED

The  chartered  banks  set  the  prime-lending  rate  (the  rate  they  offer  their best customers). They base their decisions on the Bank of Canada’s overnight rate, because that’s the rate that influences their own borrowing. Approximately  eight  times  per  year,  the  Bank  of  Canada  makes  rate announcements that could affect your mortgage as variable  mortgage  rates  and  lines  of  credit  move  in  conjunction with the prime-lending rate. When it comes to fixed-rate mortgages, banks  use  Government  of  Canada  bonds. In the bond market, interest rates can fluctuate more often and can provide clues on where fixed mortgage rates will go next.

To put it simply: a variable-rate is based off of the current Prime Rate, and can fluctuate depending on the markets. A fixed-rate is typically tied to the world economy where the variable rate is linked to the Canadian economy. When the economy is stable, variable rates will remain low to stimulate buying.

FIXED-RATE VS. VARIABLE-RATE

Fixed-Rate Mortgage

First-time homebuyers and experienced homebuyers typically love the stability of a fixed rate when just entering the mortgage space.

The pros of this type of mortgage are that your payments don’t change throughout the life of the term. However, should the Prime Rate drop, you won’t be able to take advantage of potential interest savings.

Variable-Rate Mortgage

As mentioned, variable-rate mortgages are based on the Prime Rate in Canada. This means that the amount of interest you pay on your mortgage could go up or down, depending on the Prime. When considering a variable-rate mortgage, some individuals will set standard payments (based on the same mortgage at a fixed-rate). This means that, should Prime drop and interest rates lower, they would end up paying more to the principal as opposed to paying interest.

If the rates go up, they simply pay more interest instead of direct to the principal loan.

Other variable-rate mortgage holders will simply allow their payments to drop with Prime Rate decreases, or increase should the rate go up. Depending on your income and financial stability, this could be a great option to take advantage of market fluctuations.

Want to learn more about rates or need mortgage advice? Contact Jennifer Koop, your recommended Dominion Lending Centre mortgage expert today! 705-349-0502

Published by DLC Marketing Team

20 Sep

What’s Being Done About Title Fraud?

General

Posted by: Jennifer Koop

What’s being done about title fraud?

Your home is one of the greatest investments you’ll make in life. The idea of something happening to it is one of the worst images you can have as a homeowner. You can protect your property from damage or even break-ins, but identity thieves can threaten your ownership.

Title fraud can leave you out tens or even hundreds of thousands of dollars. Depending on what the fraudster is after, you could lose your equity, or even your home.

FCT is committed to protecting homeowners by catching fraud before it happens, providing education on fraud prevention, and stepping in to prevent losses if a scam succeeds.

a quick breakdown of title fraud

Title fraud starts with stealing a homeowner’s identity, then follows one of two main paths:

PURCHASE TITLE FRAUD

  • Someone impersonates a homeowner to sell their property.
  • To the innocent buyer, it looks like a regular home sale. The “seller” often has property access as a tenant or AirBnB guest and can show buyers around.
  • The fraudster disappears after a quick sale, usually for below market value.
  • The homeowner often learns about the fraud when the buyer attempts to move in.

Depending on where you live, what happens next can be different: In B.C., the innocent buyer gets to keep the house, while in Ontario, the homeowner gets to keep it. In either scenario, someone is left with no home and without the equity to buy another.

MORTGAGE TITLE FRAUD

  • Someone impersonates a homeowner to take out a mortgage on their property.
  • To the lender, it just looks like the homeowner wants to refinance or take out some home equity.
  • The fraudster walks away with the money, sometimes making a few payments on the new mortgage to cover their tracks.
  • The homeowner often learns about the fraud when the fraudulent mortgage goes into delinquency and the lender starts to take action.

Title fraud fact: Did you know that seniors are especially vulnerable to title fraud?

If you’re the homeowner, you can’t sell your property or take any equity out of it until your title is restored. This usually means tens of thousands in fees.

An underwriter at FCT recently caught an attempted mortgage title fraud in a town near Calgary. After spotting an issue with one piece of ID in a routine refinance deal, she flagged it with the team’s Certified Fraud Examiner (CFE), who investigated and confirmed the fraud. Someone was pretending to be the homeowner and taking $400,000 out of the property. We put a stop to that deal.

how is fct protecting homeowners?

To FCT, being protected means having peace of mind. Here are just some of the ways we’re making sure homeowners have that:

WATCHING DEALS

Our underwriting team identified $350 million in suspicious transactions in 2022, from residential deals alone. The team monitors for the red flags we’ve identified over three decades of experience, and prevent hundreds of millions in losses every year.

EDUCATING OTHERS

We aren’t the only ones working to protect consumers. Lending and legal professionals across Canada are stepping up to educate themselves about title fraud and how to help prevent it. We provide free seminars, articles and videos to both professionals and the public—the more everyone knows about title fraud, the harder it gets for the fraudsters.

TAKING RESPONSIBILITY

When FCT looks at a deal, it’s because a lender, legal professional, or homebuyer wanted to protect it with title insurance. That protection means that the buck stops with us. If we don’t catch a fraudulent deal before it goes through, we’re the ones who pay for it, not you.

Beyond the coverage, every policy we issue carries a duty to defend. That means if there’s a possible fraud, we step in to navigate the process on your behalf. We take on the work and costs it takes to make you whole, hiring investigators, retaining counsel and even going to court so that you don’t have to.

The threat of fraud is on the rise, but you don’t have to face it alone. Learn more about title fraud by following the links in this article, and if you don’t have title insurance yet, get protected now. It takes minutes to do, and lasts for as long as you own your home.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.

Published by FCT

Contact us for all your mortgage needs 705-349-0502

20 Sep

Alberta title fraud caught: why expertise matters

General

Posted by: Jennifer Koop

Alberta title fraud caught: why expertise matters.

Think title fraud is just a risk in places like Toronto and Vancouver? Think again. FCT just prevented $400,000 of fraud in a city of 20,000.

It seemed like a standard refinance deal from a community east of Calgary, just a homeowner leveraging some of their equity. But the owner had nothing to do with the deal.

The underwriter working on the transaction spotted an issue with one of the ID pieces she received. She escalated the issue to the Certified Fraud Examiner (CFE) on our underwriting team. Our CFE quickly noticed more issues with the “owner’s” ID, and with the deal in general.

A fraudster had impersonated the homeowner and was trying to walk away with almost half a million dollars, leaving them with the monthly mortgage payments. We quickly put a stop to the transaction and notified the lawyers involved in the deal.

what would have happened if the fraud succeeded?

Imagine being that homeowner if there hadn’t been experts looking at the deal and asking the right questions. Restoring an owner’s title can take tens of thousands of dollars—that expense would have fallen on the owner out of nowhere. How many homeowners have enough money ready to handle that kind of emergency?

Cases like this show just how important it is to work with experts in fraud prevention on every deal. The perception that fraud is an Ontario-only threat gives fraudsters more room to maneuver in other regions. Homebuyers and real estate professionals across Canada need to stay vigilant as the rate of fraud rises.

Remember, there’s at least one fraudulent deal every week. How will you know if your deal is that attempt?

how to protect yourself against title fraud

Whether you’re a homeowner, homebuyer or legal professional, you need protection against title fraud. The consequences can be disastrous: consumers can be out tens or hundreds of thousands of dollars, and without a way to compensate for that loss, the fraud poses a risk to the legal professional who conveyed the deal, as well.

WORK WITH THE EXPERTS

The best way to protect against the consequences of fraud is to stop it in its tracks. FCT’s underwriters identified $350 million in suspicious residential transactions in 2022 alone. We have the experience and the expertise to help keep consumers and professionals alike safe.

TITLE INSURE EVERY DEAL

If a fraudster succeeds, title insurance is often the only recourse to make victims whole. It can cover claims in the hundreds of thousands, and carries a duty to defend. That means FCT takes on the responsibility of resolving the situation—hiring investigators, retaining counsel and arguing the case in court if need be.

Learn more about residential title insurance.

With such a high rate of fraud, there really is no substitute for title insurance. As a legal professional, any deal that comes in could be a scam. As a homebuyer, any home listed for sale could have been listed by a fraudster.

Title fraud is rising—don’t leave yourself at risk. Rely on the experts and the protection of an existing homeowner’s policy from FCT.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.

Published by FCT

 

Contact Jennifer Koop, Recommended Mortgage Agent in Huntsville, Muskoka for all your mortgage needs 705-349-0502

12 Sep

How Job Loss Affects Your Mortgage Application

General

Posted by: Jennifer Koop

How Job Loss Affects Your Mortgage Application.

Whether you’ve made an offer on a home already or are still in the process of looking, you already understand that buying a home is likely the largest investment you’ll ever make.

When it comes to your mortgage application, there are a few things that you should avoid doing while you’re waiting for approval – such as making large purchases (i.e. a new car), applying for new credit, pulling additional credit reports, etc. Another issue that can come up is the loss of your job.

What you can afford to qualify for in relation to your mortgage depends on your income. As a result, the sudden loss of employment can be quite detrimental to your efforts. So, what do you do?

Should You Continue With Your Mortgage Application?

If you’ve already qualified for a mortgage, but your employment circumstances have changed, your first step is to disclose this to your lender. They will move to verify your income prior to closing and, if they have not been told in advance, it may be considered fraud as your application income and closing income would not match.

In some cases, the loss of your job may not affect your mortgage. Some examples include:

  • You secure a new job right away in the same field as previously. Keep in mind, you will still need to requalify. However, if your new job requires a 3-month probationary period then you may not be approved.
  • If you have a co-signer on the mortgage who earns enough income to qualify for the value on their own. However, be sure your co-signer is aware of your employment situation.
  • If you have additional sources of income such as income from retirement, investments, rentals or even child support they may be considered, depending on the lender.

Can You Use Unemployment Income to Apply for a Mortgage?

Typically this is not a suitable source of income to qualify for a mortgage. In rare cases, individuals with seasonal or cyclical jobs who rely on unemployment income for a portion of the year may be considered. However, you would be asked to provide a two-year cycle of employment followed by Employment Insurance benefits.

What Happens During Furlough?

If you did not lose your job entirely but have instead been furloughed or temporarily laid off, your lender may take a wait-and-see approach to your mortgage application. You would be required to provide a letter from your employer with a return-to-work date on it in this situation. However, if you don’t return to work before the closing date, your lender may be required to cancel the application for now with resubmitting as an option in the future.

Have You Talked to Your Mortgage Professional?

Regardless of the reason for the change in your employment situation, one of the most important things you can do is contact Jennifer Koop, your Dominion Lending Centres mortgage expert directly to discuss your situation. She can look at all the options for you and help with finding a solution that best suits you.

Contact us today for all your mortgage needs, 705-349-0502

Published by the DLC Marketing Team