25 Sep

The Benefit of Rate Holds

General

Posted by: Jennifer Koop

The Benefit of Rate Holds.

Being on the path to purchasing your first home is one of the most exciting and most rewarding moments in life!

To help make the mortgage process smoother, one of the things you can do is to get pre-approved for your mortgage. Getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping!

Rate holds for mortgages offer several benefits including:

  1. Protection Against Rate Increases: A rate hold guarantees that you will receive a specified interest rate for a set period, typically up to 120 days. This protects you from potential rate hikes during this period. Plus, if the rate should drop, you can still take advantage of the lower option!
  2. Financial Planning: Knowing the exact rate you will pay allows for better financial planning and budgeting. It provides clarity regarding what you can expect for your monthly mortgage payments. This makes it easier to target the right price range of home so that you can ensure future financial stability.
  3. Time for Decision Making: A rate hold provides peace of mind allowing you the necessary time to shop around for the right home. During this time, you can also compare different mortgage options without the pressure of changing interest rates. This is particularly useful when you’re considering different lenders or mortgage products.
  4. Stress Reduction: It reduces the stress of rate fluctuations and uncertainties in the housing market. After the past few years of turmoil, knowing that you have a secured mortgage rate can take a lot of the pressure off shopping. Instead of feeling like you need to find a new home before the rates change again, you can take the appropriate time. Plus, if your rate hold expires, it is easy to submit for a new one!
  5. Securing a Competitive Rate: While we are not anticipating interest rate increases in the coming years, securing a rate hold while you shop can save you money over the long term by locking in a favorable interest rate should anything pivotal happen in the market.

Overall, rate holds provide peace of mind, financial security, and the opportunity to make informed decisions when entering into a mortgage agreement. They are particularly valuable in fluctuating interest rate environments or when you anticipate delays in finalizing a mortgage transaction. Looking to purchase a home? Want more information on rate holds and the mortgage process? Reach out to us,  your DLC Mortgage Experts, today.

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

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5 Sep

2024 Fall Market Outlook

General

Posted by: Jennifer Koop

2024 Fall Market Outlook.

The initial Bank of Canada rate cuts this past summer did not spur housing activity as anticipated, but potentially more on the way will continue to affect the housing market outlook. New listing levels are expected to rise as sellers who may have held back enter the market with the hope that lower mortgage rates will attract additional buyers.

While the current Bank of Canada rate of 4.25% may still not be enough to make a dent in home affordability, it does provide a glimmer of hope for potential buyers as interest rates continue to fall.

Canadians across the country are anxiously awaiting additional rate cuts, promoting future home affordability. While consumer confidence is beginning to rise, mortgage affordability will need to be balanced with rising unemployment to reduce the number of households with strained budgets.

In addition, while home prices have cooled a bit, home prices in Canada remain among the highest in the world’s most advanced economies (Japan, France, Germany, Italy, and the UK). These still -high prices have resulted in many potential first-time home buyers to withdraw for now. Higher property taxes, higher qualifying stress-test rates, and the current wave of mortgage renewals will also factor into how successful the Fall market will be.

In 2023 alone, the country saw an influx of 46% of new Canadians, which also contributes to housing demands and pricing. As rates continue to drop, the hope is that prices will stabilize owing to increased supply as demand rises.

If you are looking to get into the housing market as a buyer or seller, or simply have questions so you can best prepare yourself for a future move, don’t hesitate to reach out to us today!

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

Up Next: Closing Costs – The Real Numbers You Need to Budget For

15 Aug

Closing Costs – The Real Numbers You Need to Budget For

General

Posted by: Jennifer Koop

Closing Costs – The Real Numbers You Need to Budget For.

Buying a home is one of the most exciting ventures in life! To ensure it goes smoothly, you need to have a proper budget in place to protect your financial security and help you make the best decision for your future location. However, the cost of the home is not the only cost that you need to budget for! The temptation will always be to start looking at the very top of your budget but fees, such as mandatory closing costs, can easily put you over the top. Knowing the real numbers will make it that much easier to stay within your budget and maintain your financial comfort.

Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. This means, for an $800,000 home, you would be looking to budget around $22,000 on average.

Here are a few closing costs to keep an eye out for:

  • Land Transfer Tax: This is calculated as a percentage of the purchase price of your home, with the amount varying in each province. Some cities, such as Toronto, also have a municipal LTT.
  • Legal Fees and Disbursements: You can expect to incur a minimum of $500 (plus GST/HST) on legal fees for the preparation and recording of official documents around your purchase.
  • Title Insurance: Most lenders require title insurance to protect against losses in the event of a property ownership dispute. This is purchased through your lawyer/notary and is typically $300 or more.
  • PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
  • Home Inspection Fee: A home inspection is highly recommended as a condition of your Offer to Purchase to prevent any future surprises. This can cost around $500.
  • Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 – $800.
  • Property Insurance: Property insurance covers the cost of replacing your home and its contents, and must be in place on closing day. This is paid in monthly or annual premiums.
  • Prepaid Utility Bills: You may need to reimburse the previous owner of your property for prepaid costs such as property taxes, utilities, and so forth.
  • Property Taxes: Property taxes are due on an annual basis and are calculated as a percentage of the home value and vary by municipality. You also may need to reimburse the previous property owner if he/she has already paid property taxes for the full year.

Knowledge is power and understanding the hidden costs associated with purchasing a home can help you create a realistic budget and ensure you remain within your financial means. Contact us  if you have any questions about your current purchase process or if you are looking to buy a new home now or in the future!

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

30 May

Alternative Lending: Managing Mortgage Affordability

General

Posted by: Jennifer Koop

Alternative Lending: Managing Mortgage Affordability.

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 lenders but are organized following 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 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.

Managing mortgage affordability in the alternative lending landscape requires careful consideration of several factors to ensure financial stability and avoid potential risks. Here are some strategies to help:

  • Assess Your Financial Situation: Evaluate your income, expenses, debts, and savings to determine how much you can afford to borrow. Consider your credit score and history, as alternative lenders may have different requirements than traditional lenders.
  • Research Alternative Lenders: Review the above alternative lending options with help from us, your Dominion Lending Centres mortgage experts. Compare interest rates, fees, terms, and eligibility criteria to find the best fit for your financial needs and situation.
  • Understand Loan Products and Terms: Familiarize yourself with different types of mortgage products offered by alternative lenders, such as adjustable-rate mortgages (ARMs), interest-only loans, and balloon mortgages. Pay attention to the terms of the loan, including the interest rate, loan duration, prepayment penalties, and any potential changes to the monthly payment.
  • Calculate Affordability: Discuss with us, your mortgage broker, to estimate your monthly mortgage payment based on the loan amount, interest rate, and term. Consider other homeownership costs, such as property taxes, homeowners insurance, private mortgage insurance (PMI), and maintenance expenses, when calculating affordability to ensure you do not over-extend.
  • Budget and Plan for the Future: Create a budget that accounts for your mortgage payment and other housing-related expenses while leaving room for savings and unexpected costs. Plan for potential changes in your financial situation, such as job loss, salary changes, or interest rate increases, by building an emergency fund and having a contingency plan.
  • Get Pre-Approved: Obtain pre-approval through us, your mortgage broker, to determine how much you can borrow and demonstrate your seriousness as a buyer. Be prepared to provide documentation of your income, assets, debts, and credit history during the pre-approval process.
  • Seek Professional Advice: Consult with us, your Dominion Lending Centres Mortgage Experts, who can provide personalized guidance and help you navigate the alternative lending landscape.

By carefully managing mortgage affordability, whether within alternative lending or traditional, you can make informed decisions that support your homeownership goals while mitigating financial risks.

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

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3 Apr

Amortization Options

General

Posted by: Jennifer Koop

Amortization Options.

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (a longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Amortization Benchmarks
Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by the majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators. While this is the standard, it is not the only option when it comes to your mortgage amortization. Mortgage amortizations can be as short as 5 years and as long as 35 years!

Benefits of a Shorter Amortization
Opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

Benefits of a Longer Amortization
When it comes to choosing a longer amortization period, there are still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Let’s Chat!
We would be happy to help with the decision for the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You can shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5, or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

If you have any questions or are looking to get started on purchasing a home, don’t hesitate to reach out to us, your DLC mortgage experts, today!

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

14 Mar

Mortgage Types 101

General

Posted by: Jennifer Koop

Mortgage Types 101.

Get to know the important basics before you choose your mortgage.

You have to be sure you select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study mortgage types:

Closed Mortgage: If you want consistency with respect to rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

  • Predictability and consistency with respect to payment amount
  • Often comes with lower interest rates
  • Limited flexibility with paying down the mortgage faster
  • Cannot change interest rate during the term of mortgage

Convertible Mortgage: Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

  • Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
  • Offers lower interest rates than an open mortgage

Open Mortgage: If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

  • Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
  • Higher interest rate
  • Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact Jennifer Koop your DLC Mortgage Expert today!

Published by the DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka
Dominion Lending Centres, Mortgage Brokers Huntsville, Muskoka

26 Feb

Your RRSP Contribution Deadline

General

Posted by: Jennifer Koop

Your RRSP Contribution Deadline.

When it comes to your money, RRSPs are one of the best ways to save. Known as a “Registered Retirement Savings Plan”, RRSPs have tons of benefits including: reducing your taxable income, earning compound interest, savings protection and more.

One major component of RRSPs are your contributions! You have a maximum contribution amount that is equal to 18% of your total income for the previous year, not exceeding the annual limit (set per year by the Canadian government).

Before your RRSP deadline, there are a few things to consider to help you get a jump start in planning for the future and increasing your peace of mind:

  • Should you invest in a RRSP or focus on paying down your mortgage?
  • Is a debt consolidation mortgage right for you?
  • Should you consider the Home Buyers’ Plan to help fund your down payment on your first home?

If you already contributed this year, or missed the deadline, that’s okay! These are great questions to consider before next years contribution.

If you’re wondering if you still have the ability to contribute to your RRSP this calendar year, you can check your contribution levels on your Notice of Assessment from last year’s tax return or on the CRA My Account website.

To help understand your financial direction and what benefits paying down your mortgage might have versus adding to your RRSPs, please don’t hesitate to reach out to Jennifer Koop, your Dominion Lending Centres mortgage expert today! We’d be happy to review your situation and take a look at your mortgage to help determine the best course of action.

Published by DLC Marketing Team

For all your mortgage needs contact us today 705-349-0502
Jennifer Koop & Susan Bloom Mortgage Agents Huntsville, Muskoka

22 Feb

Advice on Buying Historic Homes

General

Posted by: Jennifer Koop

Advice on Buying Historic Homes.

For those of us with a flair for aesthetics or a penchant for history, historic homes offer a unique chance to own something special.

What is a Historic Home?

Typically, for a home to be considered “historic”, it needs to demonstrate rare or outstanding architecture. Typically, historic homes are at least 50 years of age, but it can be younger depending on what it represents in relation to Canadian design.

In addition, the home must be a landmark or hold historical value connected to a notable event, person, or institution in Canadian history.

Considerations for Historic Homes

When it comes to buying a historic home, there are a few additional considerations to keep in mind.

The first is that there are generally special bylaws, permits, and rules for historic homes. Features such as “character-defining” elements of the home, for example, cannot be changed, destroyed, or removed. Depending on the history of the home, there may be other features that require preservation per the story of the home and its significance to history. In some cases, trees or the lawn may also be assigned for conservation.

Due to the preservation goal of historic homes, there are limited things that you can do if you purchase one in terms of renovations. There will be special considerations for any expansions or modifications that will often need to be approved to ensure it does not impact the historical aspects of the home.

Another thing to consider when looking at historic homes is merely the age of the building. This can result in more costly maintenance, especially if the home has outdated elements or structures.

A proper home inspection can help to reveal any areas that may be cause for issues in the future or advise potential updates and renovations that are doable. Overall, you want to evaluate the home to ensure it has solid bones and structural integrity.

Benefits of Historic Homes

For individuals who are highly interested in history and culture, these homes can be an incredible opportunity to own a unique piece of history. Whether from an emotional or intellectual standpoint, this can be a very fulfilling purchase resulting in a one-of-a-kind home with a special link to Canada’s past.

In addition to owning a piece of history, there are more benefits such as joining a community that is committed to preservation with like-minded individuals.

Before diving into homeownership, especially that of a historic home, it is important to ask yourself if you are ready for the responsibility of owning a culturally significant property. Ownership of these properties is a privilege and must always be treated as such.

Published by the DLC Marketing Team

For all your mortgage needs contact us today 705-349-0502
Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka

16 Feb

Avoid Costly Mistakes When Building a New Home

General

Posted by: Jennifer Koop

Avoid Costly Mistakes When Building a New Home.

Building a new home is a super exciting endeavor as you opt to create the perfect space for you and your family. However, building a home is not without its costs and potential surprises… to mitigate bumps on your homebuilding journey and avoid costly mistakes, consider the following tips:

Set a Realistic Budget

When building your own home, it is vital to be realistic about your budget and what you can afford. Making a list of wants versus needs can be a good way to determine what is required, and where you can spend extra money should your budget allow for it. When constructing your budget, don’t forget to include construction costs from materials to labour, as well as permits, inspections, landscaping and unforeseen contingencies. The contingency fund should be approximately 10-15% of your budget put aside to cover unforeseen issues or changes.

Hire Reputable Individuals

From your architect and your contractor to your landscaper and inspector, it is vital to have the right people in the right positions. This will ensure that you not only get the best advice, but experienced individuals will also help to steer you through the process and mitigate potential issues. Be sure to do your research, ask for references and ensure the individual(s) you hire are licensed and insured.

While you’re researching individuals, it can also be a good idea to get multiple quotes. While you may have a contractor you like, reaching out to other individuals can help ensure you’re getting the best rate.

Review Contracts Carefully

Read and understand all contracts and agreements thoroughly between your contractor and yourself, your designer, your home inspector, etc. Ensure that everything is in writing and that you and your builder are on the same page regarding expectations, timelines, and costs.

Make and Follow Your Plan

Once you have your budget and the right people on the project, it is time to make a plan. You must work with an architect or designer to ensure that your new home aligns with your needs, lifestyle and budget. This should also include future plans – do you want to have children? Plan on adopting a pet or two? Possibly need space for an older family member in a few years? Getting this right from the beginning will help to avoid potential changes to the plan down the line, which will reduce expansions to cost and timelines.

Choose Your Materials Carefully

Choosing to invest in energy-efficient features and materials can help you to reduce long-term utility costs. While initially these installations may be more costly, they will work to save you money in the long run. Whenever possible, make sure these materials are also as durable as possible to ensure longevity and low maintenance requirements.

Secure the Necessary Permits

Ensure that you obtain all required permits and approvals before starting construction. One of the most important reasons to do this is to ensure that the work being done is safe, but having permits and inspections is also vital to ensure you can get insurance on your new build. Non-permitted renovations or build additions, changes, etc. can result in trouble securing insurance, on top of fines and other potentially costly issues.

Invest in Inspections

Having inspections done throughout the process of building your home can save you issues down the line by ensuring that all the installations are done correctly and safely and that your house meets the proper codes for electrical, plumbing, etc.

By taking proper steps and being proactive throughout the home-building process, you can minimize the risk of costly mistakes and ensure that your new home meets your expectations while staying within your budget.

Published by the DLC Marketing Team

For all your mortgage needs contact us today705-349-0502
Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka

5 Feb

6 Things for Co-Signers to Consider

General

Posted by: Jennifer Koop

6 Things for Co-Signers to Consider.

Are you thinking about co-signing on a loan? If you’re looking to help out a family member or loved one, this is a great way to do that as a co-signer can help overcome stress testing and borrowing limits.

However, it is important to be aware of the implications when co-signing on any loan.

  1. Credit History: If you are acting as a co-signor or guarantor on any loan, you essentially allow them access to your credit history. This means, if the borrower is late on the payments or there are issues with the loan, it will affect your credit score as well as theirs.
  2. Legal Implications: Always be sure to understand the taxes, legal and estate situations that go along with co-signing, should the borrower fail to pay. A lawyer can help you review the loan agreement and advise of any items you may need to take note of.
  3. Timeline: Understanding how many years the co-signer agreement will be in place and what your options are for making changes will help you determine the scope of the loan and if you are able to make changes at any point should the borrower become able to assume the entirety of the mortgage on their own in the future.
  4. Personal Income Tax: Depending on the loan, you may have an obligation to pay capital gains taxes so it is a good idea to review your personal tax situation with an accountant prior to signing off on the co-borrower agreement to ensure no surprises.
  5. Relationship with Borrower: This is a vital consideration for going in on any loan. Do you trust the individual? Are you aware of their financial situation? Are you willing to potentially put yourself at risk to assist them? These are all important questions as many of us may want to help out family or loved ones, but it is important to ensure that the individual is reliable.
  6. Future Finances: Lastly, consider your future finances and if you had any plans in the future that could be impacted by an additional loan. How much flexibility do you need for yourself and your family? If you have plans to refinance for a renovation or make changes to your own mortgage, being a co-signor could affect your options.

Co-signing for a loan always requires careful consideration as it is a large responsibility. However, when done correctly and with people you trust, it can be a great way to assist family members or loved ones with their goal of homeownership. If you are considering co-signing on a loan and have any questions or would like more clarity, please don’t hesitate to reach out to Jennifer Koop your DLC Mortgage Expert today!

Published by DLC Marketing Team

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

Jennifer Koop & Susan Bloom, Mortgage Agents Huntsville, Muskoka