30 May

Mortgage Pre-Approval vs. Pre-Qualification

General

Posted by: Jennifer Koop

Mortgage Pre-Approval vs. Pre-Qualification.

When it comes to getting a mortgage, there are a few things you can do in advance to make the mortgage process easier!

getting pre-qualified

The purpose of mortgage pre-qualification is to help you get a general idea of what you can afford when shopping for your new home.

Pre-qualification will take your own assessment of your financial status and allow you to come up with a budget for a home, as well as what you can afford for monthly payments.

Download the My Mortgage Toolbox app available on the iStore or Google Play to get pre-qualified today in under 60 seconds! Plus, you can get an idea of your monthly mortgage payments and compare various payment schedules.

getting pre-approved

While getting pre-qualified can give you a ballpark estimate on what you can afford, pre-approval means that a lender has stated (in writing) that you do qualify for a mortgage and what amount, based on submitted documentation of your current income and credit history.

A pre-approval usually specifies a term, interest rate and mortgage amount and is typically valid for a brief period of time, assuming various conditions are met.

There are a few benefits to pre-approval including:

  1. It confirms the maximum amount you can afford to spend
  2. It can secure you an interest rate for 90-120 while you shop for your new home
  3. It lets the seller know that securing financing should not be an issue. This is extremely important for competitive markets where lots of offers may be coming in.

Keep in mind, once you get your pre-approval, you will want to make sure not to jeopardize it. Until your mortgage application and sale is completed, be sure you don’t quit or change jobs, buy a new car or trade up, transfer large sums of money between bank accounts, leave your bills unpaid or open up new credit cards. You do not want your financial or employment details to change at all until you have closed on the new mortgage.

Reach out to Jennifer Koop, DLC mortgage expert to get started today! 705-349-0502

Published by DLC Marketing Team

26 May

Frequently (and not so frequently!) Asked Mortgage Questions

General

Posted by: Jennifer Koop

Frequently (and not so frequently!) Asked Mortgage Questions.

New to mortgages? Have questions but not sure where to start? We have the answers!

  1. What is the best interest rate I can qualify for?
    Your credit score plays a big role in the interest rate you can qualify for. The riskier you appear as a borrower, the higher your rate will be. While it is important to understand rate is NOT the most important aspect of your mortgage, it does still play a significant part. However, in some cases you may lose out on pre-payment privileges or porting options if you opt for the lowest rate. This is why it is important to look at your mortgage as a whole for your current and future needs.
  2. What credit score is needed to qualify for a mortgage?
    Generally, you are considered a prime candidate for a mortgage if your credit score is 680 and above. The higher you can get above 700 the better, as you will access lower rates. While almost anyone can obtain a mortgage via traditional or private lenders, if you have a lower credit score the key will be the size of your down payment. A sufficient down payment can reduce the risk to the lender providing you with the mortgage, thereby opening up lower rate options
  3. What happens if my credit score isn’t great?
    There are five main things you can do to improve a low credit score.

    • Pay down credit cards so they’re below 70% of your limits. Revolving credit like credit cards have a more significant impact on credit scores than car loans, lines of credit, or other types of debt.
    • Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there is a balance at the end of the month, this also affects your score.
    • Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other interested parties view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you.
    • Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. Use these cards periodically and then pay them off.
    • Don’t let mistakes build up. Always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation.
  4. What’s the maximum mortgage I can qualify for?
    To help you determine what you can afford, check out the My Mortgage Toolbox app on the iStore and Google Play. This app can assist with various calculations to determine the amount you can afford, how much your monthly mortgage payments will be, allow you to play around with payment frequencies, and so much more. You can also get pre-qualified on the app, which you can follow up with a proper mortgage pre-approval once you are ready to start shopping! This will also assist with solidifying your budget and understanding your mortgage costs.
  5. How much money do I need for a down payment?
    The minimum down payment required is 5% of the purchase price of the home. However, it is ideal to produce a down payment of 20% to avoid paying mortgage default insurance and, in some cases, to access a better interest rate.
  6. What happens if I don’t have the full down payment amount?
    It can be hard to put together a down payment. Fortunately, there are many programs available that will allow you to utilize different forms of down payments through cash-back products, RRSP withdrawal or gifting from an immediate family member.
  7. Should I go with a fixed- or variable-rate mortgage?
    The answer to this question depends on your personal risk tolerance. If you happen to be a first-time homebuyer, or you have a set budget that you can comfortably spend on your mortgage, it’s smart to lock into a fixed mortgage with predictable payments over a specific period of time. On the other hand, if your financial situation can handle the fluctuations of a variable-rate mortgage, this may save you some money in the long run. Another option is to opt for a variable rate, but make payments based on what you would have paid if you selected a fixed rate. There are also 50/50 mortgage options that enable you to split your mortgage into both fixed and variable portions.
  8. How much will my mortgage payments be?
    Your monthly mortgage payment cost will vary based on several factors, such as the size of your mortgage, whether you’re paying mortgage default insurance, your mortgage amortization, your interest rate, and your frequency of making mortgage payments. The My Mortgage Toolbox app from Google Play and the iStore has many calculators that can help you preview different mortgage and payment scenarios.
  9. What amortization will work best for me?
    While the benchmark and typically used standard amortization period for a mortgage is 25-years, shorter or longer timeframes are available. The main reason to opt for a shorter amortization period is that you’ll become mortgage-free sooner. In addition, by agreeing to pay off your mortgage in a shorter period of time, the interest you pay over the life of the mortgage is greatly reduced. A shorter amortization also affords you the luxury of building up equity in your home sooner. Equity is the difference between any outstanding mortgage on your home and its market value. While it pays to opt for a shorter amortization period, keep in mind you will have higher monthly payments as a shorter amortization period means less payments overall. If your income is irregular or you’re buying a home for the first time and will be carrying a large mortgage, a shorter amortization period that increases your regular payment amount and ties up your cash flow may not be the best option for you.
  10. How can I maximize my mortgage payments and own my home sooner?
    Most mortgage products include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage). Another way to reduce the time it takes to pay off your mortgage involves changing the way you make your payments by opting for accelerated bi-weekly mortgage payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. With accelerated bi-weekly mortgage payments, you’re making one additional monthly payment per year. In addition to increased payment options, most lenders offer the opportunity to make lump-sum payments on your mortgage (as much as 20% of the original borrowed amount each year).
  11. Can I make lump-sum or other prepayments on my mortgage, or will I be penalized?
    Most lenders enable lump-sum payments and increased mortgage payments to a maximum amount per year. But, since each lender and product is different, it’s important to check stipulations on prepayments prior to signing your mortgage papers. Most “no frills” mortgage products offering the lowest rates often do not allow for prepayments. As well, please note that some lenders will only let you make these lump-sum payments on the anniversary date of your mortgage while others will allow you to spread out the lump-sum payments to the maximum allowable yearly amount.
  12. If I have mortgage default insurance, do I need mortgage life insurance?
    Yes. Mortgage life insurance is a life insurance policy on a homeowner, which will allow your family or dependents to pay off the mortgage on the home should something tragic happen to you. Mortgage default insurance is something lenders require you to purchase to cover their own assets if you have less than a 20% down payment. Mortgage life insurance is meant to protect the family of a homeowner and not the mortgage lender itself.
  13. Is my mortgage portable?
    Fixed-rate products usually have a portability option as lenders utilize a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property, and the new balance is calculated using the current rate. With variable-rate mortgages, however, porting is usually not available. This means that when breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage. While porting typically ensures no penalty will be charged when you sell your existing property and buy a new one, it’s best to check with your mortgage professional for specific conditions before making any changes.
  14. If I want to move before my mortgage term is up, what are my options?
    This will depend greatly on your particular lender and the type of mortgage you have. While fixed mortgages are often portable, variable are not. Some lenders allow you to port your mortgage, but your sale and purchase have to happen on the same day, while others offer extended periods. As long as there’s not too much time between the sale of your existing home and the purchase of the new home, as a rule of thumb most lenders will allow you to port the mortgage. In other words, you keep your existing mortgage and add the extra funds you need to buy the new house on top. The interest rate is a blend between your existing mortgage rate and the current rate at the time you require the extra money.
  15. How much will I have to pay for closing costs?
    As a general rule of thumb, it’s recommended that you put aside at least 1.5% of the purchase price (in addition to the down payment) strictly to cover closing costs such as: property transfer taxes, lawyer/notary fee, survey costs, appraisal fee, title insurance and a home inspection.
  16. How do I ensure I get the best mortgage product and rate upon renewal at the end of my term?
    The best way to ensure you receive the best mortgage product and rate at renewal is to enlist Jennifer Koop, your mortgage professional, to review your current mortgage product, financial situation and shop the market for you. A lot can change over a single mortgage term, and you can miss out on a lot of savings and options if you simply sign a renewal with your existing lender without consulting your mortgage professional.
  17. What steps can I take to help ensure I don’t become a victim of title or mortgage fraud?

Red flags for mortgage fraud:

  • You’re offered money to use your name and credit information to obtain a mortgage
  • You’re encouraged to include false information on a mortgage application
  • You’re asked to leave signature lines or other important areas of your mortgage application blank
  • The seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing
  • The seller or developer rebates you money on closing, and you don’t disclose this to your lending institution. Sadly, the only red flag for title fraud occurs when your mortgage mysteriously goes.

Ways to protect yourself from title fraud:

  • Always view the property you’re purchasing in person; check listings in the community where the property is located – compare features, size and location to establish if the asking price seems reasonable
  • Make sure your representative is a licensed real estate agent
  • Beware of a real estate agent or mortgage broker who has a financial interest in the transaction
  • Ask for a copy of the land title or go to a registry office and request a historical title search; in the offer to purchase, include the option to have the property appraised by a designated or accredited appraiser
  • Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or meth lab
  • Ask to see receipts for recent renovations; when you make a deposit, ensure your money is protected by being held “in trust”
  • Consider the purchase of title insurance.

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

Published by DLC Marketing Team

11 May

5 Steps to Getting a Mortgage

General

Posted by: Jennifer Koop

5 Steps to Getting a Mortgage.

While the mortgage process can be daunting, we have broken it down into 5 easy steps to help you get started! Plus, Jennifer Koop, mortgage expert is happy to help guide you every step of the way so it is even easier to make your dreams of home ownership happen.

  1. Options: Your mortgage professional has access to 90+ lenders with dozens of solutions to suit your mortgage needs. During our initial consultation, your mortgage professional will review your situation and provide an overview of mortgage options that are best suited to your needs. From there, you can work together to complete your mortgage application and obtain financing.
  2. Collection: When it comes to a mortgage application, you’re required to submit the following items to the lender: credit report, agreement of purchase and sale(or estimated mortgage amount if you are refinancing), proof of income/employment, down payment amount, identification and solicitor information. Your mortgage professional is able to assist you with preparing, gathering and sending this documentation in.
  3. Submission: Your mortgage professional will submit your mortgage application to the appropriate lender with the mortgage product that best suits your needs. As they work with dozens of lenders from banks to credit unions to trusts and private options, they can put their negotiating power to work for you to get you the best mortgage product.
  4. Approval: Once you have been approved for your mortgage, you will be required to sign. From there, you will obtain approval documents including: payment details, mortgage terms and privileges, pre-funding conditions (if they apply). Should the closing date be more than 30 days away, your mortgage professional can also hold the approval documents and monitor the market. When you reach 4 weeks away from closing, they can help finalize the approval documentation.
  5. Closing: This is the final step to homeownership where your signed documents are submitted to the lender with all supporting information. From there, the lender will review and approve the final documents and send their instruction package to your lawyer. When you meet with your lawyer, they will require final identification and signatures, and review your closing costs.  It is on the closing day that the mortgage funds will be transferred to your lawyer to close the sale.

If you are looking to purchase your first home, or a new home, in the coming months, reach out to Jennifer Koop, Mortgage Agent, Huntsville Muskoka for the advice and expertise to ensure you get the best mortgage product for YOU.  Call today 705-349-0502

 

Published by the DLC Marketing Team

4 May

Make Your Mortgage Work for You

General

Posted by: Jennifer Koop

Make Your Mortgage Work for You.

When it comes to mortgages, it can be easy to get overwhelmed by the sheer number of options! Fortunately, we are here to help! Below are some of the mortgage details that you should understand to ensure that you are getting the best mortgage for YOU:

Interest Rate Type

Interest rate is one of the major components to your mortgage and it is important to decide whether you want a fixed-rate, variable-rate or protected (capped) variable-rate mortgage.

A fixed-rate mortgage is ideal for new home owners or those on a fixed income who are more comfortable with a stable monthly payment.

A variable-rate mortgage is ideal for individuals who have room in their budget and want to take advantage of potential interest rate drops – keep in mind, with this mortgage you pay more if the rates go up!

Lastly, the protected (capped) variable-rate mortgage operates similarly to variable-rate, except with a maximum (or capped) rate allowing you to take advantage of interest rate decreases while never paying above a set amount should the rates rise.

Amortization

This is the life of your mortgage and is typically a 25-years period whereby you would pay off the entirety of the loan. You can choose a shorter term, which would result in higher payments but allow you to pay less interest over the lifetime of your mortgage and be mortgage-free faster! Or, you can opt for a longer amortization period, which allows for smaller monthly payments.

Payment Schedule

This is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments. There are many great calculators on My Mortgage Toolbox app (available through Google Play and the iStore) that can help you calculate and compare these payment schedules to see what works best for you.

Mortgage Term

The standard mortgage term is 5-years and refers to the length of time for which options are chosen and agreed upon, such as the interest rate. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

Open vs. Closed

Open mortgages give you the option to increase mortgage payments or make lump sum deposits on your loan. A closed mortgage does not allow additional payments without penalties.

High Ratio vs. Conventional

A conventional mortgage is where you put the standard 20% down on your home. However, as not everyone is able to do this, many buyers will end up with a high-ratio mortgage product. High-ratio mortgages need to be insured due to financial institutions only being allowed to lend up to 80 percent of the homes purchase price WITHOUT mortgage default insurance. Therefore, if you choose a high-ratio mortgages over a conventional one, you will pay a monthly insurance premium.

Contact Jennifer Koop, mortgage expert, today at  705-349-0502 to get started on your homebuying journey with expert advice and solutions to suit YOUR unique needs!

Published by DLC Marketing Team

20 Apr

What is an Uninsurable Mortgage?

General

Posted by: Jennifer Koop

What is an Uninsurable Mortgage?

When it comes to mortgages, insurance is necessary to protect the lender on these types of loans, which deal in large sums of money. There are three different tiers relating to insurance, which all have different minimum down payment amounts and varying premium insurance fees.

  1. Insured mortgages typically have a less than 20% down payment and are insured with mortgage default insurance through one of Canada’s mortgage insurers: CMHC, Sagen or Canada Guaranty. In these cases, the premium is based on a percentage of the loan amount, which is added to the mortgage and paid monthly.
  2. Insurable mortgages typically have a 20% or higher down payment and do not require mortgage insurance, though they can qualify for it. In these cases, the homeowner wouldn’t have to pay an insurance premium, but the lender can if they choose to.
  3. Uninsurable mortgages do not meet mortgage insurer requirements; some examples of these types of mortgages can include: refinances, mortgages with an amortization longer than 25-years or mortgage files where the real estate is more than $1M in value and/or purchase price. No insurance premium required.

While insured and insurable mortgages are more common and typically more cost-effective when it comes to lending money, therefore clients who opt for these mortgages often get better rates.

When it comes to an uninsurable mortgage, this means that the lender is providing their own funds to the client without the protection of insurance, and have to commit to the loan for the entire term. Due to this, uninsurable mortgages tend to have higher interest rates as they are a higher risk loan.

Typically, uninsurable mortgages require a minimum of 20% down on the loan and are available for up to 30-year amortization. It is also important to note that an uninsurable mortgage will often require a higher Gross Debt Service (GDS) and Total Debt Service (TDS) ratio to indicate that you can carry the loan without high risk.

While some lenders may offer more flexibility when it come to an uninsurable mortgage, if you are looking to refinance or change to a longer amortization period, it is best to discuss with Jennifer Koop, Mortgage Agent, before making any changes to your mortgage.

Contact us today 705-349-0502

Published by DLC Marketing Team

20 Mar

Selling Your Home in the Spring

General

Posted by: Jennifer Koop

Selling Your Home in the Spring.

Are you looking to sell your home? We have a few tips to help you make the most of the spring season!

  1. Hire an Experienced Realtor: Before preparing your home for the Spring market, you will want to hire an experienced realtor! A good realtor will serve as your guide through the entire sales process, helping you get your home ready for listing, showing potential buyers and finalizing the eventual sale. This is even more important given the changing landscape in relation to additional safety protocols with viewings and even virtual viewing options. Now, more than ever, the expertise of a realtor will help you navigate the sales process.
  2. Prioritize Repairs and Improvements: Before listing your home, it is important to go through room-by-room and address any issues such as chipped paint, small holes in the wall, broken fixtures, old appliances, etc. Correcting these minor issues will help your home truly shine when buyers walk through.
  3. Clean and Stage Your Home: Now that you have made the necessary minor repairs, you can start staging your home! Start with the exterior of your home and ensure you tidy up the yard, remove any junk and wash your windows! When it comes to the interior of your home, you will want to declutter and do a deep clean (a professional cleaning service can come in handy for this!). Once your home is decluttered and clean, your real estate agent can help you stage it so that it appears spacious and inviting.
  4. Consider a Pre-Listing Inspection: Once you are ready to list your home, it can be a good idea to consider a pre-listing inspection. The inspector would conduct a complete visual inspection of all interior and exterior elements (including HVAC systems, wiring, ceiling, chimneys, gutters, etc.), which would help put prospective buyers at ease.
  5. Organize The Paperwork: There is a lot of paperwork when it comes to selling your home. Having all of these documents organized and together for potential buyers will help to speed up the process and allow them to address any questions before the deal is finalized. Permits, renovation or repair receipts, warranties, rental agreements and copies of your utility bills are all good records for potential buyers.

Whether you are looking to buy or sell, it is important to work with a trusted real estate and Jennifer Koop, Dominion Lending Centres mortgage expert in Huntsville, Muskoka to ensure the best outcome for you and your family!

Contact us today 705-349-0502

Published by the DLC Marketing Team

13 Mar

4 Financial Myths

General

Posted by: Jennifer Koop

4 Financial Myths.

Enriched Academy was launched back in 2013 after a successful appearance on the TV show Dragons’ Den by co-founders Kevin Cochran and Jay Seabrook. Although they would have loved to appear on the hit TV show MythBusters as well, fact-checking financial advice just didn’t have the mass appeal of learning whether one could survive on a desert island with only a pallet of duct tape.

Undeterred, Kevin and Jay set out to investigate the issue and educate the Canadian public about the most common financial myths out there. After many years on the case, here are their top four.

Myth #1: You need money to make money.
Careful investing is the secret to building wealth and you do need an income to get started, so this myth is not entirely untrue. However, what most people don’t realize is that the amount of money you need to make money can be surprisingly small. Financial guru Dave Ramsey’s research group found in their survey that 70% of millionaires never earned a 6-figure income. Former BC school teacher Andrew Hallam wrote an entire book devoted to how he leveraged a modest teacher’s salary with some basic investing principles to fund an early and very comfortable retirement. Check out his best-selling financial bible the Millionaire Teacher if you are wondering how he did it!

This myth is busted!

Myth #2: Money is too complicated.
Managing your money isn’t complicated, it just that having too little (or too much) leads to a lot of issues that make it seem complicated. Enriched Academy offers plenty of free webinars where you can easily pickup all kinds of financial knowledge with just one-hour of your time. While one short webinar may just get you started, the fact is that mastering a wide variety of money skills doesn’t take as much time or effort as many of the other things we spend time trying to learn. A lot of us spend more time learning how to use some app on our phone or make the perfect pasta sauce than we do learning how to manage our money.

The knowledge required to effectively manage your money is not difficult to learn — this myth is busted!

Myth #3: Investing is too risky.
It might be easy to say this one is true given the abysmal performance of most financial markets in 2022. Investing can be risky, but you can learn how to monitor and adjust your risk to suit your targeted returns, life stage, and other factors affecting your risk tolerance.

Your investing timeline also plays a huge role. Investing for the short-term is always going to be a lot more hit and miss than holding a well diversified portfolio of equities and other financial assets over a number of years. Financial markets have a long history of proven resiliency, and they will recover. Given current inflation and interest rates and the chance they will persist for some time makes investing and even greater priority these days

This myth is busted!

Myth #4: Earning money is more important than saving money.
Careful field research by an endless stream of bankrupt athletes, actors and reality TV has-beens has proven that when it comes to cash, “the more you earn, the more you burn!” The belief that more income is a sure-fire solution to your financial difficulties is busted! Carefully tracking your spending, making wise spending decisions, and adjusting your spending appropriately to “enjoy life more” as your income rises is the golden rule, regardless of how much money you are making.

Money myths can be debilitating and can put all sorts of mental obstacles in your path that just don’t need to be there. Financial literacy will help you separate fact from fiction and give you the right mindset to overcome whatever money beliefs may be holding you back.

For powerful personal finance education and training with immediate results, check out the complimentary livestreams each week from Enriched Academy. View the schedule and sign up for upcoming sessions on their events page.

For all your Mortgage needs contact us today 705-349-0502.

Published by DLC Marketing Team

9 Mar

10 “Must Know” Credit Score Facts

General

Posted by: Jennifer Koop

 10 “Must Know” Credit Score Facts.

If you are in the market for a home or a new car, you are probably very familiar with your credit score. Lenders are one of the primary users of credit scores and it can have a huge impact on whether you get approved for a loan and just how much interest it is going to cost you. What isn’t well known about credit scores is where they come from, what makes them go up (or down!) and who else besides potential lenders uses them to make decisions? Your credit score is going to be with you for life, so why not take a couple of minutes to get the facts.

  1. There are two credit-reporting agencies in Canada: Equifax and TransUnion. Your credit score may vary between the two. Lenders may check one or both agencies when you apply for credit.
  2. Your credit score is actually derived from the data in your credit report — which can be had for free once per year from Equifax and TransUnion. Some banks, credit unions, and other financial services companies provide your credit score for free as part of their services.
  3. Credit scores range between 300 and 900 with the Canadian average being 650.
  4. Your credit score is used for a lot more than just borrowing money; insurance companies, mobile phone providers, car leasing companies, landlords and employers may all require your credit score to make decisions.
  5. Five factors affect your credit score: length of credit history, credit utilization or how much of your limit you have used, the mix/types of credit you hold, the frequency you apply for credit, your payment history.
  6. Mistakes and omissions are not uncommon and is a good idea to check the details of your credit report. Both agencies have a process to report errors and get them corrected.
  7. Credit scores of 700+ are considered “good” and offer a higher chance of loan approval, greater borrowing limits, and lower or “preferred” interest rates and insurance premiums.
  8. Credit scores are continuously evaluated and adjusted. If you have “errored” in your past, the damage is not permanent! Your score can be raised/rebuilt by using credit responsibly (see #10).
  9. Checking your credit score regularly is a good idea and will help detect errors, monitor improvements, and identify fraud. This is a “soft” enquiry and will not affect your score.
  10. To increase your credit score: make payments on time, pay the full amount owing, use 35% or less of your available credit, hold a variety of credit types, apply for new credit sparingly.

Don’t make the mistake of ignoring your credit score. Even if you aren’t looking to borrow money anytime soon, there are a lot of reasons to keep an eye on it.

For powerful personal finance education and training with immediate results, check out the complimentary livestreams each week from Enriched Academy. View the schedule and sign up for upcoming sessions on their events page.

For all your mortgage needs contact Jennifer Koop, Mortgage Agent Huntsville, Muskoka today, 705-349-0502.

Published by DLC Marketing Team

29 Nov

Second Mortgages: What You Need to Know

General

Posted by: Jennifer Koop

Second Mortgages: What You Need to Know.

One of the biggest benefits to purchasing your own home is the ability to build equity in your property. This equity can come in handy down the line for refinancing, renovations, or taking out additional loans – such as a second mortgage.

What is a second mortgage?

First things first, a second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. This is not the same as purchasing a second home or property and taking out a separate mortgage for that. A second mortgage is a very different product from a traditional mortgage as you are using your existing home equity to qualify for the loan and put up in case of default. Similar to a traditional mortgage, a second mortgage will also come with its own interest rate, monthly payments, set terms, closing costs and more.

Second mortgages versus refinancing

As both refinancing your existing mortgage and taking out a second mortgage can take advantage of existing home equity, it is a good idea to look at the differences between them. Firstly, a refinance is typically only done when you’re at the end of your current mortgage term so as to avoid any penalties with refinancing the mortgage.

The purpose of refinancing is often to take advantage of a lower interest rate, change your mortgage terms or, in some cases, borrow against your home equity.

When you get a second mortgage, you are able to borrow a lump sum against the equity in your current home and can use that money for whatever purpose you see fit. You can even choose to borrow in installments through a credit line and refinance your second mortgage in the future.

What are the advantages of a second mortgage?

There are several advantages when it comes to taking out a second mortgage, including:

  • The ability to access a large loan sum (in some cases, up to 90% of your home equity) which is more than you can typically borrow on other traditional loans.
  • Better interest rate than a credit card as they are a ‘secured’ form of debt.
  • You can use the money however you see fit without any caveats.

What are the disadvantages of a second mortgage?

As always, when it comes to taking out an additional loan, there are a few things to consider:

  • Interest rates tend to be higher on a second mortgage than refinancing your mortgage.
  • Additional financial pressure from carrying a second loan and another set of monthly bills.

Before looking into any additional loans, such as a secondary mortgage (or even refinancing), be sure to speak to your DLC Mortgage Expert, Jennifer Koop! Regardless of why you are considering a second mortgage, it is a good idea to get a review of your current financial situation and determine if this is the best solution before proceeding.

28 Nov

Selling Your Home in Winter

General

Posted by: Jennifer Koop

Selling Your Home in Winter.

While you might think selling your home in winter is harder, with the right considerations it doesn’t have to be! When selling your home during warmer months, the focus is typically on curb appeal and gardening, as well as having bright colors and patterns to draw out different rooms.

While curb appeal should not be forgotten in winter months, the focus should be centered on creating a warm, comfortable and welcoming space. You can do this through the following:

  1. Curb Appeal – If you live in an area that receives high amounts of snow, be diligent about keeping your sidewalk and driveways clear for visitors, and to keep your home looking clean for viewing. Always make sure to sweep any fallen leaves or debris.
  2. Keep it Cozy – Ensuring your home is sufficiently heated during showings will also go a long way to making it feel more comfortable; a steady 20 to 22 degrees Celsius during showings is ideal.
  3. Light and Inviting – With days being shorter and darker during winter, ensuring your home is light and inviting can make a big difference. In some cases, you may consider repainting the walls before listing your property.
  4. Declutter – When selling, it is important to declutter your home so that it looks its best and gives room for people to imagine their own belongings in your space.
  5. Define Property Boundaries – If you are showing your home in the middle of snow season, be sure to mark the four corners of your property so that potential buyers can see exactly what they are getting.

While there is some extra work with selling your home in the winter due to the weather conditions, it can pay off! Buyers tend to be highly motivated and often there is less competition for sales during this time giving more focus to your home.

Ask us about Realtors in our area, we would be happy to direct you to someone that would be just right for you.