August 16, 2018

New To Canada Mortgage Rules

I have had a number of enquires recently on whether the New To Canada Program requirements have changed.  Individuals that have immigrated or relocated to Canada within the last 5 years can purchase a property with as little as 5% down payment.  Here is the criteria in order to qualify for a mortgage:

  1. Purchase price must be less than $1,000,000
  2. Under $500,000 you can purchase with 5% down payment
  3. If the property is between $500,000 and under $1,000,000, you can purchase with 5% on the first $500,000 and 10% on the portion over $500,000
  4. Maximum 2 units with 1 unit being owner occupied
  5. Maximum 25 year amortization
  6. Minimum 3 months full time employment in Canada (transfers under a corporate relocation program are exempt)
  7. Strong international credit report and/or 2 alternative sources ie rental payment history or hydro/utilities etc
  8. 5% of down payment must come from own resources and not a gifted down payment
  9. Must have immigrated to Canada within the last 5 years
  10. Must have a valid work permit or obtained landed immigrant status
  11. No Guarantors permitted
  12. Foreign Diplomats who do not pay tax in Canada are ineligible for this program
  13. This program is not available for Business For Self Alternative financing or Investment Properties

If you would like further information, please call me directly!

Colleen Saunders is a 25 year veteran in the mortgage industry serving Oakville, Burlington, Mississauga and Toronto and offering all mortgage related services such as 1st & 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Paying Down Debt vs RRSP Investment?

It has always been a dilemma of whether you should use any excess cash to contribute to your RRSP or pay down your mortgage.  The current economic equation has recently tilted in favour of paying down debts vs. building up assets but only for those people with a low tolerance for any investment risk.  The current interest earned from GICs, term deposits and government bonds remains pathetically low.  At current deposit rates of around 1%, it takes 72 years to double your retirement nest egg if you only earn 1% per annum.

Here is how to think about the trade off between paying down your mortgage versus saving in your RRSP.  Every dollar you don’t contribute to your investment portfolio will earn the mortgage rate you are paying on that dollar.  If your mortgage is costing you 3%, then every dollar you don’t invest but instead use the money to pay-down debt will earn the said 3%.  If you are paying 10-23% like on many credit cards, the argument to eliminate the debt is even stronger.

Of course, if your investments are invested aggressively under the expectation that they will earn more than the mortgage rate you are paying, then you can justify not paying down your mortgage.  After all, borrowing at 3% makes sense if you expect to earn much more.

To quote the Review of Financial Studies “Households with high interest debt have a reduced benefit to equity participation and in many cases should not own any stocks…repayment of outstanding debt almost always yields a higher rate of return than many of the safe (investment) assets.”

Look at both sides of your balance sheet at the same time.  Add up all your debts and compare the interest cost of all your liabilities against the interest you will be earning on your retirement investments.  If the former is greater than the latter, it is time to pay down some debt and forgo the investment plan contribution.  Oddly enough, not contributing to your RRSP might make you wealthier in the long run.

Colleen Saunders is a 25 year veteran in the mortgage industry serving Oakville, Burlington, Mississauga and Toronto and offering all mortgage related services such as 1st & 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Sometimes Debts Are Strictly Due To Family Illness

Last week I outlined an example of a client I am working with that can no longer meet his financial obligations.  This happens to many of us for various reasons.  Below are 2 testimonials from clients I have worked with where debts spiralled due to illness in the family.

“When my husband became ill, we fell behind in all our payments, we didn’t know what we were going to do. Colleen was recommended to us and she arranged a private mortgage for us and not only paid out all our debts but actually reduced our monthly payments. We thank the day we met Colleen as she literally saved our lives. There was no way we could move with my husband’s condition and the stress we were living under was delaying his recovery. When everyone else gave up on us, Colleen believed in us and we will be forever grateful.” FK

“My wife was going thru chemo and we got behind on our payments, as the very expensive drugs required were not covered under our plan. Our financial planner referred us to Colleen and she was able to consolidate all of our debts into our mortgage after our Bank turned us down. With everything else we were dealing with, our debts and mortgage were not high on our priority list, so Colleen took care of everything for us. I don’t know what we would have done without her thoroughness and compassion during this horrible stage of our lives.” SF

Financial stress impacts all aspects of our lives.  I work very closely with my clients in a confidential and non-judgemental way to alleviate this stress.  I take great pleasure in helping people with their goal to work their way back to financial security!

Colleen Saunders is a 25 year veteran in the mortgage industry serving Oakville, Burlington, Mississauga and Toronto and offering all mortgage related services such as 1st & 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Do You Know Someone That Needs Financial Assistance?

The holidays are over and now the credit card bills start coming in.  Prior to the holidays, statistics state that a majority of consumers  credit cards were already maxed out.  Add on gift buying and you have financial worries about how you are going to make all your payments.  This is a very stressful time of year for many people.

I work with many clients who can no longer meet their monthly obligations due to their debt load.  Between their mortgage payment, property taxes, utility bills, loan payments and credit cards, there just isn’t enough monthly income to cover all the expenses.

I had a referral last week that looked list this.  Client has $50,000 in credit card debt plus the mortgage and is on disability and pension income.  The first thing I do is look at the existing mortgage and if we were to refinance the mortgage, what would the penalties be to break the mortgage and what rate can we expect to receive compared to what the client is currently paying.  Build in the rates being paid on the credit cards, I do a profitability analysis and determine what is in the clients best interest.

In this particular scenario, the mortgage is up for renewal within the next 3 months so the penalties will be nominal.  I will be refinancing the home, paying off all the debts and the client will then be able to afford all the monthly obligations.  As the debt servicing will still be very tight, I will work with my client to establish a budget and hopefully a savings plan so we don’t get back into high interest rate credit cards again.

It gives me such pleasure to see the look of relief on clients faces when they know they will sleep better tonight without worrying about their finances!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Bikers Escort Bullied 10 Year Old To School

Bullying is a huge problem today.  I came upon this article and thought what a beautiful message to share to start off the 2018 New Year.

Xander’s mother said her son, who is indigenous, has been the target of racial slurs, insults about his looks and even death threats by other students.  The recent spate of teen suicides in Nova Scotia, with three young people dying by suicide in a span of six months, made the mother concerned for her child’s safety.

Imagine the 10 year old in Nova Scotia being depressed from being bullied every day at school and arriving to school flanked by two lines of tough-looking bikers clad in leather delivering the message ‘bullying is not okay’.  Xander’s said “It’s good, because I think from me getting all this help and support, I can also spread it to help others.”

If Xander can reach out and make a difference knowing he has the support of his new biker friends, think of the opportunities that arise every day where we could support any person that is being bullied, depressed or just lonely.  All we need to do is reach out and we could all make a world of difference.

https://www.ctvnews.ca/canada/bikers-escort-bullied-10-year-old-boy-to-school-1.3469184

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406