Services

PURCHASE

Purchasing your first home is an incredibly exciting and also a daunting experience. You’re not sure of the process, where to start, what to do. I remember purchasing my first home and I didn’t have a clue where to begin. We also struggled financially for years because we just weren’t aware of all the costs involved in carrying a home. I wish someone had taken the time with me to explain the ins and outs of mortgages and owning a home. Because of these personal experiences, I love working with First Time Home Buyers to help you get started on the right path now and in the future.

Whether you are purchasing your 1st home, your next home, purchasing an investment or vacation property, I will act as your guide from the point of taking your mortgage application until the day you get the keys to your new home!

FIRST TIME HOMEBUYERS

Isn’t it exciting, you are looking to purchase your 1st home!  This will probably be the largest investment you will ever make.  You need to take some steps to prepare you for this new venture.  I specialize in educating my clients by providing all the facts to assist them in moving in the right direction towards Home Ownership.

The first thing is to prepare a budget and find what amount is comfortable for you taking into consideration the mortgage payment, property taxes and utilities on the home.  We will also discuss your source of income; where you work, your monthly income and your amount of down payment along with your credit history.  If there is anything derogatory on your credit rating, we can work on correcting any credit blemishes.   Once we know your comfort level, we can prepare a pre-approval so you can confidently go out looking for your home in a specific price range.

As a first-time homebuyer, there are a few programs/benefits available to you:

  1. The Home Buyers’ Plan (HBP) – allows first-time homebuyers to withdraw funds from your RRSP, individually $25,000 or $50,000 with a spouse tax-free.   You must repay all withdrawals to your RRSP’s annually within 15 years
  2. First-Time Home Buyers’ Tax Credit – can claim a tax credit of up to $750 on their income tax.  Reference:  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html – q1
  3. GST/HST New Housing Rebate – you may qualify for a rebate based on your purchase price or cost of building your new home.

Reference: http://www.cmhc-schl.gc.ca/en/co/buho/buho_009.cfm

COSTS AND FEATURES
■ For 1-2 units up to 95% financing: For 3-4 units up to 90% financing
■ Maximum amortization: over 80% financing, 25 years: under 80% financing, 40 years
Property must be suitable for year-round occupancy, properties on an island must have year-round bridge or ferry access
■ Time-share interests, life leases and properties in rental pools are not eligible
■ Maximum Purchase Price: $1,000,000
■ Must be intended to occupy property within the year by the borrower or a relative of the borrower, rent free basis
■ Credit Score: 650-680 GDS/TDS: 35%/42%: over 680 GDS/TDS: 39%/44%

 

FAMILY PLAN PROGRAM

This program enables people to help buy a home for immediate family members who have good credit but lack the income to meet the necessary debt servicing requirements.

■ A parent helping a child buy a home
■ A parent helping an adult child while studying at a post-secondary education facility
■ A child helping their elderly parents buy a home who are on a fixed income
■ This program does not include the purchase of non-owner occupied investment properties
■ Applicants buying a home for a family member must have clean credit, stable employment and income, positive net worth and a down payment from their own resources.

COSTS AND FEATURES
■ For 1-2 units up to 95% financing: For 3-4 units up to 90% financing
■ Maximum amortization: over 80% financing, 25 years: under 80% financing, 40 years
Property must be suitable for year-round occupancy, properties on an island must have year-round bridge or ferry access
■ Time-share interests, life leases and properties in rental pools are not eligible
■ Maximum Purchase Price: $1,000,000
■ Must be intended to occupy property within the year by the borrower or a relative of the borrower, rent free basis
■ Credit Score: 650-680 GDS/TDS: 35%/42%: over 680 GDS/TDS: 39%/44% 

REFINANCING/ RENEWALS/ PRIVATE MORTGAGES

There are many reasons that you may want to refinance your home to enable you to take advantage of the equity that you have built up and to obtain lower interest rates on your mortgage.  This process is referred to as an “equity take-out.”  Regardless of your income situation or blemishes in your credit, we have lenders who lend strictly against the equity in your home.  Common reasons could be: 

■ Debt consolidation
■ Self-Employed
■ Divorced
■ Widowed
■ Illness
■ Bridge Financing
■ Second properties
■ Home equity lines of credit available
■ Revenue Canada arrears
■ Bankruptcy
■ Investment or retirement planning
■ Home renovations
■ Unexpected expenses
■ Investment into your business
■ Alternative mortgage solutions

 

FEATURES: 

■ Refinance to a maximum of 80% of the value of your home, renovation loans with multiple advances are acceptable (maximum 4 advances).
■ Maximum 4 units and 1 unit must be owner occupied.
■ Secondary Homes up to a maximum of 2 units.

I can work out all the calculations and let you know what interest rate you can expect to receive, the monthly payment and how much money you should save on a monthly basis.

 

MORTGAGE RENEWALS/SWITCH

Typically when you receive your renewal documents from your lending institution, they will not quote you the best rate available.  They hope that you will just sign and return the renewal forms and be done with it.  Now, is that any way to treat a client?  I can switch your mortgage to another lending institution at the best-discounted rates at no cost to you.  As your mortgage is now considered “fully open”, there won’t be any penalties. 
Make sure you take care of your finances and get the great rate that you deserve.

 

WHAT IS A PRIVATE MORTGAGE:

You need to consolidate your debts but you are not showing any income or your credit rating is so poor that none of the financial institutions will lend you the funds.  Our best option may be to borrow the money from a private person that lends their monies in the form of private mortgages.  That is someone like you or I that is looking to receive a higher rate of return on their investment.  The rate is definitely higher than 1st mortgage rates but definitely nothing close to what you are paying on your credit cards.  Your interest rate is based on the risk involved.  Call me with your details and I can give you a quote on the cost of the financing. 

PRIVATE LENDERS:

When dealing with a private mortgage, the capital is not borrowed from a financial institution or a bank. The money is borrowed from an individual or a corporation. 

That is why before investing in a private mortgage you should consider the following: 

■ A private mortgage should always have proper documentation. Put together the loan agreement in a way that it will always protect the interests of both parties, which includes the lender and borrower.
■ For paperwork use the help of a lawyer, your tax accountant or a mortgage agent with experience who can help you with the process. There are websites that also provide information on how to make contracts for private mortgages. It is a good practice to research these sites and use them as a guide to assist you in preparing your mortgage agreement.
■ Include every aspect of the deal in the mortgage agreement ie when payments are to be made. What happens if or when payments are not received on the specified date, where and how are payments to be made, is it possible for the borrower to repay any portion of the mortgage with or without a penalty.
■ It is a good practice to secure the loan using assets that are worth the loan amount especially if the loan involves a friend or a family member. By doing this, if you happen to run into other difficulties with finances, the property or asset will have a lien on it and creditors cannot go after it. 

BANK TURN DOWN

Have you ever been declined for a mortgage?  It feels horrible.  It brings up those ‘not good enough’ feelings and makes you feel unworthy.  I have worked with many clients in this position and I offer them alternative financing so they can move forward with their life, their finances and start a savings program.

Getting turned down by the banks these days is far more common place then it was decades ago. With tighter rules, not everyone can fit the formula to get approved at the banks.

The most common reason for being turned down is an applicant’s credit score with the second biggest reason being your source of income.  Possibly you are on commission, own your own business and do not show the income necessary to carry your mortgage and other debts.  Possibly you are carrying too much debt.  I can provide you with alternatives and options and possibly arrange a 2nd mortgage to consolidate all your debt to improve your overall credit score.  In the process, you will receive a far more attractive interest rate and reduce your monthly payments.  I look at the whole picture and find you the best alternative and options to help you get back on track.

Possibly you would like to start saving towards purchasing a home.  The first thing you need to do is eliminate your debts to start your savings.

Get Some Help:  If your debt situation is too overwhelming to deal with alone, contact a non-profit credit counselling service that can help you with your strategies.  Credit Counsellors can contact your creditors and have them either reduce or eliminate the interest you are paying.  If you can’t manage that, the next step is to see a bankruptcy trustee.  If you are not sure what to do, I am very experienced in this area and can give you some direction.

DEBT CONSOLIDATION

We all go through periods where we are balancing multiple debts, mortgages, interest rates and payment schedules each month.  It is becoming more difficult each year as we see less and less of our income but our expenses keep going up.  It is getting harder to save money, harder to save for our retirement and our future.

It is becoming the norm is max out our credit cards in order to cover all these costs.   The problem is after we consolidate all of that outside debt and if we don’t change our spending habits, then a couple of years down the road, we are in the same situation.

Signs you have a debt problem:
■ Refusal to acknowledge debt
■ Don’t ask and don’t talk to anyone about money
■ Using one credit card to pay off another
■ Spending your emergency money while promising to pay it back later
■ Using your overdraft as a backup while you wait for your pay cheque
■ Utilizing pay day loan companies
■ If you only make minimum payments on your credit cards, it could take up to 70 years to pay off your credit cards
Using credit cards or loans for consumption purposes

One of the best ways to take control of your debt is to take out a debt consolidation mortgage.  This loan is based on the equity in your home and you are able to borrow money against your home at a much lower interest rate to pay off your multiple sources of debt.  With a lower interest rate, you will automatically begin to pay off your debts faster.

What is the solution?  We need to budget, we need a plan and we have to stick to it.  It’s not easy, for sure but we have to get control of our lives.  Understanding your financial picture will help you reconcile what you want with what you can actually afford.

Let me give you some examples of how much money you could save on a monthly basis, you will be amazed!!

DIVORCED

SITUATION:
Divorce is stressful emotionally, mentally, physically, and can cause financial difficulties. During a divorce, you and your spouse will be forced to make and accept decisions that have a major impact on your current and future financial situation and security.

One of the major assets that couples share is their home. Handling your mortgage correctly in the divorce will help you and your ex go your separate ways on the right foot financially.  Selling a house and moving is time consuming, stressful and expensive.  It also further disrupts your family and may involve your children having to change schools and friends.

One of the most difficult things in a divorce is deciding who will be responsible for any debt the couple has incurred during their marriage. In order to do this, you’ll need to know how much you owe.  Run a credit check from each of the credit reporting agencies. People have been known to run up debt without their spouse’s knowledge, especially when they’re contemplating leaving the marriage.

 

OPTIONS:
Separate your joint accounts as soon as possible.  Emotions may be raw while working through a divorce but refusing to pay joint bills including your mortgage payment will hurt both parties.  Recent slow or missed payments will make it either very expensive or very difficult to qualify for a mortgage.

If all or most of your credit has been in your spouse’s name, get your own accounts as quickly as possible as you will require a credit history as one of the qualifications in getting a mortgage.  You will also need to have all your financial obligations clearly understood to obtain a mortgage so complete your separation/divorce agreement as a matter of priority.

If you are not going to sell the property and wish to buy out your former husband/wife’s share of the matrimonial home, the first step is to agree on the property’s current market value.  You will need to hire an appraiser and with this valuation, agree on the value of your home.  The net equity in the home can then be calculated by subtracting any debts secured against the property along with any costs that would be incurred to sell the property.

 

REQUIREMENTS:
The spouse that wishes to purchase the property must be able to qualify for the mortgage to payout their former spouse’s equity plus the existing mortgage and qualifying on a single income can be difficult.  To calculate your annual income, include your alimony or child support payments as these amounts can be added to your employment income. Conversely, if you are responsible for making these payments, these payments will form part of your ongoing expenses.

Your finances always require careful attention but this is especially true during divorce because decisions made now will affect your financial well-being for the rest of your life.  There are ways you can be prepared, and they’re all part of establishing (and then maintaining) a solid financial foundation for yourself –and your children.  Call me if you would like further information as I work with a number of divorce specialists that can help with this process. 

WIDOW/WIDOWER’S

I am also a widow, so totally empathize when we lose our partner all the many emotions that must be dealt with.  All the stages of grief, all the decisions that must be made.  Then trying to make the right decision of what to do for you and your family.  Things like you should sell your home.  On top of this, your spouse took care of all the finances and you have no idea what your payments are, how much money you have or owe, how to do the banking.  To say that the situation is overwhelming is an understatement.

What you need is some help and a plan.  Make a to-do list of everything you need (assets/liabilities/insurance).  The first thing to do is get all your financial information gathered in one place.  Now you will know what you own, owe, your income situation (you will also be receiving a widow/er pension).  Now you will need a budget to outline all your monthly expenses.

Depending on how much life insurance and other survivor benefits you may be entitled to, how much money you are earning or how much you can earn if you go back to work, the amount of your fixed monthly expenses, you may have to make some difficult lifestyle adjustments. This might include downsizing your home in order to reduce your expenses.

You may need to do a debt consolidation mortgage to make your payments more affordable or possibly rewrite your mortgage to get a better interest rate.  I can honestly say that in all the widowed people I have worked with, they have all remained in their homes, at least for the short term until they made the decision to sell and move as opposed to the necessity of having to move.  They had been through enough trauma without the thought of having to get their home ready to sell and finding a new place to live.  I certainly know that was the last thing I wanted to do was to look for a new place to live and take my children out of their school and away from their friends and support system.

With the combination of my banking background, personal experience and my expertise in financing, I can help you through this process and supply the options and alternatives available to you by leveraging the equity in your home. 

SELF EMPLOYED INDIVIDUALS

Individuals who own their own business, contractors or on commission fall under a different category than people working for a company or corporation on a salaried basis.  These individuals also enjoy certain advantages by minimizing their net income and maximizing their allowable tax deductions and therefore fall under a different category called “Self Employed.”  Generally speaking, the banks don’t like people in the self-employed category.

It is more difficult to get traditional financing because they are unable to provide the necessary income verification.  If you have a proven 2-year history of managing your credit and finances responsibly, financing at discounted rates are still available.

There are numerous products available as I have strong relationships with a number of different lenders, therefore a discussion of your particular circumstances would be necessary to create the ideal scenario for your situation.

NEW TO CANADA PROGRAM

You have made Canada your new home and now you are looking to purchase a home of your own.  Qualified homebuyers who have immigrated or relocated to Canada within the last 5 years are eligible under the New to Canada Program to purchase a property with as little as 5% down payment.  The most difficult obstacle for new immigrants is to prove their credit history.  If you do not have any credit in Canada, there are ways to prove your credit worthiness via your bank statements.  You can confirm the timeliness of your payments on your rent, utilities, cell phone, insurance etc.  We can also obtain a credit report from your country of origin.  I strongly recommend that you start to establish your credit as soon as possible; I can help you with this process. 

Take a look at http://mortgagesbycolleen.ca/frequently-asked-questions/ or

http://mortgagesbycolleen.ca/resources/ to assist you in finding helpful information in purchasing your new home.

INVESTMENT PROPERTIES

Ordinary Canadians have done very well in expanding their personal net worth through investing in rental properties.  It is also a great way to build your nest egg for retirement.  There seems to be a steady supply of renters in the Toronto and GTA areas, just make sure you do your due diligence before approving any tenants and I can give you some suggestions in this regard.
Should you purchase a non-owner-occupied property, you will require a 20% down payment.

This program does not cover the following properties:
■ Commercial zoning
■ Rooming Houses
■ Rental Pools
■ Time-share Interests
■ Quarter Share/Shared Ownership

Secondary Homes:  Purchases:  95% LTV.  Maximum 2 units where 1 unit must be owner occupied or occupied by an immediate family member (same insurance premiums as listed above).  Maximum property value $1,000,000.  Foundation must be permanent (includes concrete blocks), co-ops excluded, year-round access serviced roads, must be winterized, drinkable water from a well or cistern, lake or river water provided it has its own filtration system.

Vacation Homes:  Purchases:  90% LTV.  Same as above except maximum 1 unit, property need not be winterized, seasonal access permitted, no permanent heat source is required, seasonal road use is acceptable, water source need not be drinkable but must have running water, boat access only is acceptable.  (Insurance premiums will be higher than premiums previously cited).  Maximum property value $350,000

 

VACATION OR SECOND HOME

Have you always dreamed of having your very own get-away in the country or by the lake or possibly a ski chalet to relax and enjoy with your family and make years of wonderful memories?  The appeal of owning a vacation retreat is not just an emotional investment; it is also a financial investment.  There are a number of ways to help you attain your dream.
You can own 2 properties under the CMHC or Genworth Insurance Program.

If your property is not accessible with year round road access, then we can look at financing 80% of your purchase price.  Call me today to discuss your options.