Using a Mortgage Alliance Broker

5 Reasons Why it Pays to Use a Mortgage Alliance Broker


1. Specialist vs. generalist. Mortgages aren’t a sideline for brokers, as they are with some bank reps. As specialists, brokers fully understand mortgages, study rate markets, talk to lenders on a daily basis and keep abreast of the latest product developments. Plus, they’re seasoned negotiators so they can help make sure you get the best available rate from lenders.

2. More choices. Mortgage brokers aren’t dedicated to a single lender, so they can offer the full spectrum of mortgages from virtually any lender on the market. No matter what you need, a broker can access it, explain it and make sure it’s priced right for you.

3. Brokers make lenders compete. Mortgage brokers shop your application to a wide range of lenders and get them to compete for your business. When lenders know there are several others in the running, they offer their best rate and features right up front.

4. Unbiased advice. As independent business people, mortgage brokers don’t have allegiance to a particular lender. So their expert advice is in YOUR best interest instead of the lenders’.

5. Save time and energy. Shopping for mortgages can be time consuming and frustrating if you do it yourself. Mortgage brokers can shop dozens of lenders in the time it takes you to book a single appointment at your bank. And all that choice helps ensure you’ll save money too!

When the time comes that you need new or revised financing, call me for a free consultation at (905) 529-1199 so we can explore all your options. If your friends or family are looking for advice too, please pass my contact info on to them – I appreciate your referrals! Don’t keep me a secret!

Lisette Amalfi Harris, AMP
Senior Mortgage Consultant/Owner
Mortgage Alliance o/a OAC Mortgages Inc
(905) 529-1199
TF: (877) 529-1199

How to Fix Errors on Your Credit Report

Mortgage lenders give their best rates to customers with the highest credit scores. But what if your credit score is low because of errors on your credit report? The best way to prevent this is to check your report regularly—especially when you’re thinking about buying—and correct any errors.

Here’s how:

• Order your credit report. Since there are two main credit agencies in Canada—Equifax and TransUnion—it’s wise to check with both. You can get a free credit report by mail or in person. Or you can download one immediately for a fee. Visit Equifax.ca or TransUnion.ca for details.
• Examine the report. Circle any items you believe are incorrect.
• Contact the credit agency. There’s often a form on its website which you can use to provide details. Return the form by registered mail along with all necessary documents. It’s also a good idea to contact the creditor whose item is in dispute.
• Request a revised credit report. The credit agency will investigate, contact your creditors to verify information, and revise your report as necessary.
  

Not only can checking your credit report potentially increase your credit score, it can also detect and prevent any attempts to steal your identity. As your mortgage advisor, remember that I’m always here to help with any questions you might have about your credit or your mortgage.

Lisette Amalfi Harris, AMP
Senior Mortgage Consultant/Owner
Mortgage Alliance o/a OAC Mortgages Inc
(905) 529-1199
TF: (877) 529-1199

Mistakes to Avoid When Buying a Vacation Home

Thanks to aging Baby Boomers, the market for vacation properties is hotter than ever. But before you start shopping, here are some things to consider.

Location. Obviously, it’s got to be in an area you love. But make sure it’s also easy to get to. If it’s more than three hours away or involves bad roads or unpleasant boat trips, chances are you won’t use it often.

Reason you're buying. If you are buying for personal use, buy where you want to be. If you’re buying for capital appreciation, look for local market growth potential. And if rental income is the goal, make sure the property’s in a popular area.

Seasonality. If your property depends on seasonal recreation, keep in mind that you’ll occasionally be disappointed. Ski cabins can suffer through snowless winters, and beach houses are prone to rain. Also, make sure roads are plowed year-round and ferries run in the off-season.

Cost. Obviously, a lot in the woods is less expensive than a beachfront condo. But building on your lot isn’t necessarily cheap (count on about $150 per square foot). And even if you buy an existing cottage, there are ongoing costs for maintenance, repairs, taxes, supplies, and insurance. Renting when you’re not there or fractional ownership can reduce the cost, but they can also impact financing.

Financing. In the past, purchasing a vacation home meant higher interest rates and less flexibility. But today, specialized lenders offer vacation home mortgages at mainstream rates, and if you have strong credit, you may even qualify for 5% down. However, many of the most affordable mortgages require year-round access and well/septic systems, and they don’t cover rental properties or fractional ownership.

Are you thinking about buying a vacation home in the next 12 months? If so, I invite you to call me so we can determine if this is the right time to buy, what type of properties fit within your budget and whether or not it’s worth the investment. As your mortgage professional, I have access to a wide range of vacation home mortgages and can provide you with the advice you need to avoid costly mistakes. Call me today at (905) 529-1199!

Lisette Amalfi Harris, AMP
Senior Mortgage Consultant/Owner
Mortgage Alliance o/a OAC Mortgages Inc
(905) 529-1199
TF: (877) 529-1199

Self-employed? Mortgages are Easier Than Ever!

More Canadians than ever before - almost 20% of workers, according to Statistics Canada - now fall into the category of self-employed. Until recently, it could be difficult to obtain a mortgage if you weren't on a company payroll. But lenders and mortgage insurers are responding to the unique needs of the self-employed, resulting in more options than ever before.

Easy does it

You may be surprised to learn how easy it can be to obtain a mortgage for a primary residence, as a self-employed person.

You will also discover that you have the choice of most options in the marketplace, with terms of up to 40 years, fixed- and variable-rate mortgages, and ever high-ratio, insured mortgages.

What's changed: income statements

Most notably in recent years, many lenders have loosened their documentation requirements for stating self-employed income. While qualifications vary, most mortgage products currently on the market have a few minimum requirements.

• You must have been self-employed in the same line of work for at least two years. Proof required: Business licence or articles of incorporation; income tax returns; statement of business activities; or financial statements.
  
• You must have a good personal credit history. Proof required: A standard credit check.


• You must have no tax arrears outstanding. Proof required: A recent Canada Revenue Agency Notice of Assessment.

As well, some lenders require that the property meet certain conditions, and most will need a property appraisal to confirm value.

As your mortgage professional, I have access to the widest range of lenders that offer financing solutions for the self-employed. Let's discuss your needs to find exactly the right product for you.

Lisette Amalfi Harris, AMP

Are You Ready for Tenants in Your House?

Consider the pros and cons before renting out a part of your home...

Pros

• Room to grow as your family expands and changes
  
• Extra income
  
• Improved cash flow
  
• May enable you to buy a bigger house

Cons

• Less privacy and possible sharing of facilities


• Income is taxable


• Paperwork and responsibilities


• May add to the cost of the house and taxes

Are you Ready for Tenants in Your House

If you're shopping around for a house, you may, like many Canadians, be thinking about buying a property with a rental unit.

While renting our part of your home appears to be a foolproof financial strategy, there are several things you should be aware of before you decide to have tenants in your home.

Painting the financial picture...

Some people assume that having a unit to rent out will automatically help them qualify for a mortgage.

Whether or not this is the case could depend on several factors, such as location, the legal status of unit, and if there is a current tenant. Each lender has its own documentation requirements and calculations regarding how rental income is factored into an application.

On the flip side, while a rental apartment may help you pay the mortgage, it may also increase both the purchase price and property taxes. So your monthly payments may end up higher than those for a similar home down the street without a rental unit.

When crunching numbers, estimate the hard costs of renting, such as the additional draw on utilities, repairs, and maintenance, and income tax payable (though expenses can help offset this).

Balancing the benefits...

Take the less tangible "soft cost" into account, such as the time you'll spend managing administrative tasks and making repairs.

How do you feel about the potential loss of storage space, reduced privacy and interuptions such as the inevitable knock on the door when the plumbing springs a leak in the middle of the night? You may also need to share facilities such as laundry, the backyard, or paking space.

Remember too, that, landlords have legal obligations, which involve respecting the tenant's rights and responsibilities and ensuring the unit meets local zoning bylaws and fire and safety codes

The long-term plan

Many people find the long- and short-term benefits so appealing they are willing to make these sacrifices. Certainly, a monthly cheque can be a welcome addition to the household cash flow.

Moreover, choosing a property with a rental unit could help you buy a bigger house than you might otherwise afford. While that extra space is being occupied by someone else for the time being, it may provide extra room down the road for a growing family, a private getaway for teenagers, or a haven for aging parents.

If you're considering purchasing a home with a rental unit, talk to me before you sign. I can arrange financing with a lender who will help you achieve your unique homeownership goals.

Lisette Amalfi Harris, AMP
Senior Mortgage Consultant/Owner
Mortgage Alliance o/a OAC Mortgages Inc
(905) 529-1199
TF: (877) 529-1199

Tempted By a New House?

Buying a newly built house has its own unique rewards, but it is different from buying a resale house. A little homework can help you make a choice that you'll be happy with.

Know the builder. Research the builder's reputation and track record. Ask for references. Find out whether they are members of the Canadian or local Home Builder's Association. Check whether they belong to a provincial new home warranty program and investigate their warranty record. Look at the model home in careful detail for quality and workmanship.

Investigate the area. Check out the location of schools, transportation links, medical services, shops, recreation, and park land in the neighbourhood. Inquire with the local municipality about future developments that may change the area's character.

Detail the costs. Be prepared for several costs in addition to the base price of the home and lot, plus the transaction and closing costs. These include: the cost of any upgrades; fees for services such as utility hookup and tree planting; local municipal charges to cover infrastructure, development applications, and permit fees; and GST. (Homes under $450,000 are eligible for a partial GST/HST rebate) Ask your builder to list all charges and when they're due.

Review the documentation. Make sure you understand the terms of the Agreement of Purchase and Sale. Have your lawyer review it, together with any warranties. A one-year warrantly to protect against defects in work, materials, and major structural elements is common. Ideally it should include deposit and completion insurance. In B.C., Ontario, and Quebec, third-party warranties are also mandatory.

Confirm the timing. Ask for written confirmation of start and completion dates, and ask what happens if construction falls behind. Make sure you have the name of a contact person, and find out whether you may visit your new home while it's being built.

If you're considering a new home purchase, I can help ensure that your financing arrangement can cover all the costs associated with new developments.


Lisette Amalfi Harris, AMP
Senior Mortgage Consultant/Owner
Mortgage Alliance o/a OAC Mortgages Inc.
(905) 529-1199
TF: (877) 529-1199

How Much Can I Afford?

Question: How do I know how much I can afford?

Answer:

Lending institutions such as banks and trust companies use two simple rules to determine how much you can afford in monthly expenses for housing including your mortgage payment.

• the first rule is that your monthly expenses for housing can not be more than 32% of your gross monthly income. Your monthly expenses include Principal mortgage payment, Interest on the mortgage, Taxes - property and Heating; PITH for short. This total amount is your Gross Debt Service (GDS)
• The second rule is that your monthly debt load should not be more than 40% of your gross monthly heating. PITH is included with other debts such as car loans, leases, credit card payments - You have 8% of your gross income for these other debts. This total amount is your Total Debt Service (GDS)

Keep in mind that most homebuyers or people refinancing keep their debt ratio comfortably below the maximums. The lower your debt load the more affordable your home and lifestyle.

Whether applying for a credit card, personal loan, or a mortgage, all creditors will want to review your credit history. The best thing you can do is avoid consumer debt as much as possible, always pay your bills on time, and the less you inquire for credit, the better.

Talk to an Accredited Mortgage Professional (AMP) about calculating your GDS and TDS before you start looking for your home.

Send your questions to Lisette at lharris@tmacc.com or call today, (905) 529-1199.

Buying a Home that Requires Improvements

Question: We found our dream home - the only problem is it needs a new roof and the furnace is very old. We don't have the funds to do this AND buy the house. Do we have any options?

Answer: It is exciting to find the home that you've been looking for...not that exciting to know that, if you buy this house, you're going to have to put money into it right away. There are a couple of options that you can consider...

1. 100% Financing - Instead of putting your 5% down payment toward the purchase of your home you can use this money to do the needed repairs. So, if you were buying a home for $200,000.00 you can save the down payment of $10,000.00 and use these funds toward the new roof and furnace.

2. Purchase Plus Improvements - The repairs you need to do to the home, such as new roog and a new furnace, may be eligible for the Purchase Plus Improvement Program offered by some mortgage lenders. In essence, you can purchase a home and include the cost of any immediate renovations into the mortgage. If the estimate for a new roof is $5,500.00 and the new furnace is $7,500.00 the lender may see the "as improved" market value of the home to now be $213 000.00. Your mortgage would now be based on $213,000.00 and your down payment would be 5% of this new value ($10,650.00). Your direct, out of pocket, expense amounts to $650.00. The improvements are completed and paid for once you move in. This program is also available as Refinance With Improvements. Knowing all the options available for our clients is our job! The services of our mortgage agents are of no charge and can save you time and money.

Email Lisette at lharris@tmacc.com or call (905) 529-1199 with your questions!

How to Become Mortgage-free Sooner

Question: How can I become mortgage-free sooner?

Answer: Paying your mortgage off the traditional way takes 25 to 40 years and costs about TWICE the purchase price of your home. Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.

• Change your payments. Simply increasing your payment frequency to bi-weekly or weekly costs nothing and can save thousands of dollars over the life of your mortgage.
• All-in-one mortgage. Instead of making extra payments, consider switching to a mortgage that pays off the principal faster without costing you anything more.
• Merged account mortgage. If you'd rather not refinance your existing mortgage to switch to an all-in-one mortgage, consider a merged account mortgage. This system uses your existing mortgage (any type of first mortgage will work), and advanced line-of-credit (ALOC), and specialized software that makes a connection between your bank account, ALOC, and mortgage.

For more information, and help to decide which one of these options is the best way for you to become mortgage-free sooner, call us today for a free analysis at (905) 529-1199.

Variable Rate vs Fixed Rate

Question: Should I go Variable rate or Fixed rate?

Answer:Depends!

Variable rate is based on the Bank Prime, which is what financial institutions charge to the consumer. Bank Prime is based on the Central Bank Rate (the amount of interest the Bank of Canada charges financial institutions for short term loans). As the Central Bank Rate increases or decrease, so does Bank Prime and in turn the variable rate. Over the last three months prime has decreased a half percent.

The 5 year fixed rate is based on the bond market. As the bond market increases or decreases so does the 5 year fixed rate. This fluctuation does not apply to banks posted rates as it does to rates accessible to mortgage brokers. Fixed rates are currently on a downward trend.

Instead of trying to guess where rates are headed, consumers would do better to think about their own situation. They should evaluate their personal balance sheets and risk tolerance. The decision of whether to go short (variable) or long (fixed) will depend on the consumers' tolerance for risk as well as their ability to withstand increases in mortgage payments if prime increases.

Something to keep in mind is that variable rate mortgages allow consumers to lock in to a fixed rate at any time without costs, with fixed rates currently in a downward cycle; the long term benefit of locking in at a later date may prove to have substantial savings. While there's no up-front cost to the change, from variable to fixed, NOT all lenders will lock in at the fully discounted (very best) fixed rate mortgage. Consumers should be sure to ask their lender if they will get the same fully discounted fixed rate upon lock in and consumers should also know that every lender has a different variable rate product to offer.

Email Lisette at lharris@tmacc.com with your questions, or call (905) 529-1199