It PAYS to shop around.
Many Canadian homeowners pay too much for their homes because they are not getting the best mortgage financing available in the market.
The mortgage process can be intimidating for homeowners, and some financial institutions don't make the process any easier.
But I’m here to help!
I’m a VERICO Mortgage Advisor and I’m an independent, unbiased, expert, here to help you move into a home you love.
I have access to mortgage products from over forty lenders at my fingertips and I work with you to determine the best product that will fit your immediate financial needs and future goals.
VERICO mortgage specialists are Canada’s Trusted Experts who will be with you through the life of your mortgage.
I save you money by sourcing the best products at the best rates – not only on your first mortgage but through every subsequent renewal. So whether you're buying a home, renewing your mortgage, refinancing, renovating, investing, or consolidating your debts — I’m the VERICO Mortgage Advisor who can help you get the right financing, from the right lender, at the right rate.
How much?!?! Mortgage pre-payment penalties explained.
If you were hoping the Canadian government had introduced a new law standardizing mortgage penalties, youll be sad to learn no changes yet. Rumours swirl that something has to or will be done in regards to this issues. But, until that time were stuck with what we have. So, it is in your best interest to understand how pre-payment penalties work.
Youll be shocked to know that the average Canadian breaks their mortgages every 3.5 years, and the most common term people take is 5 years. Its easy to see why understanding mortgage penalties can end up saving you thousands. Of course, there are some simple strategies to avoid a penalty:
Wait until your maturity date to refinance, buy and sell, or switch lenders.
Porting Most mortgages include a portability features that essentially allows you to transfer your mortgage to a new property.
Early Renewal Some lenders will allow you to renew up to 6 months early without penalty.
However, when these situations dont line up, or arent available, clients are forced to pay what sometimes can be a massive mortgage penalty. For example, if you started a new mortgage exactly one year ago when rates were around 2.99% for a 5 year fixed closed term and you wanted to pay out your loan in full, here are some numbers to consider:
BMO - $4,640.00
MCAP - $2,167.00
These calculations can be done at home if you want to test your individual mortgage. Each financial institution is now required to disclose a pre-payment calculator or formula on their websites to allow Canadians to calculate their own penalty.
So, youre probably wondering how these penalties are calculated? Well its a method of two formulas, Interest Rate Differential (IRD), or 3 Months Interest. With a Variable Rate Mortgage, it is always 3 months interest. If you have a fixed mortgage, its the IRD or 3-Months Interest and it always depends on which is greater. I should note that No Frills Mortgages, or super low rate mortgages can sometimes have completely different ways of calculating a penalty. Beware of what youre signing!
IRD What it means..
Interest rate differential is the difference of your current mortgage rate and what the lender could offer in todays current market. For example, if you have 4 years left on your mortgage, the lender will compare their rate to what their current 4-year rate is.
This calculation differs between lenders in regards to how they determine what rates to compare. Banks have posted and discounted rates. If you review any mortgage documents from the Big 6 Banks, it shows you the discount offered from the posted rate.
Right now, Scotabank has a 5 year rate of 4.79%, however, you could walk in there today and get 3.09% on the same 5 year term. But, when they go to calculate the penalty, dont think they wont consider the original discount. This is huge when picking your lender, especially if you know you may need to break your mortgage.
Other lenders, especially those available through the broker channel, compare rates at face value. Meaning, the discount rate is compared to the discount rate. That is what you saw MCAP (above) with the lowest mortgage penalty.
In essence, when selecting a mortgage lender, be sure to consider all your options. It could end up saving you thousands.
Mortgage Agent in Kingston, Ontario, License #M13000201
Top five home renovations that increase property value
Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment 5-6x what they cost.
Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.
Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your homes value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.
Thebathroomis the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a 3-piece bathroom under a staircase the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.
Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh anddesirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.
#1 An Income Suite
No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting yourbasement into a rental, or another floor in the home, an income property will increase your homes worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive which creates real wealth that can supplement your income.
Valuable Fraud Prevention Tips for Homebuyers and Homeowners: Part 1
March is Fraud Prevention Month. Canada Mortgage and Housing Corporation (CMHC) has consistently been a leader in the fight against mortgage fraud and offers the following tips to protect yourself against becoming a victim of mortgage fraud.
Misrepresentation of Information
Mortgage fraudoccurs when someone deliberately misrepresents information in order to obtain mortgage financing that would not have been granted if the truth had been known. This can include:
Misstating ones position or inflating ones income or length of service at their job;
Misstating employment status (ie. salaried/full time versus contract, part time, hourly or commission-based or self-employed);
Misrepresenting the amount and/or source of the down payment;
Purchasing a rental property and misrepresenting it as owner-occupied;
Not disclosing existing mortgage and/or debt obligations;
Misrepresenting property details or omitting information in order to Inflate the property value;
Adding co-borrowers who will not be residing in the home and do not intend to take responsibility for the mortgage.
Another common form of fraud is when a con artist convinces someone with good credit to act as astraw buyer.A straw buyer is someone who agrees to put his or her name on a mortgage application on behalf of another person. In return for their participation, straw buyers may be offered cash or promised high returns when the property is sold. Often, straw buyers are deceived into believing that they will not be responsible for the mortgage payments.
Consequences of Misrepresentation
Borrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud and will be responsible for any financial shortfall in the event of default. They may also be held criminally responsible for their misrepresentation.
If you suspect that you or someone you know has been the victim of mortgage fraud, please contact your local police department or The Canadian Anti-Fraud Centre.
Toll Free: 1-888-495-8501
Toll Free Fax: 1-888-654-9426
To find out more about mortgage fraud, visit the fraud prevention section of the Canadian Association of Accredited Mortgage Professionals (CAAMP) website athttp://mortgageconsumer.org/protect-yourself-from-real-estate-fraud.
For over 65 years, Canada Mortgage and Housing Corporation (CMHC) has been Canadas national housing agency, and a source of objective, reliable housing information.