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I have access to many different mortgage products and unpublished special rates from banks, credit unions, monoline, alternative, and private lenders. I can find the best mortgage or line of credit for you whether you are looking for a residential, multi-residential, or commercial loan for a new purchase, refinance, renewal.
I can accept applications through this secure online website if you click the "apply now" button, or otherwise I will be glad to take your application over the phone at 905.269.3721, whatever is easiest for you! I make mortgage financing quick and easy with e-signatures; therefore, we do not need to meet for you to get a mortgage!
It is important to understand that mortgage products vary quite a bit from lender to lender in order to meet the various needs of borrowers. For instance, in addition to standard low interest insured and conventional uninsured mortgages from banks and monoline lenders, I have lenders that offer mortgages to borrowers with
- purchase plus improvement (add up to $100,000 on your purchase price for cost to renovate and upgrade)
- up to 5% cash back upon closing to cover closing cost and pay down debt;
- borrowed down payment;
- multiple rental properties;
- interest only loans;
- bridge financing;
- bridge financing without a firm sale;
- bankrupcy or consumer proposal;
- self employed with stated income;
- child tax credit included in income;
- child or spousal support payments included in income;
- reverse mortgages for property owners age 55+;
- qualified under the 'old rules';
- commercial loans;
- unsecured loans;
- car loans; and
- the list goes on.
I have the flexibility to meet your needs whatever they are. Simply put, as an Independent Mortgage Agent, I offer you more choices and an unbiased opinion.
I offer an excellent Mortgage Protection Plan from Manulife at an affordable price in additition the banks mortgage insurance. It is worth noting that the best thing about the Manulife Mortgage Protection Plan is that the plan is not discontinued if you move to a new home and or you refinance with another lender. If you purchase the plan through me, the plan stays with you as long as you have a mortgage even if you move and or change lenders.
I also collaborate with an insurance broker who is able to offer very low cost home and auto insurance because of their high volumes.
I believe everyone is better off if clients are making informed decisions. I work closely with clients to explain the process and their best options. Below is a summary of different types of mortgages and how to qualify for a mortgage for your general information and knowledge. Please do not hesitate to call if you have any questions.
Contact me today for your free consultation!
I look forward to speaking with you.
Mortgages 101 – by Nancy Blakely, Mortgage Agent
In order to understand your own situation and to decide for yourself how you would like to best move forward, it is important for you to understand about the various different types of mortgages, and how a person qualifies for a mortgage as follows.
Different types of mortgages
- Standard Insured: less than 20% down payment, less than $1 million property value, amortization 25 years or less, the cost of CMHC default mortgage insurance is added to your mortgage. Insured mortgages offer the lowest rate because there is no risk to the lender1. Insured/able mortgages can be transferred to another lender provided the amount and amortization does not change.
- Standard Insurable: 20% down payment or more, less than $1 million property value, amortization 25 years or less, the cost of CMHC default mortgage insurance is paid by the lender; therefore, rates are a little bit higher to cover their costs.
- Conventional Uninsured: 20% down payment or more, property value can be more than $1 million, amortization can be more than 25 years. ALL REFINANCED MORTGAGES AND MORTGAGES ON RENTAL PROPERTIES are conventional uninsurable.
- Alternative: 20% down payment or more, property value can be more than $1 million, amortization can be more than 25 years, qualifying ratios can be higher and credit score can be lower. Alternative rates are about half of one percent to three percent higher than conventional depending on the file. There is generally a lender and or broker fee deducted from the mortgage at the time of closing.
- Private: Private lenders vary in their requirements and are quite flexible. They accept poor or no credit. They often lend based on equity only. Interest rates are higher and lender/broker fees may be $4,000 to 4% depending on circumstances and type of mortgage. For instance, open mortgages will likely have a higher fee in order for the lender to get a return on their investment.
- Reverse Mortgage: The borrower does not need to income or credit qualify for a reverse mortgage. Lenders qualify the borrower based on age, location, and value of the subject property. Borrowers must be over age 55. The older the borrower, the more they qualify for. Banks that offer reverse mortgages guarantee that the borrower can live in the home for as long as they want provided, they maintain the property, fire insurance, and pay their property taxes. The penalty to pay off the mortgage early is half if the borrower moves to a senior’s residence and waived if they pass away.
How to qualify:
1. Income Qualification (borrowers must meet both ratios)
- Gross Debt Service Ratio GDS = monthly mortgage payment + property taxes + heat + 50% condo fee can not be more than 39% of monthly income to qualify for a standard or conventional mortgage, and to a maximum of 50% and with a few lenders up to 60% for alternative mortgage using BOC rate.
- Total Debt Service Ratio TDS = GDS calculation + monthly debt payments cannot be more than 44% of monthly income to qualify for a standard or conventional mortgage, and to a maximum of 50% and with a few lenders up to 60% to qualify for an alternative mortgage using Bank of Canada rate.
- The Bank of Canada determines the qualifying rate that we must use to calculate the GDS and TDS. The qualifying rate is generally about 2% more than your actual mortgage rate because the government would like to know you can afford mortgage payments if rates go up in the future.
2. Credit history and score (Range: very poor 480 to perfect 900 - no credit history receives an R instead of a score)
- Standard Insured or Insurable mortgages require a minimum of 2 years credit history of 2 credit items to show that a person can handle credit and a minimum score of 650. All credit collections must be paid in advance of the application or mortgage funding.
- Lenders generally require a minimum 600 credit score for conventional uninsured mortgage although some lenders require 650 or 680, and a few may allow lower than 600 on exception as a secondary applicant. All credit collections must be paid in advance
- Many alternative lenders accept very low credit scores and a few will accept a R with no credit history on exception. Alternative lenders assess the risk on each file individually at the time of the application. Collections must be paid at closing with mortgage.
- Private lenders vary in their requirements. Private lenders assess the risk on each file individually at the time of the application. They may not ask for income or credit history and may approve a loan based on the property alone, but then they may lower their ratio of loan to value of the property.
- Maximize your score with at least 2 credit items reporting at least 2 years, pay your debts on time, and maintain your line of credit and credit card balances below 67% of your limit.
- The property must be approved by the lender because the lender is investing their money and securing it against the property; therefore, the lender wants to know the property is marketable in the event that they need to foreclose. Lenders may offer a lower loan to value on rural, rental or million-dollar properties because these properties pose a higher resale risk to the lender. Standard and conventional mortgages require the property to be between 95%-98% complete depending on the lender’s policies.
The government anti-laundering regulations require 90 days history of the savings for your down payment as well as 90-day history of 1.5% of the purchase price to cover closing costs such as legal fees and land transfer taxes. These funds should be saved from a legitimate source in a financial institution, equity from property owned, borrowed, or gifted. Closing costs may also be funds from a cash back mortgage.
To learn more or pre-qualify, call Nancy Blakely 905.269.3721 or Apply Now by clicking the Apply Now button in the upper right of this page.
 Some very low-rate mortgages have restrictive conditions. It is important to work with a Mortgage Agent you trust to explain the details to you and to find the mortgage best suited to your level of risk.
Summary of Government Programs for First Time Home Buyers
There are essentially four different government initiatives as follows:
- First Home Savings Account (FHSA)
- Home Buyer Plan (HBP)
- First Time Home Buyer Initiative (FTHBI)
- Reduction to Land Transfer Tax
Canadian have the opportunity to combine all government programs provided they meet each program criteria.
First Home Savings Account (FHSA)
The First Home Savings Account is the most recent federal program implemented effective April 1, 2023. It is available for Canadian residents age 18 to 70 to save in a FHS bank account up to $8,000 a year or up to $40,000 over 15 years tax- free towards the purchase of a home. The funds must be used within 15 years of opening an account and or before age 71 which ever is earlier.
A separate home buying account will help first time home buyers to stay focused on their goal of buying a new home and allow them to use up to $8,000 a year of this savings to reduce their income tax. FHS account owners will not pay income tax on their investment gains either! For example, if you save $8,000 in a year an earn $400 interest on those funds, you will not pay tax on the $400. Multiply and accumulate that over 5 years or more and you could gain thousands of dollars tax free. Your savings and gains are not taxed as they grow and you are able to put the full amount of your savings and investment earnings that remain in the account towards the purchase of your first home.
Residents must meet the following criteria to be eligible...
- A Canadian Resident age 18 to age 71 inclusive;
- You or your spouse do not own a home in which you live currently or in the 4 years prior to opening the account;
- If you separate from your spouse and do not live in that residence or another residence that you own for 4 years.
The account may remain open until December 31st in the year…
- after your first qualifying withdrawal,
- of the 15th anniversary of your account, or
- that the account owner turns 70
If there is unused money in the FHS account after the aforementioned conditions are met, then the following options apply.
- Direct transfer tax-free to a RRSP or RRIF if the CRA indicate RRSP room;
- Reinvest the funds in a TFSA; or
- Withdraw the money subject to tax withholding.
Home Buyers Plan (HBP)
The federal government’s Home Buyer Plan is also designed to help Canadians enter the housing market by providing them with tax-free funds to put towards the purchase of their first home. The HBP allows each first-time home buyer to withdraw up to $35,000 from their registered retirement savings plan (RRSP) to use as a down payment on their first home. These funds must be replenished in 15 years.
First Time Home Buyers Initiative (FTHBI)
Please refer to www.Canada.ca for details and a calculator to determine your eligibility of this plan. This plan offers to assist borrowers with up to 5% of their down payment on the purchase of an existing home or 10% down payment of a new build provided the total down payment is less than 20%. The government will register 5% or 10% respectively ownership in the home and the borrowers would then need to repay 5% or 10% respectively within 25 years. Initially the criteria included the property value being less than 4 times the annual income on the application with a maximum income of $120,000 combined for all applicants. Subsequent changes were made to the qualifying details in Toronto and Vancouver from the rest of Canada (see Canada.ca). The plan is widely considered to be inaccessible based on the qualifying criteria.
Reduction in Land Transfer Taxes
Municipalities charge Land Transfer ax (LTT) on the purchase of a property which must be paid at the time of closing. Many municipalities will reduce or waive LTT for first time home buyers. If there is more than one buyer, I believe in most cases the LTT will be reduced proportionately. Buyers are encouraged to speak to their lawyer to learn how much the LTT calculation is in the municipality that they are purchasing, and if they qualify for a reduction to the Land Transfer Tax.
First Home Savings Account (FHSA)
Home Buyers Plan (HBP)
Mortgage Co-Signing 101
A mortgage co-signer is someone who agrees to share the responsibility for a mortgage in the event that the primary applicant is not able to make their mortgage payments.
- members are the most common co-signer because there is a strong relationship and trust. This may be parents co-signing for their children, children co-signing for their retired parents, or siblings. There is no legal stipulation that a co-signer must be related to the applicant.
A co-signer may lend credence to the application to give the lender confidence that the applicant(s) can manage the debt. This may be the only way that the applicant can obtain a mortgage to buy a home or it may improve the applicants borrowing ratios and entitle the applicant to better terms in the mortgage such as a lower interest rate.
The co-signer must recognize that their buyer power will be reduced by the amount of the mortgage and mortgage payment which will now be reflected on their credit as a debt.
Types of co-signers
Co-Borrower: The co-signer effectively purchases the home alongside the applicant. Their name is placed on title of the property and both parties are considered equally responsible for the debt in the event of default. Please speak to your lawyer about the registration of the mortgage as either Joint Tenants or Tenants-in-Common.
Registration of Co-Borrower: Co-signers are most commonly registered as Tenant-in-Common with 1% ownership of the property because this has the least tax implications at the time of sale of the property. Alternatively, the co-signer may elect or be requested by the lender to be registered as Joint Tenants. The difference is in estate planning. In the event of death of the co-borrower, the surviving Joint Tenant inherits the deceased share of the property whereas the deceased’s share is transferred to their estate with Tenant-in-Common. It is recommended that the co-signer explore tax and estate planning considerations with their lawyer and that they update their will.
Guarantor: A guarantor has all the responsibility of the co-signer but is not named on the asset as part owner. They remain responsible for servicing the loan if the loan goes into default, but the guarantor is not considered to be part owner of the property and does not have any legal connections to the property. There are a few lenders that permit a guarantor on an exception basis when the co-signer is at high risk of being sued and the property may be brought into the suit.
Why does an applicant need a Co-Signer?
Income: An applicant may benefit from a co-signer when their debt service ratios are too high to qualify for the mortgage amount requested. In other words, if it is deemed that the mortgage payment, property taxes, utility cost and other debt payments are higher than the lender permits, then they may be able to add a co-signer to the application to prop up their combined income net of all living expenses.
Credit: An application may benefit from a co-signer if a borrower’s credit score is low or history is “thin” which means that they do not have a lot of credit history. Lenders require a minimum of two credit items reporting to Equifax for two years with no missed payments or collection items for an applicant to be considered. If a borrower has less than this, they may be approved with a co-signer.
What qualities do lenders look for in a co-signer?
The lender will be looking to fill the gaps of a mortgage application whether it is because the applicant has thin credit or insufficient income or both.
Strong Income: The lender will want confirmed steady income to debt service the mortgage by way of salary income or two years average net income reported to CRA on their income tax. Lenders may consider exceptions to include self employed stated income or less than two years history if the borrower previously worked in the same field.
Good Credit History: Credit helps to determine a client’s financial character and maturity. Lenders require the co-signer has a history and reliable track record managing debt repayment with a minimum of at least two items reporting to Equifax for two years or more.
The Trust Factor
Trust is a key consideration for both parties. Both parties should consider the character and stability of the other. Financial disputes can destroy family unity and long-standing friendships. All parties should consider if they are able to fulfill their responsibility and how they will deal with a situation in the event of default. The co-signer must trust the applicant will make the mortgage payments and the original applicant must trust the co-signer to be named on their asset as an owner.
Independent Legal Advice: Both parties should seek independent legal advice from an experienced real estate lawyer. This is to ensure they fully understand their obligations, rights, and tax implications as it relates to the property.
Updated Will & Testament: All parties should update their will to address their intentions upon death and give their executor clear direction with respect to their share of the property ownership.
Reach out to a Mortgage Agent
If you’ve been declined for a mortgage based on income or credit history, don’t fret! A Mortgage Agent may explore the impact of a co-signer to prop up your application and fill in the gaps.
Please contact me if you have any questions. I am here to help!
To Learn More Contact
Nancy Blakely, Mortgage Agent
The Mortgage Advisors Lic11947
To learn more or pre-qual
Cobourg, Port Hope, Northumberland, Belleville, Trenton, Brighton, Colborne, Peterborough, Durham, Bowmanville, Oshawa, Pickering, Whitby, Newcastle, Toronto, Hamilton, Etobicoke, St. Catharines, GTA.