7 Dec

Mortgage Qualifying Solutions

General

Posted by: Morgan Dempsey

Many people are having trouble getting the mortgage they want these days. Working with a Licensed Mortgage Advisor offers you not only access to a variety of products but also a variety of experience-based solutions.

Here are a couple strategies we have used to get home buyers qualified, who have had difficulty elsewhere:

CREATE THEIR DOWN PAYMENT

Take out an RRSP loan with a lender who has the right guidelines. You utilize a payment on the RRSP loan that fits into their long-term debt service ratios to qualify for a house. After 90 days you use the Home Buyers plan to withdraw the down payment. The advantage of our scenario is that our lender does not require the loan to be paid off to use the RRSP money for the down payment. Most RRSP lenders will demand that the withdrawn funds are used to pay the balance of the RRSP loan off in full. If they qualify, (in RRSP room and GDS / TDS ratios,) up to $25,000 in down payment could be available.

RE-WRITE A CAR LOAN TO REDUCE THE MONTHLY PAYMENT

We have a bank lender who rewrites car loans with a longer term creating a lower monthly payment. Lower car payments can lead to a higher mortgage. Recently, we had clients with a newer vehicle with a large payment. With the new lower payment that we organized, they then were able to obtain a $70,000 higher mortgage. They were very happy that they were now able to purchase the house they really wanted NOT the house that the bank said they should be purchasing.

If you think you can benefit from these strategies or would like to know about other solutions, please contact me. Let me use my experience and skill as a licensed mortgage advisor get to know your situation and get you on the path to owning the home of your dreams.

19 Oct

Four Legal Pot Plants, What Are Lenders Doing?

General

Posted by: Morgan Dempsey

 

As we all know, recreational marijuana is now legal in Canada. The law is set, but implementation and how policies and guidelines will impact our industry are yet to be determined. Generally, 30 grams for personal possession up to 4 plants at home.

For realtors, mortgage brokers and their clients we are facing many months of the lenders sorting out their guidelines. If a borrower or seller voluntarily discloses they have been growing four legal marijuana plants, which should produce more than 30 grams, as a point of interest, how will the lenders, mortgage insurers and home insurers react?

Lenders:

As of today, many lenders do not have a policy. Some say yes four plants will be OK, some say case by case, and some say four plants will be a hard no. For the common existing house stigmatized as a “grow-op”, there are still very few lender options. We do have a couple of lenders for fully remediated grow-ops, and CMHC does consider those applications.  

Mortgage Insurers:

CMHC says they will carry on the same as they have been. Genworth and Canada Guaranty are saying either, case by case or the policy will be determined shortly.

Home Insurers:

As or right now we have not been able to get any consistent information on this subject. However, home buyers and homeowners are encouraged to check with their provider for their policy information.

For those folks growing up to four plants and looking for financing, expect your clients to get mixed results from banks and many lenders. Some lenders are considering air quality tests, home inspections, statutory declarations and other means to determine if the home has been impacted or damaged by four plants. For now, we have identified willing lenders. CMHC will consider the applications.

Please contact me if your clients have any questions on how the new legalization laws affect their options or to avoid complications with four plant files.  

Croft Axsen – Jencor Mortgage Corporation 

20 Sep

How we get Self-Employed Clients Approved.

General

Posted by: Morgan Dempsey

Being self-employed in Canada is a dream come true for many Canadians. It gives you freedom and flexibility to forge your path in your personal and professional life. You are in control of when you work, where you work, and whom you work with or for. With that freedom comes a lot of specific responsibilities. Because you’re are both employer and employee, you are now accountable for the finances of your businesses (savings/liabilities and taxes) as well as your own. Buying a home for self-employed Canadians can be an intimidating process for some because it does require answering a few more questions and producing a bit more paperwork. That’s why we are here to help!

Approximately 15-20% of Canadians are considered self-employed. Though this number is not the majority it is still a significant portion of the buyers market, and it is something we pay particular attention to in our office. So where do you start as a self-employed home buyer?

The Groundwork:

Get your paperwork in order. Lenders want to make sure you are organized and can manage both your business finances and your personal finances.

Speak to your accountant, or find a copy of:

  • Financial Statements of your business (last two years)
  • Proof that your HST and/or GST is paid in full
  • A copy of your GST license or Articles of Incorporation
  • T1 Generals (Sole proprietor)

You also want to make sure you have the personal financial documents for you and your co-applicant in order as well. A Notice of Assessment for the last two year showing you have your income taxes paid in full will be necessary. Every ‘A’ lender needs to know you don’t owe the Canadian Government any money before they can approve home financing, though we do have other options we can explore.

Getting Started:

The next step is where working with a Licensed Mortgage Advisor is important. Every Self-employed home financing file is unique, and working with a professional team with expertise and lending options will always give you the best outcome.

First, we get to know your goal and your needs, then we get to know your financial status and run the numbers. All lenders have their particular list of criteria, programs, and conditions for how they view a self-employed application. It’s important that the person you are working with understands your Financial Statements clearly and can identify the lending and insurable options available. As a short example; some business owners don’t declare much income for themselves, giving them the opportunity to write much more off through the company. Though this is a substantial annual tax savings, this could make it difficult to qualify a borrower based on their income alone. Professional Mortgage Advisors can use the complete business financial picture and present a much more favourable and accurate account of your income to the lender. We can do this in a number of ways such as showing year after year growth, providing proof of contracts showing revenue, and in some cases using a Stated Income solution.

I won’t go to into depth on the Stated Income as there are some revisions to the program that promises to make it more accessible to future applicants. However, in a nutshell, the program is designed for Self-employed borrowers who are unable to provide traditional income verification but have a proven history of managing their credit and finances responsibly. If you have more questions or would like to learn more about this, please reach out to us at Jencor or Click Here to see the program’s guidelines.

Getting to the Finish Line:

After we get your paired with the best lender to finance your mortgage, the completion process becomes basically the same as any standard sign off process. You sign your documents with us, then you work with your Lawyer and Realtor to complete the property closing.

The key to this process is, remove doubt and let us know what you can do. True some lenders do not have an appetite for all Self-employed borrowers, but not at Jencor. We know our lender’s programs, and we know not to make them work for our clients. Licensed Mortgage Advisors are trained and educated to make this process as smooth and seamless as possible for borrowers in all situations. Our Advice is free, and we are available when you are.

 

Written By:

Morgan Dempsey – Mortgage Advisor, Jencor Mortgage Corporation

6 Sep

New To Canada

General

Posted by: Morgan Dempsey

Welcome to Canada!

Canada is made up of hundreds of thousands of people and some did not start in Canada but have made it their home. Buying a home, especially when you are new to Canada can be mind-boggling, BUT, we have a mortgage for you!

The New to Canada Program is designed to help new Canadians purchase their first home sooner and become established faster.

What are the qualifications for this program?

Firstly, you must have immigrated or relocated to Canada within the last 3 to 5 years to qualify for the New to Canada Program.  You must have proof that you have been working full time in Canada for at least 3 months and that you are not on probation with your employer. The lender will require a letter of employment from your employer with your salary and employment status. Copies of your valid work permit or landed immigrant status card (front and back) will also be a requirement.

Down payment is a minimum of 5% and at least 5% of the funds must come from your own savings and be verifiable with 3 months worth of bank statements from a Canadian Bank.  Some lenders will allow the 5% to be a gift from an immediate family member and gift letter from the lender will be required.  Please speak to your broker in advance when a gift is being used. That way we can provide you with information for monies coming from other countries and ensuring you are following all the banking rules and regulations.  With a minimum of 5% down payment, you will need default insurance and that can be provided by Canada Guaranty, Genworth or CMHC (Canada Mortgage and Housing).  Each of these insurers offer programs that will work with the lender.

The lender will need to see your credit bureau and as you are new to Canada you may be just starting that, so we will require an international credit report from your country of origin.  Just starting up your credit, we can assist you with that by providing valuable information to get you ready for the road to homeownership. You can obtain an International or US Bureau by contacting Equifax and they will point you in the right direction.  Your international credit report is taken into consideration by the lender as it will show that you are a responsible borrower and have kept your accounts in good standing.  We would advise that a letter of recommendation from your current bank be done as that is also very helpful in the process. If you cannot provide an international credit bureau, the lender will ask you to confirm your good standing by providing 12 months history of bills that must be paid on time (rent, utilities, cable or insurance premiums).

Working with your Jencor Mortgage Advisor will provide you with options and answers to your questions. Our advice is always free, we are here to help you make home ownership a reality.

Remember, when looking for your home, use a professional to assist with not just financing but the search as well.  Realtors are great negotiators and can also help you determine your requirements in a home, “needs vs wants”.  Do you need to be close to schools, public transportation, etc.

This process can take some time but again, that is why you have a Jencor Mortgage Advisor at your fingertips!

By the way, Welcome to Canada!!

 

Originally posted by:

Karen Penner & Heather Hellings
Jencor Mortgage Corporation

31 May

Could a Purchase plus Improvements be the answer?

General

Posted by: Morgan Dempsey

Turn the house you like into the Home you will buy!

Government restrictions on refinance guidelines have reduced the equity homeowners can access for renovations. High ratio buyers especially, in a market with slow growth value, may wait years before the house has appreciated enough that an 80% Loan to Value refinance provides any money. If home buyers want to do upgrades the time of purchase may be the only opportunity where they can add the cost of the renovations to the mortgage.

 

Use the Purchase plus Improvements to:

  • Add a new or updated kitchen
  • Develop the basement for more living space
  • Update or replace the carpeting or maybe adding hardwood
  • Add a garage or workroom
  • Add a media room or “man cave”
  • Add an additional bathroom
  • A new roof
  • A more efficient central air or furnace system
  • Add new siding, eaves or fascia
  • Replace or updating doors and windows
  • Add major landscaping

 

If the property isn’t exactly what you want: renovate, add, or upgrade it!

There are specific requirements for the purchase plus improvements program, please call to learn the details. Exceptions to the generally understood parameters are available.  Renovating up front may be a buyer’s best option.