Why do Lenders ask for Employment letters?

employment letters

Why do Lenders ask for Employment letters? Checking for employment letters might seem like just one more piece of paper, but it’s important.  It’s due diligence.  And it works on your behalf. A borrower will provide employment letters if requested when applying for a mortgage.  You will also need a current pay stub dated within 60 days. The mortgage broker informs the borrower for additional income documents.  A lender requests the most recent 2 years Notice of Assessments or T1 Generals (tax return) or T4s certainly if overtime or bonus income is used to qualify. Employment letters should provide the…

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What is the biggest misconception with using a Mortgage Broker?

Residential Mortgage Lenders

What is the biggest misconception with using a Mortgage Broker? One of the biggest misconceptions of using mortgage brokers is that brokers place their residential mortgages with private lenders and not banks.  That is misguided information often passed down to borrowers. There are 3 types of residential mortgage lenders that borrowers are placed with. What are the Different types of Residential Mortgage lenders? ‘A’ Lenders – ‘A’ Lenders are the big name Banks, Credit Unions and Monoline lenders.  The big name Banks in the broker channel are Scotia, TD, and ATB.  Brokers in Alberta can deal with Servus Credit Union and First Calgary. There are different Credit Unions that…

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8 Things to Consider Before you sign your Mortgage Renewal

Mortgage Renewal

8 Things to Consider Before you sign your Mortgage Renewal Approximately 47% of mortgages renew this year. There are several things to consider before you sign your next mortgage renewal! Have you explored all your options? Once you receive your mortgage renewal statement, there’s nothing easier than simply signing on for another term. But while this may make sense in many cases, your family or financial situation may have changed over time.  We can look for opportunities that could better meet your needs. Are you comfortable with your payments? If you’ve been feeling financially strapped each month making your mortgage…

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6 Mortgage terms Homebuyers should know

6 Mortgage Terms Every Homebuyer should know

Mortgage terms can be daunting for a homebuyer . Understanding these 6 mortgage terms homebuyers should will be helpful when you consider buying your first home! Here are the 6 Mortgage Terms: High-ratio mortgage A Homebuyer that purchase a home with a downpayment of less than 20% will have a high-ratio mortgage. All high-ratio mortgages are covered by mortgage loan insurance also known as mortgage insurance. The three mortgage default insurers in Canada are CMHC, Genworth and Canada Guaranty. Low-ratio mortgage Also known as a conventional mortgage, a low-ratio mortgage is one where the homebuyer has made…

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Interest Rates Rise

House Hunting: 5 Tips to help with the Homebuying Process
Prime Interest Rate Increased: What is the affect on your Variable Rate Mortgage?  It had been anticipated that Bank of Canada was going to increase their lending rate and they did by 0.25%.  Banks followed suit and increased their prime lending rate by 0.25%. There has been quite a stir recently putting many homeowners in a panic that rates were going to spike up quickly and concerns with those who are currently in variable rate mortgages. Banks prime rate increased to 2.95%, just under 3% that it was at September 2010.  It is a small increase of a quarter of percent. Nothing too major. My inbox and phone has been going steady with homeowners concerned with these changes.  Let’s have a look at the historical rates and the impact a 0.25% increase has on mortgage payments.

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Types of Insurance when buying a home

Home

4 Types of Insurance Related to your home MORTGAGE DEFAULT INSURANCE is an added premium into your home mortgage. Mortgage default insurance is required for those with a High-Ratio mortgage (less than 20% down) or borrowers with higher risk. This policy is in place to protect lenders from risk of borrower default. The 3 mortgage default insurers in Canada are CMHC, Genworth & Canada Guaranty. You purchased a big investment and you are going to want to insure the building & contents with FIRE & HOME INSURANCE.  Fire insurance policies pay out the mortgage lender if the house burns down. Mortgages won’t fund…

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Downpayment Options

Downpayment options

What Are My Downpayment Options? One of the biggest challenges of home ownership is saving the required downpayment. Your lender will be looking for a minimum 5% down payment on your property. There are generally 5 options available. Your down payment can come from more than one source. Using Your Own Savings or Investments One of the most straight forward down payment options is your own savings or investments.  You will need to provide recent 3 month bank statements to show the history of the savings.  It is required that the full amount of  savings for your down payment must be in…

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Beware of Mortgage Penalties when Rate Shopping

Penalties

Understand your Mortgage Penalties when Rate Shopping is extremely important! Mortgage rates are at an all time low so it’s important to understand the penalties if you break your terms. Rates for a 5 year fixed mortgage have been hovering between 2.59%-2.99% for several months now. When a client comes to see me for a new mortgage, whether it is for a purchase, refinance or their existing mortgage is up for renewal, I will give them the best rate available. I put them in a product that is going to meet their needs and what is going to save…

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Is your HELOC costing you money?

Is your Home Equity Line of Credit costing you Money?   It was a trend years ago for your mortgage to be put into a home equity line of credit (HELOC) where you had access to revolving equity in your home and could pay down as you chose.  Back then, HELOC interest rates were close to fixed rates, making it attractive to have a open line of credit without any penalties. However, most have fallen into the trap of making interest only payments and not paying down that debt. The trend of HELOCs has faded as the Government of Canada…

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Buy now or wait for the rates to go down?

Buy now or wait for better rates ? Recently I was asked a great question from a local realtor.  Her clients are looking to buy BUT are on the fence about whether to buy now or wait 6 months to see if the interest rates go down. With the state of the economy now, there is anticipation that home prices may drop in the future, however there is also talk that mortgage interest rates are on the increase. What is the best option for saving money? Buy now or wait 6 months? There is no crystal ball in the mortgage world. …

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