Mortgagenomics Canada

Can BC Provincial Nominees qualify for a mortgage?Yes! A BC Provincial Nominee is eligible to qualify for a mortgage in Canada. Here are the key mortgage qualification criteria to be aware of when qualifying for a mortgage as a BC Provincial Nominee:you can purchase a property with as little as 5% down payment, but only for purchases under $1Mfor purchases that are $1M or greater the down payment increases to 20% and potentially higher depending on how large your purchase price is (down payment can reach up to 35% for purchases that exceed $2.5M)must have relocated to Canada within the past 2 to 5 yearsmust be employed for a minimum of 3 monthsfull income confirmation is required (recent pay stub and employment letter)a 90 day history of your down payment funds are required (i.e. bank statements, investment statements, etc). If you are unable to provide a 90 day history, then prepare to explain where the funds were derived from along with applicable documentation to verify so (i.e. from sale of

How to get the lowest possible mortgage payment?Sometimes life presents you with some expensive curve balls and before you know it your monthly budget creeps up and you're suddenly in a pinch. This happens to Canadians more than you can think and oftentimes the mortgage payment is looked upon as the primary means to bring you back to that financial comfort zone.Here are 4 ways to get the lowest possible mortgage payment:Request that your mortgage amortization be increased to its maximum. This can significantly decrease your mortgage payment, but it all depends on how your mortgage was underwritten with the lender it is currently with. For example, your amortization may currently be at 23 years and 8 months, but it possibly may have been underwritten at 30 years. If this is the case, your payment would be eligible for a drastic payment reduction.Convert all, or a portion of your mortgage into a Home Equity Line of Credit (HELOC). A HELOC payment does not include the principal portion t

Here is a breakdown of the the two types of variable rate mortgages:Capped Variable Rate Mortgage:the interest rate fluctuates when a lenders prime rate changesgenerally, your payment amount stays fixed for a determined period of time or up to a certain threshold of rate increases (as outlined by your specific lenders loan terms and conditions), however, the interest rate will fluctuate with any changes in Prime rate. If Prime Rate goes down, more of your payment will go towards paying off your principal; if the Prime Rate goes up, more of your payment will go towards interest costs rather than the principal pay down.Adjustable Variable Rate Mortgage:the interest rate fluctuates when a lenders prime rate changesyour payment amount adjusts automatically to reflect changes in the Annual Interest Rate and in the number of days in the month. This means your payments may change from payment date to payment date.Contact Marko, he's a Mortgage Broker!604-800-9593 direct Vancouver403-606-3751 dire

8 First Time Homebuyer Tips1) Be aware of the minimum down payment requirements5% up to $500,000, then 10% on the balance thereafter up to $999,99920% for $1M purchases up to $2.5M, then 40% on the balance thereafter2) Be aware of closing costsClosing costs are ancillary expenses throughout the process of completing your real estate transaction. In addition to your down payment funds, the lender will also request document verification for closing costs. All of the following costs are out-of-pocket and not included in overall mortgage:Pre-Closing Date Costs: Home Inspection Fee ($200-$400), Home Appraisal ($300-$400) Closing Date Costs: Land Transfer Tax (this will vary depending on city/municipality). In British Columbia, the property transfer amounts to 1% of the first $200,000, then 2% on the amount over $200,000 up to and including $2M, and 3% thereafter (i.e. for a $900,000 property purchase, your Land Transfer Tax would amount to $16,000).&

Intro (pre-amble): up to 13:10 mark of podcast (Canada's post election promises; tax the flippers, ban the foreigners, eliminate blind bidding, and increase the minimum down payment cut-off to purchase a home | is China's Evergrande shrapnel Canada bound?)Ok, so this isn’t necessarily the 100-step procedure on how to get a mortgage if you are new to Canada, but these are a summary of the most common pain points...so other stuff like income qualification I’ve left out because the criteria for income is pretty much standard and kinda common sense. So, here the the key qualification criteria to be aware of (if you are new to Canada and want to purchase a property):Make sure your funds/cash are ready to be cashed. This is critical in two ways; (i) to ensure that the deposit to place a competitive offer is ready for swift movement during the offer stage, and  (ii) equally important but often problematic is that the funds are fully verified by the lender (which leads to my next point) 

Pre-episode Talk (up to 11 minute mark): Modern Monetary Theory, Canada's inflationary path, and my thoughts on how to position yourself on the right side of a volatile economic environment. Episode Notes:Down Payment Sliding Scales:Over the years down payment guidelines have inserted a component within the qualification criteria known as "sliding scale". Oftentimes it could catch a buyer off guard when budgeting for a purchase leaving them scrambling for the unexpected shortfall in funds. The first bullet point below is the industry standard adhered to by all lenders in Canada, but the second bullet category varies with lenders and is scaled as per locations/regions and the lenders specific risk tolerances. For contrast, I've included the most competitive scales for Vancouver and Calgary.Minimum down payment thresholds for Vancouver:5% down payment up to $500,000 Purchase Price, then 10% on the balance that exceeds $500,000 up to $1M Purchase PriceEXAMPLE: for a $800,000 Purchase, the mi

With real estate prices soaring across the country many applicants are seeking assistance when it comes to qualifying for a mortgage.  More commonly, the assistance comes in the form of gifted down payments from the Bank of Mom & Dad, but coming in a close second these days is the addition of applicants to help combat the rigid income qualification criteria.  You have likely heard of the term, Co-Signer.  This is the 11th hour addition to a mortgage application (usually mom or dad) that gives the qualification effort that extra little boost required to get the main applicants over the hump.  But what many people don't know is that there are two types of co-applicants and various conditions and characteristics associated with each one; a Co-Signer and a Guarantor.  Here are the distinguishing factors of both:Key Characteristics of a Guarantor:Guarantors are usually added to an application when the main applicants can sufficiently qualify based on their income, but instead have some

If you're about to secure a mortgage, here's something you might want to consider regardless of whether it's a purchase, refinance or renewal.  Make the mortgage readvanceable.What does readvanceable mean?Firstly, a readvanceable mortgage starts out as a typical mortgage where a specific portion of your payment goes towards the interest charge and the rest gets directly applied towards the mortgage principle gradually paying it down over time, thereby, building equity in your home.  But this is where the similarities stop and the readvanceable mortgage begins to impose its leading characteristics.Firstly, readvanceable mortgages include at least two components; a regular principal-interest mortgage and a Home Equity Line of Credit.  The supplementary Home Equity Line of Credit acts as the primary component that allows the mortgage to become readvanceable.  A mortgage becomes readvanceable when the first mortgage payment is made and it continues on until the mortgage is eventually paid off.

Why are personal income tax documents required when qualifying for a mortgage?In most cases, personal income tax documents are required particularly when qualifying self employed applicants. But over the past few years, the Canadian mortgage underwriting standards have increasingly expanded upon its qualification criteria. As a result, the request for personal income tax documents from mortgage qualification applicants has quickly become the norm for all employment types, rather than the exception.Let's first identify the key personal income tax documents that lenders typically request:T-SLIPS (generated by your employer)The T4 is the most common of all T-slips and is also referred to as a "Statement of Remuneration". It is a tax form produced by a singular employer, you will receive a separate T4 from every employer that you were employed with in the calendar year. The T4 is useful for mortgage qualification purposes in that it confirms your total income

If the banks say no, what is your Plan B? (and yes, there is also a Plan C)For most Canadians the end game to qualifying for a mortgage is landing with one of Canada's Prime lenders (also known as the Big 5 or 6). And along with that comes the satisfaction of defeating/fulfilling the sometimes (or more like, everytime) extraneous qualification guidelines and eligibility criteria. But at the end of the day, it's totally worth it as you can boast about the great interest rate you were awarded and the exclusive membership to Canada's growing homeowner club.But what if the pathway to the Prime lenders is not successful for you, what then?Well, if all else fails, there is always a Plan B (and there is a Plan C too). But let's talk about Plan B first...I like to refer to Plan B as "BandAid" mortgages. They are typically 1 year terms (and also available as high as 3 year terms). They are fully renewable and feature most, if not all of the typical features and terms you would expect to see in a Prime m

With over 300,000 new residents arriving to Canada (and about 400,000 expected on an annual basis for the next 2-4 years), Canada's banks have been continuously altering and modifying their lending guidelines to accommodate for immigrant-friendly mortgage qualification programs. Today, I want to talk about mortgage qualification for temporary residents, particularly for work permit holders.What is a Temporary Resident?Directly from the Government of Canada's website:"A temporary resident is a foreign national who is legally authorized to enter Canada for temporary purposes. A foreign national has temporary resident status when they have been found to meet the requirements of the legislation to enter and/or remain in Canada as a visitor, student, worker or temporary resident permit holder. Only foreign nationals physically in Canada hold temporary resident status."So basically, a Temporary Resident is the first step to becoming a Canadian Citizen...but also, it could simply just b

A mortgage refinance is often a momentous and rejuvenating experience. For most homeowners it's an opportunity to reset and forge a new pathway to a more promising outcome (i.e. paying off high interest debt with low interest mortgage funds), and in the process of doing so, perhaps establishing or creating a more pronounced awareness of spending and more importantly, recognizing the consequences - of overspending. It's a second chance...and rather than calling on a family member or close friend to bail you out, you call on your home to do so. And then there are the refinancers coming from an entirely different angle...the ones that are looking to tap into their equity to further improve their net worth by borrowing from their home equity to invest. These are the refinancers who are set on leveraging good debt to create wealth and ultimately increase their net worth.Regardless of what it is that motivates one to refinance their mortgage, another outcome arises that is often not accounted fo

I often get asked what the minimum down payment requirement is to purchase another home. And by another, I mean residing in your current home as you are and purchasing another home that you or any one of your family members will frequent at one point throughout the year...like a home away from home. For example, it may be a vacation property a couple of hours from where you currently live, or perhaps a downtown condo across the country where your child is attending university.  Regardless of the location, as long as the property is intended for family occupancy at one point throughout the year, the minimum down payment requirement is 5%! Yep, that's it, 5% down payment to purchase another home! The formal name of the mortgage guideline is known as the Second Home Mortgage.Let me be clear though...notice that I am not referencing the other home as a rental property, but rather another home. Not only does the property have to be intended for family use only, but as i

11th hour mortgage qualification collapses...how to avoid themThere is no better feeling than closing a real estate transaction, especially if the journey to get there was rocky and filled with intense drama all the way to the bitter end. And if you’ve ever purchased a property before, you’ll know what I’m talking about...Regardless of the severity of these unexpected stressful deals, in most cases the real estate Gods (eventually) step in and somehow, magically, allow the deal to close out. But in some cases they do not appear (the real estate Gods) and you are left to fend for yourself without any spiritual or outer universe assistance. So listen on if you’ve been in a similar situation, or better yet, especially stick around if you haven't been in a stress-pot-real-estate-thriller transaction..as you never know what awaits you on that next offer!Today, I want to share my real life 11th hour experiences with you (and some are also borrowed from fellow brokers I've known over the years). Rathe

Is there such a thing as tax deductible mortgages?If you are a resident of the United States, the answer to this question is - yes.  For decades Americans have been able to apply the interest portion of their mortgage as a tax deduction against their personal income.  Regardless of whether it was an investment property or a principal residence - the interest was an eligible tax deduction.How about Canada, can we deduct the interest portion of our mortgage payments?Absolutely, but only if the mortgaged property is generating an income.  Here are some examples:Among other home expenses such as utilities and internet services, if you run a small business from your home a portion of your mortgage interest is eligible for a tax deduction against your personal incomeIf your principle residence includes a self-contained rental suite, a portion of your mortgage interest is eligible for a tax deductionIf you own a separate property that exclusively generates an income from short or long term rent/leases

A couple of weeks ago I talked about intergenerational wealth transfer and how reverse mortgages have propelled into the market place as a vehicle to access valuable equity with absolutely no monthly payment obligation.  The homeowner (who must be at least 55 years of age) can apply to access up to 55% of their home equity and use the proceeds for anything they desire.   Another intergenerational transfer scenario came across my desk this past week, but this time it involved selling off a family home to another family member with the use of a mortgage.  So nothing unusual here as far as the transaction is concerned - the purchase price was determined based on the fair market value and the qualifying mortgage was the means to close out the deal. But the unique part of the transaction was that the down payment was gifted from the selling family member to the purchasing family member in the form of equity.  So in other words, the purchasing family member essentially qualified f

Today I'm gonna talk about one of my favourite qualification guidelines - the High Net Worth mortgage.  This is truly one of those money-talks type of products...money talks as in, the more liquid assets you hold, the more mortgage you can qualify for. This mortgage really comes in handy for those applicants that are short on qualifying income, but instead are flush with liquid assets (i.e. non-registered investments, RRSPs, and cash savings).  Here are some common applicant profiles that are well suited for this program:business owners that declare low incomes but have substantial liquid assets (they do qualify, but not for the amount they desire)average income earners who ALSO cannot qualify for the amount they desire due to insufficient qualification income, but have substantial liquid assetsHere are the main qualification criteria:minimum down payment of 20%-35% (varies with lender)in addition to the down payment, the applicant must possess at least $250,000 in liquid assets:Eligible Assets

Wouldn't it be great if there was a mortgage that didn't require an income to qualify for it? And better yet, absolutely no obligation to make a single payment on the principal debt throughout the life of the mortgage?  Well there is! It's called a Reverse Mortgage.  Whether you're a fan of them or not, these mortgages are becoming increasingly popular every year and its likely to continue on the same trajectory as the baby boomer generation (1946-1965) continues to gracefully age.What is a Reverse Mortgage?A reverse mortgage is specifically designed for those that are 55 and above and the main feature of product is that the main qualification criteria is your age (rather than your income). And the other main feature is that there is absolutely no obligation to make a payment on the mortgage.Here are the key qualification criteria for Reverse Mortgages:must be at least 55 years of agemust remain in Canada for at least 6 months plus a day, each yearthe property that

When it comes to income verification for a mortgage a recent paystub and an employment letter will typically do the trick, even if you're a new hire and just have one full pay cycle under your belt.  However, things could get a little dicey if you are currently in a period of probation with your new employer.  The most common workaround for an applicant who is in the midst of a probationary period is to coordinate the completion date of your purchase with the expiry date of the probationary period.  A lender will proceed with the approval and condition for an updated employment letter and/or recent paystub to verify that the probationary period is no longer in effect. Lender guidelines generally dictate that probationary periods must pass (in their entirety) prior to the completion of the mortgage.  But in many instances a lender will overlook a probationary period provided that a good case can be made.  Here are some real life exceptions I've been granted on several files o

On Thursday April 8 (yesterday), The Office of the Superintendent of Financial Institutions, OSFI (the Canadian Bank watchdog) announced that they are proposing changes to the current stress test rule. So basically, consider this the last-call bell to qualify under the current stress test until June 1, 2021. It’s not 100% official as of yet, but the chances of OSFI not proceeding with their new recommendation is slim to none.Before I get into the proposed recommendation, here’s a quick recap on the current stress test:Rather than qualifying based upon the actual mortgage contract rate, all mortgage applicants are required to qualify at a rate that is 2% higher, or 4.79% - whichever is higher (4.79% is the predetermined 5 year benchmark as imposed by the Bank of Canada...since 2018, this benchmark rate has varied between what it is today, 4.79%, to as high as 5.44%). So throughout COVID (essentially all of 2020), applicants have been qualifying at 4.79% which has at some time