Confused Mortgage Insurance If you put less than 20% down on a property, then you may be familiar with mortgage default insurance, some people refer to this as CMHC insurance. Truth be told, there are three providers of this type of insurance, CMHC, Genworth and Canada Guaranty. That said, mortgage default insurance should not to be mistaken for mortgage creditor insurance. Mortgage creditor insurance protects the ownership of your family’s home by making sure the mortgage keeps getting paid or gets paid out during the most difficult of life’s circumstances. There is confusing amongst clients with understand which is which. By law, lenders can only provide mortgage financing to those with at least a 20% down payment, unless the mortgage is insured against default. Now in some instances, mortgage default insurance may also be required by some lenders for individuals with more than a 20% down payment. Why is this you ask? Some lenders require this because the loan is considered higher risk, such as self-employed borrowers or properties in remote locations. It also allows lenders to access cheaper funds for mortgage and in return give their borrowers much lower interest rates. Who Pays the Premium Sometimes the client does

Better Option For Mortgage Life Insurance Buying a house can be a stressful and exciting event. It’s not surprising, then, that first-time buyers can inadvertently sign up for something they may not need—like mortgage life insurance. Clients  know about their mortgage payments and property taxes, but they weren’t sure if they had insurance for the mortgage. If something happened to one of them, how would they pay it off? Inadvertently buying mortgage life insurance is a common occurrence. (Mortgage life insurance is also called mortgage protection, creditor insurance or simply mortgage insurance, but it’s different from mortgage default insurance or CMHC insurance, which protects a lender if a homebuyer who makes a down payment of 5% to 19.99% can’t pay the rest of the mortgage.)  As first-time homebuyers, the couple was new to the mortgage process and waded through a lot of options, but didn’t talk about insurance with the bank. Bank employees are often “simply checking off a box on the application”. The clients don’t discuss their health or disclose any pre-existing health conditions like diabetes or heart disease; the bank doesn't demand a medical examination or medical records. This is crucial because for clients, who already have diabetes

Variable Rate Mortgage Are You in a Variable-Rate Mortgage? If you’re in a fixed-rate mortgage, this news has no impact on you. Mind you, ‘impact’ is too strong a word for the subtle shift that occurred Jan 17, 2018. Short Version The math is as follows: A payment increase of ~$13.10 per $100,000.00 of variable-rate mortgage balance (unless you are with TD or a specific credit union, in which case payments are fixed and change only at your specific request) For example, a variable-rate mortgage with a balance of $400,000.00 will see a payment increase of ~$54.40 per month Personally, we are staying variable, for a variety of reasons… Long Version Qualification for variable-rate mortgages has been at 4.64% or higher for some time. This requires a household income of greater than $70,000.00 for said $400,000.00 mortgage. Can 99% of such households handle a payment increase of $54.40 per month? Yes. Will 99% of households be frustrated with this added expense? Yes. Ability and annoyance are not the same thing. Have these households enjoyed monthly payments up to $216.80 lower than those that chose a fixed-rate mortgage originally? Yes. Are 99% still saving money over having locked into a long-term

Reasons of Breaking Mortgage by People Research shows that 60% of people break their mortgage before their mortgage term matures?  Most homeowners are not aware that when you break your mortgage with your lender, you will have payout penalties and those penalties can be very expensive.  Many homeowners are so focused on the rate that they are ignorant about the terms of their mortgage. Is it sensible to save $15/month on a lower interest rate only to find out that, two years down the road you need to break your mortgage and that “safe” 5-year fixed rate could cost you over $20,000 in penalties? There are a variety of different mortgage choices available. Knowing the 9 reasons for a possible break in your mortgage might help you avoid them! 1. Sale and purchase of a home: • If you are considering moving within the next 5 years you need to consider a portable mortgage. • Not all of mortgages are portable. Some lenders avoid portable mortgages by giving a slightly lower interest rate. • Please note: when you port a mortgage, you will need to requalify to ensure you can afford the “ported” mortgage based on your current income and

Divorce Among other things, divorces and separations can often leave deep financial wounds. In the case of mortgages, they can be messy and complicated. If you are undergoing a separation, it’s important to know that you have options that can help make this ordeal easier. One tool you may want to consider is our spousal buyout program. Who is this program for?  Our spousal buyout program is intended for those instances where two people, whose names are on a single mortgage, have decided to separate and one of them wishes to stay in the home. Perhaps this is so that any children involved won’t have to move, but the reason why one person wishes to remain in the home is irrelevant. In most cases, this program is used in situations of divorce, but it is also applicable for siblings or even friends who jointly owned a home and now want to go their separate ways. How does this program work?  Through this program, it is possible to finance up to 95% of the home’s purchase price in a private sale in order for the other party to be bought out. These proceeds can only

Bank Canada Rate Review 2018 Bank of Canada will be reviewing interest rates  in 2018 to determine if the bank rate needs to increase or decrease.  If you are in a variable or a HELOC product this is an important time for you.  The following at the review dates for 2018: January 17 - Interest rate announcement and Monetary Policy Report March 7 - Interest rate announcement April 18 - Interest rate announcement and Monetary Policy Report May 30 - Interest rate announcement July 11 - Interest rate announcement and Monetary Policy Report September 5 - Interest rate announcement October 24 - Interest rate announcement and Monetary Policy Report December 5 - Interest rate announcement If you would like to discuss the impacts of this wit your mortgage please call 403.875.2969 Patricia McKean

Ensure Educated Mortgage Product It is so important to make sure you are being educated on the mortgage product you are being offered. We have a situation now where a home seller has an XXX mortgage. The home is in the starting stages of foreclosure but their realtor has found a buyer. Financing complete on our end for the new buyer and the deals goes to the lawyer. The seller has to pay $11,000 out of pocket to make up the difference from the sale to what she owes XXX. The seller confirms she has this and ready to close. Meanwhile our client has gave notice to the rental, packed all his contents and is ready for moving day. Lawyer goes to request funds and finds out that the seller has a collateral mortgage with XXX which gives them to power to call all debts owned by this client. Down to the final hours and now the seller must come up with $9500.00 to pay off a visa. This could potentially kill the whole deal. The seller was not aware that having a collateral charge mortgage would give the bank this power and now may lose the house to foreclosure.