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REALTY GLIMPSE LIVEMARCH 28, 2019
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ME PROFESSIONALLY
• July will be 14 years with The Mortgage Centre
• 10 years as a CIBC banker
• Lending / Insurance / Investments
• Charter Member of BNI Northwest Success
• Rotary Club of Grande Prairie
• Grande Prairie & Fairview Chamber of Commerce
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MORTGAGE BROKER
• Expert
• One Stop
• Work for You
• Choice
• Special Deals
• Things move quickly
• No cost to you
• Relationship
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MORTGAGE
• Pride of Ownership
• Control
• Community
• Flexibility
• A mortgage, is a legal document you sign when buying or refinancing a home that gives your lender the right to take the property if you don’t repay the loan as agreed. A copy of your mortgage is filed in the county records as a lien, or legal claim, against the home.
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PRE-APPROVAL
• Means nothing
• Credit bureau will expire
• Rate hold
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PRE-APPROVALS
• This is the very first step before you begin shopping
• Your Pre-Approval should include:
• Purchase Price and other numbers• Payments
• Interest rates
• Down payment/Closing costs budget amounts
• List of the paperwork needed to proceed
• Information on the home-buying process
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DOWN PAYMENTS
• Owner Occupied• 5% down payment
• 1.5% closing costs budget
• Rental Property• 20% down payment
• 1.5% closing costs budget
• Second Home – vacation home or immediate family member to reside rent free
• 5% down payment
• 1.5% closing costs budget
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DOWN PAYMENTS
• Own Resources
• Gifted by an immediate family member
• Borrowed Down payment
• 1.5% closing costs budget saved from your own funds
• Two piece of credit for two years
• Minimum credit score (beacon) of 650
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5 C’S OF CREDIT
• Character
• Capacity
• Capital
• Collateral
• Conditions
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REMEMBER THE NUMBER
• Credit – 2 pieces for 2 years
• Overtime/Bonus – 2 year average
• Working for Family – 2 year average
• Business for Self – 2 year average
• Two jobs- both jobs for 2 years and a 2 year average is used for both
• Commission – 2 year average
• Bankruptcy – Discharged 2 years, 2 pieces of new credit for 2 years
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CREDIT RATING
• 2 pieces for 2 years
• Payments on time
• 65% utilization
• Cell phones, Federal and Provincial Student loans report but do not count as credit
• Mortgages now report to the credit bureau
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INSURER’S
• CMHC
• Genworth
• Canada Guaranty
• Insurers are required whenever there is less than a 20% down payment
• Sometimes due to the location and the property type, program being used lenders require insurer backing regardless of the down payment.
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APPRAISALS
• < 20% down payment your property will be electronically appraised by the insurer
• If more than 20% down payment is required at your cost
• If a specialty program one will be required at your cost
• Private Purchase
• Rental Property
• If you don’t pay for the appraisal, you can’t see it and neither can I
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PORTING
• Amortization remaining is IMPORTANT
• Straight Port – no new funds
• Port with New Funds – top up
• Port with a decrease
• Premium Credit within 2 years ish….
• Tiered
• Depends on how far along you are
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PURCHASE + IMPROVEMENTS
• Purchase/Renos submitted together
• On possession PURCHASE funds are released
• The RENO money is released once:
• The renos are done
• INSPECTED
• Receipts handed in; or
• The contractor invoice
• There are maximums and time limits for this program
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NEW TO CANADA – NEW TO CREDIT
• Within 5 years
• 5% down payment
• Rental reference letter
• 12 months bank statements
• Alternate source of credit
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LESS THAN 20%???
• Purchase new owner occupied with 5% down
• Move in & leave your existing behind as a rental
• Has to make sense
• Using rental income to qualify:
• Legal conforming suite and we can only use a % of the rental income
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DIVORCE
• This is tough
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THREE CHOICES
• One buys the other out
• You sell
• You wait
• Yes, you will need a separation agreement
• The home can be refinanced (purchased) up to 95% of the value for buyout and joint debt reduction
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SO THIS IS A THING
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I NEED YOU TO KNOW
• It’s not just Purchase Price
• Property Taxes
• Square Footage
• Qualifying Rate
• Every 10,000 up or down in purchase price = 46 - 51 per month in payment approximately
• Our files need to be complete with lenders 10 business days prior to funding
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2019 FEDERAL BUDGET
• CMHC FTHB Incentive Plan
• Fall 2019
• 120,000 maximum household income
• A mortgage no more than 4 times income
• 5% share equity mortgage - existing home
• 10% share equity mortgage - new homes
• Incentive paid back upon sale
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2019 FEDERAL BUDGET
• RRSP Withdrawal
• 35,000 max
• Breakup of marriage or common law relationship
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TRUE OR FALSE
• The second time you purchase the down payment is 10%?
• Keep credit cards maxed out?
• You can change jobs after you move into your home?
• You need a team of trusted advisors with experience?
• There are no fees to work with a mortgage broker?
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MY ADVICE TO YOU
• Everything happens for a reason
• Bad things happen to good people
• Get a pre-approval FIRST
• Sell your house subject to you obtaining financing on a new one
• Over estimate rather than under
• Make all mortgage payments on time to be offered a renewal without having to qualify
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THANK YOU!