Throughout the mortgage and home buying process, there are many steps and many checkpoints a buyer will need to complete before they can move on to the next one. A buyer will not be able to close on a purchase if they do not have a lawyer. Financing conditions need to be lifted after confirmation from a mortgage broker that a file is broker complete. A buyer should never write an offer on a home until they have a realtor working for them. Most importantly, a buyer should never be looking at property they are considering buying until they have been pre-qualified and pre-approved.

Now, one thing we need to make clear- pre-qualified and pre-approved are two different things. Pre-qualified is when someone completes a mortgage application with a mortgage broker or a bank representative and is told how much they can afford. Pre-approved is when someone has written confirmation from a lender stating they are willing to lend based on what is stated in an application and the applicant’s current credit history.

The difference?

Pre-qualifications are based solely on the knowledge and experience (sometimes even opinion) of a broker or bank rep. A pre-approval on the other hand is backed by the lender actually willing to give you the money. When someone says they are pre-qualified, that means they have taken an application with a mortgage broker or bank and in broker or bank rep’s opinion, they can afford “x” amount on a home. A pre-approval is a written letter from a lender stating based on applicants current credit history, declared income on application and current assets, we will lend “x” amount pending confirmation everything stated in the application is verifiable and the property meets all lender requirements.

As you can probably tell, one can be more reliable than the other, especially if you are working with a mortgage broker or bank rep that is inexperienced in the industry. Pre-approvals also usually come with a rate hold. What a rate hold does is guarantee you the interest rates that lender is offering today for a certain amount of time (usually 120 days), and if you put an offer on a place within that time period, they will give you that previous rate even if they went up. If rates go down, they will allow you to access the lower interest rate as well.

You must always get yourself pre-qualified before you begin looking at homes so you know what you can afford. Once you have and you are actively looking, it is very important you try and get a pre-approval before you write an offer. It will give you that extra confirmation your application is acceptable, and protect you against interest rate increases while you look.

If you require a pre-qualification, pre-approval, or want to speak with someone about your current situation, please give a Dominion Lending Centres mortgage professional a call.

Written by Ryan Oake

Your First Home. What a THRILLING thing that is to think about!! One of the best parts about our job is helping individuals purchase their first home. We know that the process can seem daunting at first, but we have an in-depth understanding and knowledge of what steps are required to make the process go smoothly. Follow these and you will be turning the key into your new home before you know it.

1. Find a Fantastic Mortgage Broker
Finding a mortgage broker who can help with your pre-approval process can allow you to determine the price point of home you can really afford. Finding a mortgage broker right off the bat can also give you an advantage over working with your bank:

• Mortgage Brokers work for you, not the bank or lender
• They have access to multiple lenders and are not limited to one single product
• They are an expert in the field. They focus on mortgages and mortgages alone!

2. Get Comfortable With The Numbers
There are two numbers that all first-time homebuyers should keep in mind: 39 and 44. These two numbers can help you budget and determine what you can truly afford when looking to purchase a home. Why 39 and 44? Here’s why:

• A maximum of 39% of your total income can go towards your housing costs. This will cover your mortgage payment, property tax payment, heating costs, and strata fees.
• A maximum of 44% of your total income can go towards your housing costs and total debt payments. This will include ALL housing costs and all debt repayments (credit cards, car loans, student loans, etc.)

Now, here are a few other key numbers that can help you in your house hunting:

3. Know What Your Down Payment Needs to Be
You know the numbers, now let’s look at what you need to know about the down payment itself. First, if you have less than 20% down payment your mortgage will be insured and have insurance premiums added to your mortgage. If you are considering putting the minimum down, that would be 5% if the property is worth $500,000 or less. A down payment of 10% is required for any amount over $500,000. Here’s a quick example of what this looks like:

Purchase Price of $600,000

5% of $500,000                                   $25,000

10% of $100,000                                             $10,000

Total Down Payment:                                   $35,000

4. Take Advantage of The RRSP Home Buyers Plan
The Canadian government’s Home Buyers’ Plan (HBP) allows for first time home buyers to borrow up to $25,000 from you RRSP for a d own payment, tax-free! You are able to combine this with your partner if you are both first time home buyers you can both access the $25,000 from your RRSP for a combined total of $50,000. Certain qualifications do apply for you to use this plan, we have laid them out here for you to review.

5. Don’t Forget About the Closing Costs!
This is one so many people overlook! Closing costs are something that can add up quickly when you are purchasing a home. Here is an approximate breakdown of the funds you will need:

• Legal Costs: $1000
• Title Insurance: $200
• Appraisal: $350
• Property Transfer Tax: Pending on purchase price

An additional few facts on property tax for you to consider:

This is an approximation of what your closing costs may be, but it is always good to budget for them beforehand.

6. Have your Documents Ready to Roll
Mortgages = paperwork! There are a number of documents that you will need to have to give to your mortgage broker. This will vary depending on your employment situation and where your down payment is coming from, but here is a general list you can follow:

• Most Recent paystub
• Letter of Employment
• NOA’s (2 years)
• T4’s (2 years)
• Down payment verification—up to 3 months of bank statements
• Contract of Purchase and Sale (Your realtor will provide this)
• Property Disclosure Statement (Realtor will provide)
• if you are self-employed you may also have to show:
  o T1 Generals
  o Articles of Incorporation
  o Financial Statements

7. Start Working on Your Credit Score
Yes, your credit score does directly impact your ability to get a mortgage. Lender’s want to see that you can responsibly manage credit and debt repayment before loaning you a large sum of money to purchase a home. Your credit score will be a determining factor in the terms and rate associated with your mortgage.

Just what impacts your credit score? Good question! Here are a few things:

• Late payments will lower your score
• Collections, judgements, consumer proposals, bankruptcy this will lower your score
• Exceeded limits on credit cards
• Ideally, you will be able to show a minimum of 2 active and current trade lines
• The longer your trade line is, the better increase in your score!
• Lenders also like to see a minimum of $2,000 limit on your credit cards.

Understanding and using this knowledge can help make your first home buying experience a great one! Once you have gone through the pre-approval process with a mortgage broker the fun part begins! Upon you receiving your preapproval, you can begin the house hunting. From there, you can put an offer on your dream home (yay!) Once your offer is accepted, we go through the mortgage process with you and then it’s moving day for you!

This is an exciting time for first time homebuyers—we enjoy getting to help our clients go from start to finish and helping them get the keys to their first ever home. If you have questions or are looking to find out just how much you will qualify for you can check out our mortgage calculator OR you can reach out to a Dominion Lending Centres mortgage professional directly!

Written by Geoff Lee

There is quite a bit of information being passed around about growing marijuana in your home that could or will  prevent the sale of your property down the road.

CMHC is Canada’s federally owned mortgage insurer. As of October 25, 2018, their stance on homes that were former grow operations has not changed and reads as follows:

“At this time, CMHC is not making any changes to its mortgage loan insurance policies in relation to the impending  legalization of cannabis. CMHC will continue to insure mortgage loans for homeowner residential properties (1-4 units) and multi-unit residential properties (5+ units) where cannabis was previously grown and/or will be legally grown.
We will also monitor the impacts of the Cannabis Act on our mortgage loan insurance activities over the long term. We will also be reminding Approved Lenders that, in cases where property damage has occurred, they are required to disclose this information to CMHC in making the request for mortgage loan insurance and confirm that remedial action has been taken to address any related property damage/alterations,” Courtesy Beverly LePage, Client Relations – CMHC.

HOWEVER, in my opinion as a mortgage broker, it is the damage to the home from a “typical illegal” grow op that is most important here. When one hears “grow op”, you picture rooms full of plants with lights and irrigation lines with no care taken to prevent irreparable damage to the home.

Please consider the following scenarios.

Tomato Enthusiast #1
Tomato enthusiast #1 absolutely loves tomatoes. He/she finds them relaxing and even fun to share with friends. Tomato  enthusiast #1 places dozens of tomato plants in every room of their home with full irrigation and grow lighting. Without proper ventilation, this caused a drastic increase in humidity in the home. If that were to continue,  a dangerous mold condition may develop, making the home uninhabitable. In this case the damage that
Tomato enthusiast #1 caused may prevent a mortgage from being placed on the property by the lender and/or insurer.

Tomato Enthusiast #2
Tomato enthusiast #2 also loves his tomatoes but not quite as much as #1. He/she enjoys having a few slices on toast on a Friday evening as a weekly treat. Tomato enthusiast #2 places 4 tomato plants in front of the living room window and daily watered and talked to them pleasantly. Having 4 tomatoes plants in the home was not illegal before October 17th and probably never will be. With proper care the 4 tomato plants thrived and never caused any damage to the home. A few weeks down the road Tomato enthusiast #2 decided to sell the property.  When their trusted realtor arrived to list the home there was no apparent damage caused by any plant or animal
that resided there and it was immaculate. It is highly unlikely that the presence of 4 tomato plants would prevent approval by a mortgage lender or insurer.

If you have any questions, contact a Dominion Lending Centres Mortgage Professional near you.

Written by Kevin Carlson

So you’re wanting to buy a new home? That is some very exciting news. First question, are you prepared?!
We all know big-item purchases are scary. It’s expensive, you are fully committing to this household – there is no turn backing without that pricey consequence. We totally get it.
The ultimate first-step is to do your research. You are going to want to find out the essentials before you start hunting for those pretty houses listed on Pinterest!
Let’s start here.

Credit History 
• How many credit cards do you currently have under your name?
• Do you pay your bills on time?
• How many loans do you currently have?
If you own a credit card or have a loan with an established bank, you have credit history. This information is then transferred into a financial summary known as a credit report.

Credit Report
Your credit report states these vital pieces of personal information (DO NOT let other people in on your personal finances. This should be a give-in by now!)
• first and last name
• home address
• social security number (SIN)
• credit cards
• loans
• how much money you owe
• whether or not you pay your bills on time
All this ‘credit’ talk is important because it allows lenders to determine IF they will lend you money. Your lender, whoever you choose to go with, will be on your credit situation right away. The sooner you know what is on your credit, the better!
As for your credit score, it’s best to only have it checked once as having multiple credit check by different lender can cause it to change. Let us know. We’d be happy to help here.

Employment 
It is important to have a steady income and also proof of employment for the last two years. Any changes to your employment have to be explicitly explained. Gathering these documents a head of time can save headaches later.

Down payment 
In Canada, you need to show a 90-day history of the down payment to prove you have not borrowed the money. We will need to see any movement of that money within the 90 days so its best not to move it around. You are allowed to get a gift from family for the down payment but this money must not be repayable and we will need a letter from that gift giver explaining that!

Consult Your Wish List 
It’s good to know what you want in a home if you can do it realistically. Buying a house for two? Thinking of expanding your family? You need to consider what life will look like down the road before you commit and sign that paper. Nothing would be worse than to move into a house that eventually ends up being too small because a couple of kids came into the picture or in a similar situation those grown-up kids come back home from college, university – you get the picture.
It’s also reasonable to think about factors in your dream home such as maintenance, renovations, the longevity of your stay, etc. Cover all bases, it is way better to be safe than sorry.

Finding a Broker 
Who should you use to find the best mortgage for you? We think a Broker (like us), especially if you’re a first-time home buyer. There are many lenders in Canada and a broker will be able to sort through all your options.

Finding a Realtor
When it comes to a realtor, you want someone reliable. Makes sense right? A couple ways you can find out whether or not a certain realtor is legit is by doing some online research:
• Do they have a website/social media accounts? Go check it out!
• Double-check if their licence is registered and legitimate
• Look up their client feedback/disciplinary comments against them
• Check out their current listings – price range, are they a busy/relaxed business?
• Send them an e-mail with any questions! Do they have the appropriate knowledge?

Feeling better about buying that first Home? That’s exactly what we like to hear. If you have any other questions, call a Dominion Lending Centres mortgage professional today.

Written by Chris Cabel

Self-employed individuals are quickly becoming one of the most common clients that we handle. Daily we have successful business owners come into our offices who enjoy the perks of being an entrepreneur. One of these includes fantastic write-offs that allow them to bring their income down to a low tax bracket.

However, this benefit can also mean that the same business owner may have a hard time qualifying for a mortgage all because their income is significantly reduced on paper… how frustrating ‘eh? But these savvy business owners know that there is advanced planning that is involved in being able to qualify for conventional financing. Back in 2015, Statistics Canada reported that there were about 2.7 million people self-employed in Canada… which is an astounding 14% of the total population of Canada! What does that stat mean? Two things:

1. That being self-employed is a more than viable way of earning income in today’s world.
2. That 14% may not fit into the conventional lending “box”

The Conventional Lending Box
To fit into this box, self-employed individuals must meet certain qualifications. For example, they must be able to provide:
>Two most recent years of personal tax returns
>Two most current years Notice of Assessments
>Two most current years financial statements
>Statement of Bank Account Activity
>Investment Income Statement
>Photo ID

Now, the one area that raises a red flag in the above is the tax returns. As we previously mentioned, their income claimed on the return itself might be significantly different than their actual income. Tax deductions related to business often reflect meals, rental spaces, credit card interest etc. The result is that the income the self-employed business owner shows on their tax return is a significantly lower figure than what their actual take home pay is. However, the conventional lending box requires income to justify the mortgage. So how do we pull this off?

The Unconventional Lending Box
Now please keep in mind that “unconventional” in this box just means that as a self-employed individual, you are going to work with a Mortgage Broker to find an alternative to allow you to show that you can justify the mortgage. There are several well-known and consistently used pieces of advice that we would like to pass along to you:

1. If you are organized and planning (think 2 years out) you can plan to write off fewer expenses in the two years leading up to the property purchase. Yes, you will pay more personal taxes. However, your income will be higher, and it will be easier to qualify you for the mortgage amount you are seeking.
2. Set up your finances through a certified accountant. Many lenders want to see self-employed income submitted through a professional rather than doing it yourself. The truth is that the time you spend doing your own taxes will not be nearly as efficient both financially and time-wise as a professional. Make sure that you discuss with them what your goals are so that they can set up your taxes properly for you!
3. Choose your timing carefully. If you are leaving for an extended holiday within the two years before purchasing, your two-year average income may fluctuate. Plan your vacations and extended trips away with income in mind.
4. Consider using Stated Income. You have the option to state your income. This is based on you being in the same profession for 2+ years before being self-employed. The lender looks at the industry and researches the mean income of someone in that profession and with your experience. You will be required to provide additional documents such as bank statements, showing consistent deposits and other documentation may be asked of you to show your income.
5. Avoid Bankruptcy at all cost…. or if you do declare bankruptcy have all your discharge papers on hand to present to the lender and ensure you have two years of re-established your credit.
6. Mortgage Brokers can state income with lenders at the best discounted rates. But if you do not qualify with A lenders using stated income, then a broker will work with you to utilize a B Lender who are more lenient but may come with higher interest rates and applicable lending and broker fees.
7. Last but not least, if A or B lenders don’t fit, private financing can be looked at as an alternative option in order to get you into the market and offer a short-term solution to improve credit or top up your reporting income. Then you and your broker can refinance into an A or B lender at that time. Just keep in mind that private lending will have a higher rate associated with it , with lender and broker fees added on as well, if you choose to go with this option.

So, to all of our self-employed, hard-working, determined individuals, take heart! You can qualify for the mortgage you want, it just takes a little more planning to get everything in order. Keep in mind to that every lender has different guidelines as to how they view self-employment. Working with a Dominion Lending Centres broker leading up to your property purchase can help you ensure you get the mortgage you want.

Written by Geoff Lee

If you have a mortgage, you’ll be completing a mortgage renewal when your current term has finished.
While most Canadians spend a lot of time and expend tons of effort shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal?

Mortgages terms are locked in rates that are *over a set term* which can vary from 1-10 years.

About 3 months before the end of your term, your current lender will suddenly become your best friend showering you with attention and trying to entice you with early renewal offers…And the first offer is never their best. It really shows how they value the relationship.
“Please, please sign here on the dotted line to renew… it’s sooo easy!!”

You have 3 options

1. Sign and send back with no alterations or changes (don’t do it, really I mean it… don’t do it!!)
2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
3. Talk to a mortgage expert and together we can discuss the best options available for your situation

Lenders know that 80% of people will sign their renewal forms because it’s fast, easy and convenient. Banks & lenders push this “take it as it is” tactic to borrowers to ensure they make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get.
Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home… don’t forget!
It is true that signing the renewal document is easy, however it is in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket.

5 steps to save you money on your mortgage renewal

1. Receive the renewal offer from your current mortgage lender and examine immediately. This gives you enough time to make an informed decision
2. Do your online research about the best current rates for you
3. Call your current lender and negotiate!
4. If your lender will not offer you a better rate then it is time to move your mortgage. You will have to complete a mortgage application and gather applicable documentation just like you did for your original mortgage, but we will help with most of the work!
5. Take a look at your budget and see if you can increase the amount of your mortgage payments. This will eventually save you money by paying off your mortgage faster

Your mortgage is one of your biggest expenses. For this reason, it is so important to find the best interest rates and mortgage terms you possibly can.
As you can tell there is lots to discuss about mortgage renewals. We can help. Contact a Dominion Lending Centres mortgage professional today!

Written by:  Chris Cabel

We recently had a couple come into our office who we had worked with in 2011. They had some life changes that had occurred in the past 7 years and were unsure if they could make things work. They came back to speak with us and shared a little bit of their story and thoughts on working with a broker. Check out their story below! **Names Changed for privacy purposes**

Jane and her husband Kevin never in a million years would have thought that they could own a detached home in the Fraser Valley. One look at the market and they felt “stuck” where they were in their two-bedroom townhome in Kamloops, British Columbia. They had purchased their townhome in 2011 by working with us at Dominion Lending Centres.

They loved their little home but a job opportunity for Kevin opened up and the need for more space (with baby #2 on the way) was pulling them towards the Fraser Valley. Now they had their doubts about being able to afford a house in the Lower Mainland. They had strong credit and very little debt, but there is always the “unknown” when you are looking at buying a home. They decided to reach out to their us again—and we were all in to make their dream become a reality!

After a few weeks of shopping around they found a picture-perfect home in the Valley for $675,000—and were able to move in just last month (just in time for the holidays!)

When asked why they opted to work with a broker, they said it was due to the ability of Mortgage Brokers being a “One stop shop”—no shopping around from bank to bank or having to have your information pulled and sent off to several different lenders. It was all done for them. They were able to send all of their information and let us do the rest. And the best part for Jane and Kevin? We got them a great rate back in 2011 and were able to do the same in 2018!

Why else should you choose to work with a broker instead of the bank? Just a few reasons for you…
1. A broker can access rates that your bank can’t. They can access:
i. Tier 1 banks in Canada
ii. Credit Unions
iii. Monoline Lenders
iv. Alternative Lenders
v. Private Lenders

This extensive network allows brokers to ensure that you are not only getting the sharpest rate, but the mortgage product is also aligned with the client’s needs.

2. A broker will negotiate on your behalf, directly with a lender. There is no “grunt work” needed on your part—your mortgage broker does it all for you.
3. A Mortgage Broker can produce and show you several different options so that you can select the optimal product for your specific needs. A broker won’t just look at the rate, they will also look at:
i. Prepayment options
ii. Costs of Borrowing
iii. Portability
iv. Blending and Extending
v. Penalty to break
4. A broker can save you some serious cash! Because they have access to a multitude of different lenders and can offer discounts the bank can’t people end up saving money when they work with a mortgage broker.
5. Working with a broker means you have someone on your side—always. Mortgage Brokers will work to provide you with industry information and updates long after your mortgage is completed. They want to make sure that the product that was right for you when you signed is still the right one for you today and in the future.

Mortgage Brokers are a dedicated group of individuals who work directly for the client, not the lenders or the bank. Brokers are problem-solvers, advisors and honourable individuals. We work hard to give our clients the best that we can in an industry that constantly is evolving and changing.

Kevin and Jane made the right choice working with us here at DLC.

Written by Geoff Lee

2017 was a year of change for the Canadian Mortgage Market. With the announcement of the B-20 guideline changes requiring all insured or uninsured mortgages to undergo stress testing. In addition, the removal of mortgage bundling and the continued rate rises from the Bank of Canada have led to significant changes in mortgage rates.

This raises the question: what does 2018 hold? While we cannot be 100% certain, based on predictions and summarizing stats from various corporations, we are able to put together a strong prediction of what 2018 will hold.

The Real Estate Market

As a whole, the Canadian real estate market is expected to see a 5.3% drop in national sales due in large part to the new OSFI guidelines (CREA). With this, there is an expectation of minimal growth for home prices at just 1.9% vs. the 8.5% gain seen in 2017. This is due again to the heightened stress testing procedures.

In addition, the sales of condos and townhomes are expected to increase with new developments of multifamily complexes reaching an all-time high, and the demand for smaller, more affordable houses increasing.

So, what does that mean for home prices? CMHC predicts that the average home price is to increase from a range of $493,900-$511,300 in 2017 to a range of $499,400-$524,500 by 2019.

Essentially, the market is going through a period of increased demand for condos and townhomes, leading to potential price increases. In relation to the detached home market, there will be slight price increases, but nothing compared to the growth that was seen in 2016-2017. There is an ongoing trend for homebuyers based in Vancouver and the Fraser Valley to contentedly sit by the sidelines as they save up for a larger down payment before purchasing-further increasing condo ownership and driving demand for rental properties as well.

The Economy

The Canadian Economy has been growing and surging forward through most of 2017. In the four quarters from the second half of 2016 to the first half of 2017, the Canadian Economy grew on average each quarter by 3.6%. Further, despite a slight slowdown in the second half of 2017, there was a rise in employment Canada wide, posting the annual real GDP growth over 3% in 2017. It was a substantial year for the Canadian economy in 2017 and this growth was directly seen in the real estate and housing market.

As many are aware, to stabilize the economy and ensure balance remains, the Bank of Canada began raising interest rates in 2017 and has plans to continue to do so in 2018. This rise in interest rates serves to steadily and slowly stunt the growth of the economy in Canada. Coupled with the ongoing trade disputes, the Canadian economy is forecasted to slow overall, but will still post an above-trend 2.2% of growth in 2018.

The Mortgage Market

So, what does all of the above mean for the mortgage industry and its rates? Well, with the predicted increase in rates from the Bank of Canada it is safe to say that the mortgage rates will follow.

CMHC summarized that the expected interest rate increase over the near-term horizon will bump the posted 5-year mortgage rate to lie within 4.9% and 5.7% in 2018. For 2019 that number increases to 5.2%-6.2% range*

In layman’s terms, the rates are likely to continue to rise alongside the Bank of Canada’s increases. It is important to keep in mind that with planning and budgeting these rates can easily be taken on by the average consumer. A key thing to keep in mind is that a 0.25% rate increase works out to only $13.00/100k increase in your payment. Another fact is that every lender is different in how they will calculate this change. Your mortgage product is unique and may be affected differently than another.

Since the new changes have rolled out there has been a slight decline in consumer demand. As the changes continue to take effect and the potential for more rate increases continues, it becomes more apparent we will continue to see a shift in the mortgage and real estate market.

However, by choosing to work with a Dominion Lending Centres mortgage broker you are guaranteed to work with someone who has an in-depth understanding of both the changes and the market. They will work alongside you to find the best possible solution to get you the sharpest rate.

Written by Geoff Lee