January 20, 2010
Credit, Employed Persons, First Time Home Buyer, Pre Approval
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In a previous blog post I ran through the steps that most people take to get their first property. One of the steps that I had written I didn’t have a previous blog post about – Get your down payment prepared.
The down payment is a critical part to getting a mortgage on a property. It determines how much equity you will have in the property after you purchase it. The more equity you have the less risk the lender and insurer will see in your file.
Down payments can come from many different resources:
- Personal savings – This is the money that you have squirreled away for years in a savings account. If it is not in a bank account and you intend to use it put it in a savings account today.
- RRSP – As you may know the Government of Canada has a First Time Home Buyers Program that allows people to take money out of their RRSPs tax free as long as they promise to repay it in a certain time. Check out the following link to the Government of Canada’s website that explains the program. Link
- Gift from an immediate family member – Just like it sounds your parents or your sibling gives you all or a piece of the down payment.
- Borrow the funds for the down payment - This method requires that you use a good mortgage broker to show you if this option will work for you. Depending on the lender there can be a maximum that you can borrow and there maybe other terms in the mortgage that you will need to be made aware of.
There are a couple more options available to you please call to find out more.
Down payments are very important and the lender has some specific needs in proving where the down payment comes from. If you have any questions please contact me and I will answer them.
May 23, 2009
Book, Case Study, Credit, Employed Persons, First Time Home Buyer, Interest Rates, Mortgage Insurance, News, Pre Approval, Proving income, Small Business, Switch
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Over the past few months I have confirmed something that I have suspected for the last several years – People need to know more about mortgages and the mortgage process.
So in an effort to address a number of the key issues I have began writing this blog.
Through this blog I have attempted to inform people about some of the basics of the mortgage terminology, products and process. The response has been outstanding to say the least. People really appreciate the straight forward information that I have been giving them.
I think that this is worth while and fun so I will continue to blog, but I want to do more. So I am officially announcing that I am in the process of writing a book for people who live in Alberta and who are looking to purchase or refinance a property. The working title of this book is “So you want to get a mortgage in Alberta”.
I am excited about giving Albertan’s clear information about mortgages.
The chapters and topics have largely been decided but feel free to leave a comment below to let me know what you would like to see included in this book.
If you keep reading then I will keep writing.
January 15, 2009
Case Study, Credit, News
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As of today most of us have been back in the office for a bit more than a week. Our holiday binging is over and for the most part we are beginning to feel back to normal.
The New Year so far has been filled with doom and gloom from our media in Canada. Sometimes it seems like they get paid some type of bonus for every bad news story they can publish. So with all of this bad news coupled together with a credit card bill that we all are expecting in the next couple of weeks it is no wonder that we feel a little glum.
So this week I have two things I want to discuss.
Firstly I am going to suggest that we all make a concerted effort to pay down our consumer debt in the first quarter of 2009. I am not a credit councilor but I know that paying down your high interest rate consumer debt is good place to start.
Secondly I am telling everyone I know that participating in the recession is a choice. If people want to join The Sky Is Falling Club let them but you can make a choice not to join. So in my case instead of feeling sorry for myself I have tripled my marketing this year and have worked hard to know where my money is going and to reduce my expenses.
I have made a commitment to end 2009 in a far better position than I entered it regardless what the media has to say about our economy.
I hope you join with me.
Happy New Year!!!
October 21, 2008
Credit, Interest Rates, News
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According to the Globe and Mail the Central Bank of Canada has decided to drop their prime lending rate once again. This time by ¼ of a percentage point.
The last time they dropped the rate by ½ percent it took the big five chartered banks a little while to drop their key lending rate. Some banks even decided to hold back some of the rate cut.
So I will be keeping an eye out to find out how your lenders will react.
Please call if you have any questions.
http://www.reportonbusiness.com/servlet/story/RTGAM.20081021.wrates1021/BNStory/Business/home
October 8, 2008
Credit, Interest Rates
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“Should I fix my variable rate mortgage right now?” is a question that me and my collegues have been hearing quite a bit recently.
It is a good question. The finacial markets are in up heaval. Every time you turn on the radio or TV there is talk of recession. And people want to take some action to protect themselves.
This morning the Bank of Canada along with five other central banks reduced thier prime lending rates. Time will tell if this translates into banks reducing thier prime lending rates but it looks favourable.
If they do and you have a variable rate that is 0.6% below prime then your rate will go from 4.15% to 3.65%. Now lets compare that to a typical fixed rate right now of 5.8%. For every $100,000 you have borrowed right now by staying with the variable you will save $121 every month.
Economists are also suggesting that rates will continue to drop for the foreseeable future.
“The risk is that 50 basis points wasn’t enough, and that none of that will pass through to consumers and businesses as interbank funding pressures continue to worsen even after the rate cut,” said Derek Holt, vice-president of economics at Scotia Capital Inc. “This is not the last of the cuts, and both the Fed and the Bank of Canada could easily cut another 100 basis points.”
There may come a time where it will be prudent to fix your rate and you are welcome to do this at anytime but I would rather have that $121 in my pocket every month.
Call if you have any questions.
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