October 20, 2009
Interest Rates
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No where fast.
Looks like many of the financial whizzes in Canada believe that the variable rate is going to hold steady for a while. They believe that if the Canadian Dollar achieves parity against the US Greenback that this may slow the Canadian Economy’s growth.
Good news for those of you who have Variable Rate Mortgages.
http://www.theglobeandmail.com/report-on-business/why-interest-rates-will-remain-low/article1330601/
October 7, 2009
Book, Employed Persons, First Time Home Buyer, Interest Rates
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The Offer to Purchase is a very important document for when people are buying and selling houses.
CMHC defines the Offer to Purchase as “a written contract setting out the terms under which the buyer agrees to buy the home. If the Offer to Purchase is accepted by the seller, it forms a legally binding contract that binds those who have signed it to certain terms and conditions.”
It is the official document that shows to all parties involved the complete terms of the sale. For example is shows the following:
- Property address;
- Purchaser;
- Seller;
- Purchase price;
- Deposit amount;
- Possession date;
- Financing condition date;
- and many more important pieces of information.
The lender needs this document because it shows them that the person really is purchasing a home, for how much and when the file is closing.
Most lenders will need to see this paperwork before they will even start processing your file.
This is why it is key to arrange to have this document sent to your mortgage broker as soon as is possible. This allows the mortgage broker to add the data to your application and submit it to the lender without delay. In turn you get your approval sooner.
For further information about these important documents see (http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_007.cfm)
September 8, 2009
Book, Employed Persons, First Time Home Buyer, Interest Rates, Pre Approval
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Condominium fees (often referred to as condo fees) are the monthly fees that people who own a property within a condominium complex. These funds are used to cover the common use areas of the facility. Condo fees can range quite a bit in what they cover and how much the fees can be. Speak with a qualified Realtor to find out all about these fees and how they may affect you.
When people purchase or refinance a condominium property one factor we have to work into our qualification ratios, GDS and TDS, is the condo fees. Each of these ratios include a provision for condo fees.
So when we pre qualify people who are considering purchasing a condo it is best to get a sample of the range of what the monthly condo fees are for the properties you are considering. Because these number potentially have a large effect on what you qualify for it is important to be very conservative in these estimates used in the pre approvals.
What I often tell my customers is that if the condo fees are 10% more than what I put into the pre approval application then give me a quick call or email and I will run the numbers for them so we can be 100% sure that they will qualify with the new condo fees.
My services are complimentary so use me to help you get peace of mind.
August 5, 2009
Employed Persons, First Time Home Buyer, Interest Rates, Pre Approval, Proving income
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A question I often get asked is, “How much will the lender allow me to borrow?”. For many this is the most basic and important question. While the answer is simple to figure out it is impossible to determine with any accuracy without taking a full application.
Lenders look at two key ratios to determine what you may borrow – Gross Debt Servicing Ratio (GDSR) and Total Debt Servicing Ratio (TDSR).
Each of these ratios look at key costs that all Canadian home owners carry and relate that to your income. Thereby letting us know what is the greatest mortgage payment that you can afford. From there we work the mortgage payment back to determine what the total loan amount will be.
Gross Debt Servicing Ratio (GDSR) takes into account the cost for just owning the property:
- Principle and Interest (PI) – this is your mortgage payment
- Taxes (T) – city taxes
- Heat (H) – we do live in Canada 
- Condo Fees (CF) – We use 1/2 of the condo fees and only if applicable to your situation
(PI + T + H + 1/2 CF)/Income=GDSR
Total Debt Servicing Ratio (TDSR) looks at the same things as Gross Debt Servicing Ratio but add a component for your monthly Consumer Debt Obligations (CD).
(PI + T + H + 1/2 CF + CD)/Income=TDSR
The upper limits of these ratios vary from lender to lender depending on their internal policies and from borrower to borrower depending on other factors in the application.
I would be glad to run these numbers specifically for you to help you in your real estate purchase or refinance.
July 28, 2009
Employed Persons, First Time Home Buyer, Interest Rates, Pre Approval, Proving income
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So you have moved into your first home.
It is everything you hoped it would be and you couldn’t be happier.
Lets take a moment to look back at the journey you traveled because you have come a long way.
First you made the smart move by starting working with a mortgage professional. Someone who knew what they were doing and genuinely wanted to help you through the process.
Second you figured out all about the mortgage process and how your situation fits into this. Most importantly you got a clear path forward of what needed to be done to get you into your new home.
Third you released all the stress from the process by getting all your ducks in a row before you put down an offer by gathering all necessary paperwork.
Fourth you put an offer on a place and felt relaxed and confident that it would easily get approved. Ant it did! We sent all the paperwork to the lender where it was quickly accepted.
Next you went to your lawyer’s office. They explained all the documents to you in an easily understood fashion. Then you signed the documents.
So now we are back to where you are right now – a home owner. Enjoy it because being a home owner is a very rewarding experience.
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