Mortgagenomics Canada

If you're self employed and qualifying for a mortgage right now (April), you are either gleaming with optimism or white knuckling your way to the finish line. And here's why... When qualifying as a self employed applicant, your qualifying income is determined from your most recent 2 year average (of your Notice of Assessments). Notice of Assessments are the end confirmation of your tax p...

Today I want to talk about how one could incorporate gifted equity when purchasing a home ( with the proceeds of a mortgage ) from a direct family member . So, in other words a transaction between two direct family members ( mainly child and parent ) can occur by the selling family member simultaneously gifting a portion of their equity to the buying family member while formally selling/trans...

  When it comes to mortgages for newcomers to Canada, the qualification criteria remains similar to what Canadians can expect but with the following exceptions: Minimum down payment thresholds vary anywhere from 5% to 35% depending on ones residence status: Permanent Resident with standard income confirmation: 5-10% minimum down payment Permanent Resident with no income , but high net worth:...

In Vancouver, purchasing a property these days has become somewhat comparable to a Black Friday event.  A property gets listed, an offer date is set, several buyers line up to view the property (actually some don’t even bother to view as they go straight to the offer stage), and finally offers are placed.   This is where things get dicey In normal times, upon submitting an offer a b...

The most common types of income when qualifying for a mortgage are variations of salaried, hourly, and self employed income. But what about other sources of income? There are plenty more to be aware of! Here is a list of some other less talked about forms of qualifying income : Part-Time Income: as long as the income is guaranteed, you could use 100% of the income as stated in the employ...

Today I wanna talk about mortgage penalties and how and when they come into play within a mortgage.  The when part of the question is quite simple, so let's begin there.  Every mortgage has a maturity date (with the exception of home equity lines of credit), and if you sell your property or refinance your mortgage ahead of the maturity date, you are subject to a penalty from your mortgag...

I think it's safe to say that every single detached home in Vancouver is priced over $1M. In fact as of Feb 2021, the average priced single family home in Greater Vancouver shot up to $1.83M (the third highest monthly figure, ever!). And here is the major disconnect of the entire real estate equation (for Metro Vancouver)...the median total income of households sits at only $72,662 - you don’...

The term “First Time Home Buyer” is thrown around often these days and is tagged in countless incentive based programs and policies. In the future I will dedicate an entire newsletter to the various First Time Home Buyer privileges and programs, but today I will talk about one in particular, the RRSP Homebuyer Plan. What is the RRSP Home Buyer Plan? The RRSP Home Buyer Plan (HBP) is a program...

Key Characteristics of fixed rate mortgages… Current Rate Range (as of Feb 5, 2021): 1.49% to 1.79% Distinguishing Characteristics: mortgage break penalties are the greater of 3 months interest or interest rate differential (IRD).  And with that being said, your mortgage penalty figure can deviate back and forth throughout the life of your term depending on the prevailing market conditions. F...

Imagine running a marathon and you are 50 strides away from completing the race.  But suddenly, a race official appears out of nowhere and moves the finish line another 500 meters ahead.  This is what closing costs verification feels like...the applicant has just recently (painstakingly) satisfied the down payment verification and is now presented with another task of proving that they h...

The dream to build your own home is alive and well, especially in Vancouver!  Take a drive down any street in one of (metro) Vancouver's neighbourhoods and you'll see several projects on the go.  This week I want to write about the mortgages that finance these incredible projects and what it takes to qualify for them.  The mortgages are commonly referred to as Construction Draw Mort...

Over the last decade the process of qualifying for a mortgage has increasingly become more cumbersome and frustrating. In fact, some claim it is easier to attain citizenship to another country than it is to secure basic financing for a 1 bedroom condo in Calgary. So why is this? Why all the questions, the excessive document requests and the never ending due diligence? The answe...

What is a real estate assignment contract? Before I get in to the process of how to qualify for a mortgage when assigning a real estate contract, let's first unravel what a real estate assignment is. A real estate assignment is a transaction similar to that of a standard real estate transaction, except rather than being referred to as a buyer and a seller, in an assignment they are referred to as...

Since the launch of the program in Sept 2019, only 13% of the programs allocated reserve actually made it to the hands of first time home buyers. Will the upcoming enhancement spur more interested applicants, or is this program simply a dud? Three words that best describe Trudeau's First Time Home Buyer Incentive (FTHBI) program that was launched back in Sept 2019 - OVERRATED , UNDERUSED , and CON...

One of the consequences of selling a home is the unexpected penalty that arises as a result of breaking your mortgage contract ahead of its maturity date. The penalty is determined by the greater of 3 months interest, or the dreaded interest rate differential (IRD). And the scary part is the your penalty can radically change from the day you list your property for sale to the day you sel...

Mortgages are classified as one of the following three;  Insured ,  Insurable , or  Uninsured/Conventional . The way a mortgage is priced and qualified depends on how its funds were purchased, acquired or allocated. Mortgages are either insured by the borrower , bulk insured (securitized) by the lender, or simply uninsured all together. Once they are given their insurability classif...

When I first became a mortgage broker (in 2004), the hardest thing for me to understand at the time was how business owners  got away with  qualifying for  hefty mortgages  with such  low declared incomes . Like how does a contracted engineer who declared $65,000 on their T1 General end up qualifying for a $650,000 mortgage (which requires an annual qualifying income...

The following is discussed in this episode: Throughout our lives we will likely be  moving from one property to another , and in the process, we use the equity accumulated from the previous property to either buy the new property outright, or use whatever is remaining (once the existing mortgage is paid out) as a down payment for the new property. But sometimes your  new property’s closi...

Everyone assumes that verification of down payment proceeds for a mortgage is a swift and miscellaneous part of the mortgage qualification process. When you think about it, why would it be difficult? If the applicant does, in fact, have the funds in their bank account, why then does it matter where it came from and how long it's been there? One would argue that the biggest qualification...

The following is discussed in this episode: Purchasing a property inside of a corporation:   OPERATING COMPANY or HOLDING COMPANY? *this a decision you will want to discuss with your accountant as there are reasons to do so in both cases. However, as far as mortgages are concerned most lenders require that the property be held in a holding company. There are a select few t...

The following is discussed: >for the 6th consecutive week 5 year fixed rates are available for as low as 1.79% . Even lower rates are available for no-frills products (I've seen rates as low as 1.64% ). One other rate promo to be aware of -> 1.89% for a 5 year fixed, but no interest for the first three months (and it’s not tacked on to the mortgage either! This is the real dea...

Key points: New approach/format to podcast...expect weekly episodes based on Marko's weekly newsletter Two upcoming events that could potentially cause interest rates to increase (Bank of Canada's announcement to stop purchasing bonds AND the US Election) a reminder of the 3 golden credit boosters Marko Gelo Garage Band Sessions:  (produced and performed my Marko) "Cheap Money" ...intro song...

Key points: Consumer Credit Reports (Borrowell, Credit Karma, etc)...why can't brokers accept your free reports? When it comes to mortgages, credit reports are reviewed from a very broad perspective - way more to it then just the actual score Avoid deferring your broker/banker from checking your credit score...do it sooner rather than later learn about the 3 golden tips that are sure to increase y...

An overview of key points when qualifying for a mortgage in Canada, and what to expect: Key points: The Application Process: Old School and New School processes The Qualification Process: An overview of some key qualification guidelines Getting the best rates: there's more to it than you think ALSO INCLUDED: a Marko-Gelo-Garage-Band creation! Marko Gelo Garage Band Sessions:  (produced and pe...

Why is it that banks differ in how much mortgage they approve you for? Even though all banks use the same qualification formulas, there are some banks that have additional boosters that can propel you to higher qualification amounts. Key points: Mortgage Approval Pro Tip #1: Down Payment and Amortization affect your maximum mortgage amount Mortgage Approval Pro Tip #2: After income, debt is the ne...