Monday, 30 April 2012

Rate Watch


Downpayment Options

Buying a home with zero down could be a limited time opportunity 


Zero-down payment can help get Canadians into their homes faster, saving potentially thousands in rent, and giving them a jump start on building wealth.

A cash-back mortgage that provides the cash upfront is one zero down option, another is to secure the downpayment through a loan or unsecured line of credit.  

Zero down could be a limited time opportunity. Cash back options will no longer be available if the proposed OFSI (Office of the Superintendent of Financial Institutions) rules are implemented. Right now these new rules are just a proposal and out for comment, although it's quite possible they will be implemented.  As a result, qualified homebuyers should take a look at these opportunities now while they are still available.

A zero-down mortgage is certainly not for everyone but if you have stable income, good credit and the ability to comfortably handle your monthly mortgage payment and ongoing housing expenses, a well-designed zero-down plan can get you in your home sooner.  We can review your situation and help you determine if zero down is the right financial decision for you.  

Talk to us today if you want to explore how you can purchase now without waiting.



Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
kevin@kitzman.ca
faye@kitzman.ca

www.kitzmanteam.com

Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
www.mortgagesbyfaye.com
M08003930

Tuesday, 24 April 2012

Rate Watch


Financial Breakthrough

Zero-down may not be for everyone, but can be a financial breakthrough for the right candidate 

The timing might be spot-on for some prospective Canadian homebuyers to consider a zero-down mortgage. With mortgage rates at historic lows, purchasing your home and saving on rent might be the right financial decision for you. 

A zero-down mortgage is not for everyone, but if you have stable income, good credit and the ability to comfortably handle your monthly mortgage payment and ongoing housing expenses, a well-designed zero-down plan can be a tremendous financial boost. Zero-down can be a way of getting Canadians into their homes faster, saving potentially thousands in rent, and giving homebuyers a jump start on their wealth building.

A "cash-back" mortgage that provides the cash upfront is one zero down option to consider.  Another is to secure the downpayment through a loan or unsecured line of credit.  We can review your situation and outline all of the details that you should be aware of for each option so you can make an informed decision.

If you want to explore how you can purchase now without waiting, this is a great time to get advice. Let's talk!

Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
kevin@kitzman.ca
faye@kitzman.ca

www.kitzmanteam.com

Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
www.mortgagesbyfaye.com
M08003930

Tuesday, 17 April 2012

Mortgage Rate Change



Bank of Canada

Once again no change for variable rate mortgage holders as key policy rate holds steady

The Bank of Canada announced today that it is keeping the overnight rate unchanged, although with a stronger economic outlook hinting that it may become necessary to increase rates, but noting that this decision will be "weighted carefully against domestic and global economic developments."  

The Bank's statement was more optimistic than in recent announcements, saying "the profile for global economic growth has improved" and that "economic momentum in Canada is slightly firmer than the Bank had expected in January".  With respect to the possibility of a rate increase, they note that "in light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate."

The prime rate for most lenders should stay at 3%.  The Bank's next rate decision is scheduled for June 5.

Spring market 2012 is benefiting from historically low 5 and 10-year fixed rates, which are not based on the overnight rate.  Mortgage rates have been hovering around historic lows now for longer than almost anyone thought they would or could, creating a golden moment of opportunity for both first-time buyers and existing homeowners.  

Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
kevin@kitzman.ca
faye@kitzman.ca

www.kitzmanteam.com

Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
www.mortgagesbyfaye.com
M08003930

Friday, 13 April 2012

Mortgage Reno's


Buy and renovate for the perfect abode with a mortgage for fixer uppers

Many homebuyers looking at older properties find themselves in a common predicament: they’ve found a property that suits them, but it needs some costly and immediate upgrades.
Many buyers add the costs of those immediate renovations into their mortgage, instead of racking up credit card bills or selling investments to pay for the upgrades. Known as a “purchase plus improvements” mortgage, this type of mortgage covers the sale price of the home, plus any renovations that would increase the value of the property, with as little as 5 per cent down.
If you’re buying a home but want to add a second storey, finish a basement or redo a kitchen, it can make a lot of sense to add those costs to your mortgage. That way you can spread your payments over the life of the mortgage and have a cost-effective way to get your dream home. You can also use your pre-payment privileges to pay the renovation off faster. The process is quite simple:

Obtain cost estimates for the upgrades

Once you have found a home, you need to get detailed written quotes from licensed contractors on the renovations you plan, outlining the scope and all costs.

Get your appraisal

An appraisal with two separate values will be required: first the value of the property "as is" and the estimated value of the property once the improvements are completed.

Renovation costs are included in your mortgage 

Your lender will add the estimated costs of the renovation into your mortgage. For example, with a 5% down payment, your mortgage broker would apply for 95% of the “as improved” market value, which will be higher than the actual purchase price. The committed amount of the mortgage will be advanced to your solicitor, who will be instructed to hold back the renovation funds until the work has been completed and inspected.

Complete your upgrades; funds are released upon completion

Once an inspection from an appraiser confirms all work is complete and a copy of the building permit (if applicable) has been received, the balance of the mortgage funds will be released to you to pay for the renovations. There are a few options for carrying your expenditures until the funds can be released. Some major home improvement retailers offer “no payment” options for up to six months. Larger contractors may also be willing to finance the project short-term if they see the documentation for purchase plus improvements financing.
Example:
Purchase price: $400, 000

Improvements: $40,000

Total mortgage: $418,000 (95% of $440,000)

$378,000 will be released on closing date. $40,000 will be released upon completion of improvements i.e. improvements are 100% complete and a final inspection has taken place.
Be sure to consult with a mortgage professional to learn about the full range of options available to you when purchasing a fixer upper.


Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
kevin@kitzman.ca
faye@kitzman.ca

www.kitzmanteam.com

Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
www.mortgagesbyfaye.com
M08003930

Monday, 9 April 2012

First Time Homebuyers

Today's savvy first-time homebuyers are getting professional advice

Buying a home is a big financial commitment, and many Canadian renters are sitting on the fence deciding whether to buy or not. You're renting now, but maybe you could be in a home of your own. Is it possible? Are you wondering...
how much home you can actually afford;
whether you should keep saving or buy now with a cash back, borrowed or gifted downpayment;
whether or not you should use your RRSP funds;
if you should get a pre-approval;
how do you prove your income if you're self-employed;
how to build your credit rating to qualify for a great rate when the time comes;
what mortgage term you should take; short term, 5-year or longer;
are there extra costs that you need to consider; and,
where do you start the mortgage process?
These are the type of questions we answer every day for today's savvy first-time homebuyers, who are increasingly* turning to mortgage brokers to seek out their options, get professional advice, and not be tied to one particular financial institution's products.  Ensure you get off on the right foot in your home ownership journey! Talk to us today.

* In 2011, 48 per cent of first-time buyers completed their transaction with a mortgage broker, up from 45 per cent in 2009 and 35 per cent in 2007.  2011 CMHC Consumer Study.

Wednesday, 4 April 2012

Federal Budget

 
Last week's federal budget contained no specific rule changes for the mortgage industry but it did signal the government's desire to tighten the oversight of CMHC. 
 
The Crown Corporation currently resides within HRDC (Human Resources and Skills Development Canada) but may end up under the direct supervision of OSFI (Office of the Superintendent of Financial Insitutions). This would allow the Finance Department to more closely control the mandate and activities of CMHC which currently accounts for about 75% of the mortgage default insurance market in Canada. Due to greater than expected demand for low ratio portfolio insurance (for which premiums are paid by lenders rather than borrowers), CMHC is close to its mandated maximum of $600 billion in insurance in force. There will surely be more news on this soon. 
 
Finance Minister Jim Flaherty projects that the budget deficit will be eliminated by 2015, aided by $5.2 billion in cuts this year. Total spending for the fiscal year which began yesterday will be $276 billion with revenues of $255 billion, resulting in a deficit of $21 billion.
 
The Week Ahead
 
This week is a four day work week as Friday is Good Friday - a significant day on the Christian calendar - and a Statutory Holiday across the country. See our Just for Fun section below for some fun facts the month of April.
 
Major League Baseball swings into full regular season action this week with the Toronto Blue Jays kicking off their schedule in Cleveland on Thursday. As always, hope springs eternal. 
 
Focus on Collateral Charges
 
Some lenders have been registering "collateral charges" rather than traditional "mortgage charges". As our Feature Article explains, there are benefits to consumers but there are also hidden pitfalls.  
 
 
Have a great week!






Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
kevin@kitzman.ca
faye@kitzman.ca

www.kitzmanteam.com

Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
www.mortgagesbyfaye.com
M08003930

Monday, 2 April 2012

Rate Watch Report


First-time homebuyers

First-time homebuyers can tap their RRSPs to help with a home purchase

Thinking about buying your first home? Wish you had saved up a good down payment? Maybe you have, but didn't know it. Designed to help first-time buyers get into home ownership, the federal Home Buyers' Program lets you access tax-free monies for use towards the purchase or even construction of your first home. 

As a first-time homebuyer, you are allowed to withdraw money tax-free from your RRSP, provided you adhere to the repayment plan. You can withdraw up to $25,000 from your plan. If your spouse qualifies as a first-time homebuyer, then he or she will also be able to withdraw $25,000. Between the two of you, you could possibly have a hefty down payment sum of $50,000. That's enough to make a substantial difference in the affordability of home ownership!

There are certain conditions, for example, you must enter into a written agreement to buy or build before you can withdraw money. And, you must meet the repayment terms. Repayment to your RRSP begins the second year following the year of withdrawal. You have up to fifteen years to repay, and each annual repayment must be at least one-fifteenth of the total withdrawal, otherwise you have to include each repayment amount as income for that year.

A detailed booklet is available on the Canada Revenue Agency website. Look for T1036, which is the form required for requesting a withdrawal.

Let's have a conversation about your future plans for home ownership. A good plan is always a great beginning!




Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603


Faye Kitzman
Mortgage Agent
Mortgage Intelligence
519-588-0141
M08003930