Category Archives: Mortgage

Life Insurance versus Mortgage Insurance

Life Insurance versus Mortgage Insurance, is what some of my clients ask me when they are purchasing a house. A financial advisor I know in Ottawa shared with me a practical chart to explain the difference between life insurance and mortgage insurance:

PERSONAL LIFE INSURANCE MORTGAGE INSURANCE
  • Insures you
  • You decide who to name as your beneficiary
  • Renewable, convertible term insurance
  • Underwriting is done at the time of application
  • You determine the amount of the coverage; your coverage remains same
  • You own the policy
  • It is yours, you keep it
  • Your beneficiary decides how to use the money
    • Insures your mortgage
    • Lender is the beneficiary
    • Non-renewable, non-convertible term insurance
    • Underwriting is done at the time of the death
    • Covers the exact amount of mortgage balance; as you pay down your mortgage your coverage decreases but your premiums remain same; cost per $1000 of coverage increases
    • Lender owns the policy
    • When you change your lender you cannot transfer your insurance
    • Lender automatically pays remaining mortgage balance
    • Shared by Nilay Erisoglu, Financial Security Advisor, Freedom 55 Financial Nilay.erisoglu@f55f.com

Let me go through some more details of Life Insurance versus Mortgage Insurance

Life Insurance

Mainly life insurance is used for insuring yourself, you decide who you name as the beneficiary (your spouse, family member, etc) and they decide on how to use the money, the amount of money paid out to the beneficiary never changes.

Life insurance is also renewable, and convertible term insurance. In Life insurance you have protection for the duration of the policy. The duration usually is around 10 to 30 years or sometimes to an age like 70 or 80. It all depends on the term you purchase and the underwriting is done at the time of the application.

In life Insurance you determine the amount of the coverage; your coverage remains same during the policy. When you plan to sell or change lender for you mortgage, your life insurance remains the same and does not get affected, it stays with you.

Life insurance is usually less expensive than mortgage insurance. Although a note of caution that if you intend to get for another term, you could potentially be paying a higher premium depending on the age and your health. Typical the enrollment process for term life insurance is more complex than applying for mortgage insurance, since life insurance policies require a medical exam in order to secure coverage.

Mortgage Insurance

Mortgage Insurance insures your mortgage, and the lender is the beneficiary (not someone whom you have named). It is non-renewable, and it is non-convertible term insurance. Typically the underwriting is done at the time of the death. Mortgage insurance covers the exact amount of mortgage balance; as you pay down your mortgage, your coverage decreases but your premiums remain same…

In Mortgage Insurance the lender owns the policy and if you change your lender you cannot transfer your insurance to the new property. The lender automatically pays remaining mortgage balance in the case of death.

Some advantages of mortgage insurance are that they are very convenient, they often do not require any medical exam. You typically will purchase the insurance through your bank or the financial institute that lend the money for your mortgage. Mortgage insurance is usually added to the lender’s monthly mortgage payments.

The downside of mortgage insurance is they are usually more expensive than life insurance although more easy to attain from a bank. CBC Marketplace also did a series of mortgage insurance.

I hope this blog post helps explain the difference between Life insurance versus Mortgage insurance and last but not least I hope your winter is going well with a lot of fresh air experiences and you are getting ready for a wonderful spring coming up with high energy.,..Whether your plans to relocate, to downsize, to aim for a change or investment, give me a shout and lets get the ball rolling for your next chapter…

Cheers!

Written by Nilay Ertemur

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Building Green Homes in Canada

Did you know around 20 percent of the energy consumed in Canada is used in our homes? Purchasing an energy-efficient house or turning one by energy-saving renovations into a green home can offer big savings for home owners.

CMHC has a slogan “Help the Planet, Help Your Wallet” which has added environmentally friendly features to the Mortgage Loan Insurance it offers. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, there is a 10% refund on the Mortgage Loan Insurance premium, and a premium refund for a longer amortization period (if applicable) may be available to you.

This also applies to if you’re thinking of building an energy-efficient home.

How it works

Step 1: Documentation

Find out how energy-efficient your house or unit is and obtain the supporting documentation

For houses and units located in low rise residential buildings the house or unit must:

    • have been built under a CMHC-eligible energy-efficient building program; or
    • have been assessed by a Natural Resources Canada (NRCan) qualified energy adviser
    • and have an EnerGuide rating that complies with the applicable requirement stated below:
For purchases with a closing date: Energy Guide Rating Required
On or after January 1st, 2013 82
From April 1st, 2010 to December 31st, 2012 80
From July 27st, 2005 to March 31st, 2010 77

You must obtain and provide CMHC with one of the following supporting documents:

The CMHC-eligible energy-efficient building program certification; or the first page of the EnerGuide performance report showing the EnerGuide rating of the house.

To be eligible, the supporting documentation must be dated no more than five years prior to the date of the application for a partial premium refund. Where the applicable supporting documentation is older than 5 years, the borrower is required to obtain a current energy efficiency evaluation.

This credit also applies to high rise residential buildings. If you are planning on building a new home and your builder is not a member of a CMHC-eligible energy-efficient building program, you should have an energy adviser evaluate the building plans before the house is built. This can help you ensure that you will meet CMHC’s requirements once the construction of the home is complete and it is evaluated.

Step 2: If required, boost your energy efficiency

If the house you plan to buy does not meet the applicable energy-efficiency requirement, to be eligible for a refund, you will need to obtain an EnerGuide rating through an NRCan qualified energy adviser and renovate using part of the CMHC insured funds based on your energy adviser’s list of recommendations in order to increase your score by at least 5 points and to a minimum overall rating of 40.

Step 3: Discuss and arrange a CMHC-insured mortgage

Talk to your lender and ask for a CMHC insured mortgage. (The rules have just changed to prevent fraud and misuse of funds).

Step 4: Confirm the improvement

After you make the renovations recommended by your energy advisor, you will need to have a second assessment done to determine the energy-saving effectiveness of the renovations.

Step 5: Apply for Refund

Apply for your Premium Refund

The following are steps for if you own a home and are thinking of renovating to make your home more energy-efficient:

Step 1: Obtain an energy rating for your home.

To qualify for this refund, you must carry out the steps described below within a reasonable time after funding of the CMHC insured loan. Normally, the time period between the date of funding (purchase with improvements or refinance) and the date of the post-retrofit assessment should not exceed 24 months.

Contact an NRCan qualified energy adviser to obtain the current energy rating for your home. You will receive a list of straightforward recommendations to increase your energy rating.

Step 2: Discuss CMHC insured refinancing.

Talk to your lender or your financial institution about which options are available to you. (The rules have just changed to prevent fraud and misuse of funds)

Step 3: Improve your rating

Improve your rating by using your energy adviser’s recommendations, renovate or upgrade to increase your energy rating.

Step 4: Confirm

Confirm the improvement by your energy adviser coming in and they will assess your home again after the energy-saving renovations are finished. If this test shows that the house’s energy rating has improved by at least 5 points and has achieved an overall rating of at least 40, a premium refund may be available.

Step 5: Apply

Apply for your Premium Refund online or through paper.

NRCan has developed an energy assessment and labeling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, an NRCan qualified energy adviser will evaluate the house to determine its energy efficiency rating on a scale of 0 – 100.

For more detailed information and specifics of these sorts of programs, please visit the NRCan web Site.
and if you are looking for a green home please feel free to get in touch with me.

Cheers!

Nilay Ertemur

References: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_008.cfm

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Happy new year everyone!

It is the second week of the new year and we are well immersed back into school, work and it’s time to evaluate Ottawa 2016 Real Estate Market!

In order for us to make any kind of prediction for the future, we need to look at what has happened at least in 2015 and its relation to the previous year (2014).  Members of the Ottawa Real Estate Board sold 703 residential properties in December through the Board’s Multiple Listing Service® System, compared with 638 in December 2014, an increase of 10.2 per cent. The five-year average for December sales is 653. The total number of residential and condo units sold through the Board’s MLS® System throughout all of 2015 was 14,658, compared with 13,919 in 2014, an increase of 5.3 per cent. Separately, residential and condo unit sales each outperformed the 2014 numbers. (OREB)

As for the general Canada picture in real estate of 2016, national sales are forecast to reach 498,600, down 1.1 per cent from 2015 as activity in B.C. and Ontario moderates and housing market conditions soften in Alberta. Moreover, interest rates are now expected to begin rising later than previously predicted. They are expected to remain on hold until late 2016, therefore low interest rates will continue to support sales and prices in near future (CREA).

From a mortgage side of the picture, home buyers will have to put a 10% down payment on the portion of the price of a home over $500,000. Anything under $500,000 will still only require a 5%  down payment. The changes are to take effect Feb. 15, 2016 (CBC).

For the rental market in Ottawa, in 2016, the vacancy rate will move down once more to 2.4 per cent. As for the resale market over the 2015-2016 period, sales of existing homes are expected to remain fairly flat with a downward trend. Employment should rise slightly into 2016 as overall economic activity stabilizes and the LRT project expands further.  (CMHC)

In brief, this year is still good here in the capital to make plans with your real estate aspirations, just contact me through your most preferred way communication, and I will be happy to serve you or any of your referrals.

Cheers!

Author: Nilay Ertemur

REFERENCES:

http://www.crea.ca/stats/quarterly-forecasts

http://www.cbc.ca/news/politics/morneau-home-ownership-finance-1.3360

http://www.cmhc-schl.gc.ca/odpub/esub/64311/64311_2015_B01.pdf

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Getting financing approved for home buyers has become more and more challenging under all the new government imposed rules. For self employed home buyers, it becomes even more interesting.

That said, there are ways to get mortgage approved for these hard working individuals. The key to approvals for self employed buyer lies in asking the right questions and getting the proper documentation to support the claims regarding their type of work and the income being generated by the business.

Most self employed businesses have different ways of reporting their income, reducing all their taxes as much as possible. For these individuals their notice of assessment income is low due to write offs against their income. In order to qualify for mortgages, they need to demonstrate that their gross business income is reasonable enough to support the income level stated for them in order to have the deal approved.

One way for self employed individuals who are in sole proprietors and unincorporated business is by incorporating their business, since most banks do prefer salary. Once incorporated, the self employed individuals can pay themselves a salary, the other advantage of incorporating is it could also reduce tax rates and allow the business owner to collect a higher salary or dividend payout.

Most mortgage brokers have more ways to secure a loan for self employed individuals, they use alternate lenders that allow for more flexibility in getting the approvals in place without charging too high of a rate.

I certainly know couple of great mortgage brokers who can assist in helping self employed individuals obtain a mortgage here in Ottawa, please feel free to contact me for a referral and for your further investment or living arrangements.

Cheers!

Nilay

ref : www.BestMortgageInOttawa.com

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Ontario is considering giving all its municipalities power to levy a land transfer tax, that includes Ottawa. So what does it mean for you as a home buyer in Ottawa? Basically, municipal land transfer tax is yet another tax but the revenue of this tax goes to City of Ottawa, and the consequence of this tax will raise closing costs for property buyers, who are already paying a provincial land transfer tax.

There will be rebates for first time home buyers but the tax rate varies. The current land transfer tax for a residence worth $400,000 is around 2% when sold. The potential municipal land transfer tax would be an another additional 2%.

Since 2008 in Ontario, Toronto is the only municipality that allows to charge a municipal land transfer tax, and the revenue is used for local city budget. There is a sample calculation provided by Toronto.ca that highlights the amount of Municipal Land Transfer Tax (MLTT). For example, a house purchase price of $500,000 (excluding HST) the resulting amount for Municipal Land Transfer Tax would amount to $5,725.00.

As for City of Ottawa, Mayor Jim Watson have stated that he is not interested in the revenue source even if the province expands taxing powers to municipalities. “It’s certainly not high on my priority list” said Mayor Jim Watson. Watson also mentioned “the city hasn’t called for the province to make a change in land transfer taxing“.
If you wish to stop this tax, please let your Ontario MPP know where you stand with MLTT. One can also sign the Ontario Real Estate Board at http://www.donttaxmydream.ca/helpstop.html and find their Ontario MPP.

And for further questions to purchase a property here in Ottawa, contact me and I will go through your questions one by one…

Cheers!

Nilay Ertemur

 

Sources:
http://www.ottawasun.com/2015/10/27/ottawa-mayor-jim-watson-isnt-interested-in-a-land-transfer-tax
http://www.thestar.com/opinion/editorials/2015/11/01/give-cities-power-to-set-a-land-transfer-tax-editorial.html
http://www.donttaxmydream.ca/

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Welcome to Canada

Canada is a country, consisting of ten provinces and three territories, in the Northern part of the continent of North America. It extends from the Atlantic to the Pacific and Northward into the Arctic Ocean, covering 9.98 million square kilometres (3.85 million square miles) in total, making it the world’s second-largest country by total area and the fourth-largest country by land area.

As a new comer to Canada, you may want to look into purchasing your first property, in this blog post, I will try to cover some of the things to consider when purchasing a property in Canada. I would like to call it “Home Buying Guide for New Comers to Canada”

Mortgage / Finances

Most major banks do offer mortgages to newcomers but do have certain requirements for the loans.
Royal Bank has a document online that details their requirements. Some of the requirements for having a down payment of less than 25% consist of:

  • You must have immigrated to Canada within the past 24 months
  • You must have landed immigrant status
  • You must have a minimum of three months’ full-time employment in Canada.
  • All debts held outside of Canada must be included in determining how much you can afford, or your total debt servicing ratio
  • You’ll require a letter of reference from a recognized financial institution.

Bank and loans rules and regulations change all the time thus I would strongly suggest to speak to a mortgage specialist in a bank or mortgage brokers who will be able to assist you in obtaining a mortgage.

Canada 2014 best places to live

Listed below are Moneysense top 10 places to live in Canada:

Rank City Population Average House Hold Income Average House House Price Average Property Tax
1 St. Albert, Alta. 64,377 $128,270.17 $373,426.00 $3,286.00
2 Calgary, Alta. 1,306,471 $119,771.69 $435,825.00 $2,782.00
3 Strathcona County, Alta. 98,232 $137,509.40 $408,331.00 $3,398.00
4 Ottawa, Ont. 953,589 $103,186.09 $398,845.00 $2,283.00
5 Burlington, Ont 187,497 $110,113.81 $496,412.00 $2,855.00
6 Boucherville, Que. 41,928 $122,131.67 $352,698.00 $3,333.00
7 Oakville, Ont. 196,722 $145,694.87 $692,902.00 $3,756.00
8 Edmonton, Alta 868,392 $91,807.29 $375,308.00 $1,966.00
9 Regina, Sask. 221,999 $91,328.02 $372,335.00 $1,965.00
10 Québec, Que. 535,353 $70,627.27 $249,015.00 $1,609.00

Types of homes in Canada: Not an exhaustive list but most commonly sought after…

Single / Detached SIngle Home
Freestanding home, you own the land and the house
Semi Detached semi
Home has separate entrance and each owner owns their own property and responsible for their own side. Homes usually share a common wall or sometimes garage walls
Townhouse townhouses
Home is attached side by side to a series/row of homes, each unit has its own entrance but shares a common wall
Condos condo
Multi-unit tenant building (apartment like), you do not own the land but own just the unit itself, monthly payments to condo corporation to handle repairs and maintenance are usually attractive to first time home buyers

Things to consider when buying a house

  1. Location – The key phrase in real estate is always “location, location, location”, one cannot deny the fact that location plays an important part of your decision of purchasing a house in city, suburbs or countryside.
  2. Cost – The amount you are approved to purchase the property, things to consider: taxes, lawyers and closing costs.
  3. Size – Number of bedrooms, washrooms, and garage specs for your needs
  4. Work – How would you commute to work, public transportation vs vehicle
  5. School– What are the school ratings around you, is the school walking distance?
  6. Feature – Things that are important to you, a big backyard, fireplace, swimming pool, layout, etc
  7. Family & Friends – Would you be close to family and friends
  8. Amenities – Are you walking distance to shopping, clubs or gyms

Finding the Right Real Estate Agent

  • Look online for an agent, from the agent’s website it will tell you how tech savvy they are and have confidence about them
  • Ask colleagues, family or friends for recommendations of an agent they have used in the past or that they trust
  • Request for a meeting and tell the realtor your wants and needs for your new home purchase. Using a realtor does not cost you, a buyer does not pay the realtor for their service typically.
  • Also note you can use a realtor for new built homes. There are a lot of details of purchasing a new house and a realtor will help you with this process as well
  • I also have a separate blog post on purchasing house/condo in ottawa

Things to consider

A good real estate agent will be able to give you a hand from criteria setting to the closing, but as always having the accurate information in hand is better, so here is a list of things to consider when making the purchase.

  • Double check the paperwork for names, addresses in the forms
  • Items included and can be negotiated in the purchase, windows coverings, fridge, stove, dishwasher, laundry washer, dryer, built in vacuum
  • The closing date, possession date and when the offer becomes null and void
  • The purchase price and the deposit
  • Lawyer or notary fees, land title and taxes, I have a blog post that covers these items
  • Home inspection and mortgage approval

Summary

I hope this home buying guide will help you, I will try to make it up-to-date and if you have any questions or comments, please feel free to contact me

Cheers!

Nilay Ertemur

References

http://www.rbc.com/canada/brochures/First_Home_English.pdf
http://www.moneysense.ca/canadas-best-places-to-live-2014-full-ranking
https://www.cmhc-schl.gc.ca/en/co/buho/hostst/
http://www.cmhc-schl.gc.ca/odpub/pdf/66687.pdf

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Forecasting 2015 Housing Market in Ottawa

As we all know predictions are not easy, especially for the future, but we can certainly go through some stats to find out how the market has been doing in the near past, to figure out how this year might turn out for Ottawa.

Mortgage and interest rate cut

Let’s look at the mortgage picture first, the average five-year mortgage rate in Canada is at a record-low 4.79%, according to central-bank data (Source: Financial Post ). Lower rates can be obtained from banks and other private lenders, such as Mortgage Brokers Ottawa, the mortgage rate on their site states 2.89 for a 5 year fixed (26 Jan 2015).
On 21 Jan 2015, Bank of Canada has lowered its interest rate to 0.75, it dropped the lending rate by a quarter of a percentage point. What that means is the cut will result in lower interest rates for variable rate mortgages, lines of credit and other loans that float with prime rates. They have called that fixed rates would be lowered also, and Royal Bank offered a five-year fixed rate of 2.84% on Jan. 24. (Source: Financial Post)

Prices of Houses and Comparisons

If we compare 2013 to 2014 market prices, we see some increases.

Month Average Home Sale Price Result
January 2014 $346,744 increase of 1.0% over January 2013
February 2014 $353,407 ncrease of 2.0% over February 2013
March 2014 $359,051 increase of 0.3% over March 2013
April 2014 $374,015 increase of 0.8% over April 2013
May 2014 $381,172 increase of 3.2% over May 2013

Ottawa is a healthy market that prices don’t go up and down like they do in some other Canadian cities, where there could be a very large influx of price ups and downs such as in Alberta… Prices of houses are still slowly going up here in Ottawa, with some minor adjustments in various neighbourhoods. 2014 was a year that average days on the market for a property increased significantly from the previous years and that was certainly not usual. Properties considered as luxurious in remote areas and the ones far from Ottawa core got hit first when it came to price reductions, however many city properties still held their value and on average saw a price increase by around 1 % in 2014.

And last but not least, this chart is key for us to understand what the economy has been doing in the near past and what the expected figures are for the coming years.

2012 2013 2014 2015 2016
Total Employment (000s) 697.6 687.4 696.5 706.0 715.5
% change 2.4 -1.5 1.3 1.4 1.3
Unemployment Rate 6.4 6.3 6.5 6.0 5.9
MLS® Res. Sales 17,184 16,539 16,472 16,750 17,400
% change 0.2 -3.8 -0.4 1.7 3.9
MLS® Res. Avg. Price 327,656 334,320 339,785 344,000 350,000
% change 2.4 2.0 1.6 1.2 1.7
Residential Permits (Units) 8,211 6,643 8,950 7,800 8,000
% change 2.7 -19.1 34.7 -12.8 2.6

Source (Ontario Chamber Commerce)

Conclusion

As we can see the prediction of 2015 would be business might proceed as usual, some adjustments are in effect but there are still increases in price for some areas in Ottawa. If you are planning for your new purchase or selling your existing house, or investment contact me and I will be able to provide you a FREE CMA (Comparative Market Analysis) report of your house value, or for the area you are looking for.

Here are some stats you can tweet:

ottawa2015

Ottawa 2015 prediction

Disclaimer: As this article has been published by the author, mortgage rates might have been changed again in the last couple of days, therefore it is recommended to talk to a mortgage broker about the latest rates and mortgage rules and regulations.

Sources:
Financial Post
CBC News

Author: Nilay Ertemur

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To Buy or Rent in Ottawa?

Here is a common question that people may think of when deciding on purchasing a condo/house in Ottawa, whether it would be better to rent or to purchase a place since it is a big financial decision in either case.

I will tell ahead that the winner is TO BUY rather than TO RENT in Ottawa, it strongly depends on number of years one would stay in either property. Below is an example of a condo property that one would live for 5 years.

I will use an example of a rental property/condo here in Ottawa, somewhere close to Carleton University.
The rent for the place is Canadian: $1800 dollars + utilities
The purchase price for the condo around that area would be around $300, 000 to $400, 000, so lets take the median and say its $350,000 for the purchase.

Costs after 5 years

Buy Rent
Initial costs $20,518(5% down+CMHC+legal+inspection) $3600 (1 month rent as deposit. Some places charge 2 months rent as deposit.)
Recurring costs $136,680 (5 Year mortgage, tax and condo fees) $114,000 (5 year estimate cost of rent, with yearly increase)
Total Profit Estimate $100,000 $55,000

Detail Purchase Price

Purchase Price $350000
Monthly Condo Fee are around $350
For down payment minimum 5% $17500

As of today a low rate for 5 years closed is 2.96% mortgage offered.

Inspection, CMHC PST

Home Inspection with Tax $339
PST on CMHC Insurance $838

Legal Fees

Legal Lawyer Fees $1,225
Registrations $144
Disbursements $260
Tax (HST) $212
Total Legal Fees $1841

Total Cash & Spending

Your total mortgage borrowed $342,974

Total cash cost for purchase $20518
Your monthly payment to mortgage is estimate around $1618
Your estimated property tax per year $3,725
Total condo fees and property tax per month $2278
5 years, your mortgage amount left $292,986

The average increase of a property here in Ottawa can be around 4% per year over 5 years (depends on market value goes up and down but it averages out to be around 4%), thus over the 5 year period your property would have gained an estimated value of $70,000.

Assuming that you did not do any major renovations or maintenance, you lived at the place just like you were renting, and after 5 years you were selling, and just for simplicity you sold the condo for $420,000 at the 5 year mark.

Your amount after mortgage payout ($420000 – $292986) $127 014
Sum 5 Year mortgage, tax and condo fees $136 680

If you have rented for 5 years and with an increase of rent, the estimate cost is around $114, 000

Difference between rent and owning the condo/house in Ottawa is $22, 680
left over investment money for mutual funds at 6% per year $4568

Let’s say over 5 years you have around $25000 in investments, and adding your down payment that you did not have to pay since you were renting would have been estimated around $55,000.

As one can see the amount that you end up saving by investment isn’t as large as purchasing and selling of your place, where the payout is estimated close to $100,000.

Additional things to consider

There are certainly circumstances that one has to decide upon, like maintenance of the house, appliances if you own etc., market value going up and down. It is harder to predict the housing market, the amount of time you will be staying at one place also affects all the calculations. The taxes may increase over each year. Take those into consideration when you plan to rent or purchase, and if you get a roommate and rent out one of your rooms to a student while living in the property, then you would have more of a profit.

The New York Times has a great article on rent versus buy with a calculator to help you to find out which one suites better.

If you do plan to purchase, feel free to contact me and I will be able to find the right home and right price for you here in Ottawa.

Author: Nilay Ertemur

References: http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

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CMHC has announced two changes that would  take effect on May 30, 2014

1. Cancel of the CMHC Second Home Program

Starting June 1st, 2014, investors/buyers would need a minimum of 20% down payment for their second home, they will not be able to take advantage of the 5%+ down payment that CMHC used to provide to purchase the second home for kids, parents, or yourself.  Officially after May 30, 2014 a 20% down payment will be required to purchase the cottage or  lake side condo second home and CMHC will limit the availability of homeowner mortgage loan insurance to only one property (1-4 units) per borrower/co-borrower at any given time.

What the limit means is if you currently have a property that is CMHC insured mortgage and wish to co-sign for a borrower that is planning on buying a new property and s/he requires mortgage insurance as well, you would not be allowed to co-sign as you already have a CMHC insured mortgage. Although this does not stop gifted downpayment from a potential co-signer (e.g parents), which would allow the mortgager to qualify for the mortgage on their own.

2. Cancel of Self-Employed Without 3rd Party Income Validation

Self-employed Individuals will still be able to access and quality for CMHC mortgage insurance loans when the loan is below 20% down payment, but they will need to validate and prove their past 2 year income, provided by copies of tax notice of assessment, audited or unaudited financial statements, which would still need to be approved by CMHC.

There are definitely alternatives for self-employed individuals, if they cannot provide 2 year income paper work. I would strongly advice to speak to a professional mortgage broker who will be able to help with finding subprime lenders. Contact me for some references.

If you wish to avoid CMHC product changes, you will need to have to accept offer of purchase on a specific property and your application must be submitted to CMHC for approval prior to May 30th 2014. Contact me and I will be able to help you find you the right property.

Author: Nilay Ertemur

Reference: http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2014/2014-04-25-1600.cfm

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Disclaimer: The information provided here does not hold any legal binding or as legal advice, for legal advice please use a professional lawyer who would be able to advice on legal proceedings.

Divorce and separations

Divorces and separations are quite stressful and are emotional times in ones life. Dealing with finances and mortgage adds another level of anxieties. Most of us are very confused about our finances during the times of emotional roller coaster and there are certainly many questions that one may have regarding mortgage and house.

Here are some things you may wish to do and it may answer some of your questions.

Things to consider:

1. Separate your finances

This will allow you to establish and to build your own credit rating, example would be opening your own bank and credit card account.

2. Obtain a credit report

By doing so, you will know where you stand financially for your next home.

3. Look for an independent mortgage broker

An independent mortgage broker will be able to help you to find out what your finances can afford if you wish to purchase a new house, or to buy out your partner with equity. There are certain restrictions that apply when you use equity, and I will be able to refer you to some good mortgage brokers in the Ottawa area, if you have any questions regarding taking equity from home.

4. Get an agent to provide you with a CMA (Competitive Market Analysis)

An agent will be able to provide with a Competitive Market Analysis of your house, most lawyers and mortgage brokers require an analysis to know how much a property is worth, in case you wish to buy out your partner and stay in the same home.

5. Getting ready to sell or buy

If you wish to sell the house and divide up the proceedings, contact me if you are in Ottawa area or another professional real estate agent, since we will be able to maximize the returns by selling your house and be able to help you in your next house hunting experience. Do note that both parties need to agree with the listing contract and also in the process of accepting the purchase agreement, when there are offers to the property.

Author : Nilay Ertemur

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