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Friday, 30 August 2013

Is my mortgage affordable? Can I make it affordable?

I suspect that by now, mortgage professionals and clients are well cognizant of B20; the underwriting guidelines for residential mortgages that OSFI, the regulator of all Canadian economic organisations, has enforced on all regulated lenders and CMHC. These underwriting guidelines have been created at the insistence of the Financial Stability Board, the financial oversight association of all G20 countries. The creation of these guidelines is a direct outcome of the economic crisis caused by poor American mortgage lending practices. It’s absolutely vital clients and brokers get a good overview of the position: the components of B20 in general terms and what it means to lenders; what it means to them, the brokers; and, then, how we at MortgagePRO are responding.

Components of B20.
The guideline groups out what OSFI considers to be careful residential mortgage underwriting standards. A residential mortgage is advised to be an “A” or any other product, like a HELOC, that is protected by a residential house -- up to a four-unit house.

The guidelines set five values for sound residential mortgage underwriting:

·         All lenders must have a policy explaining risk appetite, governance and oversight mechanisms to ensure lenders pursue their own principles.
·         Lenders should confirm the borrower’s persona, backdrop and illustrated enthusiasm to service debt obligations on a timely basis.
·         Lenders must consider the borrower’s capability to service their debt obligations on a timely cornerstone.
·         Lenders should be persuaded that the worth of the property being financed has been confirmed by an unaligned third party.
·         Lenders must stress check their portfolio of enterprise for unlikely, but reasonable scenarios to work out the impact to their business. Lenders are anticipated to impose a higher grade of due diligence on higher risk deals, perform ongoing risk assessments on the insurers they use and usually pay close vigilance to the risk adhered to their residential mortgage portfolio.

While not one of the principles, on a quarterly cornerstone, lenders must now publicly reveal their book of business by insured vs. uninsured borrowings, amortization buckets, and mean LTV at origination. They must furthermore provide commentary on the influence on residential mortgage loans and HELOCs in the happening of a financial worsening.

What does this means to our clients?
In terms of “A” deals; perform now, brokers should understand their purchaser,their economic circumstances and be persuaded that their client has the ability to repay.
For HELOC “A” purchasers, LTV on the HELOC piece of the accelerate has been limited to 65%. Brokers can still provide their purchasers with an 80% LTV choice by blending the HELOC piece with a fixed or variable piece if the HELOC product permits, such is the case As I suppose is the practice now, brokers must understand their client, understand their client’s financial attenuating factors and be persuaded that their purchaser has the proficiency to repay
With MortgagePRO HELOC merchandise dwelling works. For purchasers, that we call alternative lending purchasers, encompassing “B,” NIQ and Stated earnings purchasers, brokers will probably have to supply a little more data. The biggest challenge will be business-for-self (BFS) purchasers who do not have traditional earnings confirmation articles.

What does this means to MortgagePRO Mortgage?
Well in abstract, not much has altered. Our previous underwriting principle was generally compliant with B20 regulations. We have alternative lenders, which is BFS and “bruised borrowing” mortgage lender. We have always undertook due diligence to determine the borrower’s proficiency to make repayments.
We also offer “A” residential mortgages and have very comparable HELOCs, which is now restricted to 65% on the HELOC portion as a outcome of B20. Prior to B20, we did not have asserted TDS and GDS ratios in our alternate lending principle. Consequently, our underwriting principle will now include TDS and GDS ratio bounds for our alternate lending goods. These bounds will be considerably higher than "A" lending requirements as our major aim will continue to be on double-checking affordability for the borrower.
B20 does state that if a lender advances a “nonconforming mortgage,” the LTV is restricted to 65 per cent. At MortgagePRO where you well informed, a non-conforming mortgage is one where a borrower has either (or both) a lower-than mean beacon score and/or the borrower’s ability to service the suggested debt will not be confirmed to our approval. Defining a non-conforming mortgage beyond this is difficult at this time.
In response to the challenge to approve income grades for BFS clients who do not have customary earnings confirmation documents, for the last two years, we have requested bank declarations as a means of doing so. That will not change. If a BFS client states he/she has earnings of $75,000 per annum, we would anticipate to see bank declarations that would propose the enterprise can pay the borrower $75,000 every year. We may furthermore need to glimpse individual bank statements, illustrating individual earnings at this grade.
This all supposes no customary earnings documents, such as levy comes back, are available. We propose brokers continue to inquire their clients, “is this mortgage affordable for us?” Our anticipation is that we are persuaded that our clients can pay for and can repay this liability and we can glimpse in their bank statements that the liability is affordable…

We understand every client has unique needs and circumstances and therefore we advise you to set up a FREE no obligation consultation with one of our specialist to provide free advice and or set up a plan custom fitted to the individual need of YOU.

Monday, 26 August 2013

Realtors need Mortgage Broker they trust

Networking of Realtors and Mortgage Brokers benefits clients!

Believe it or not, more people are choosing to use real estate agents than ever before. In correlation to the increased demand for real estate agents is the so-called democratization of information – the opening of the internet and the general trend of consumers choosing how and when they purchase products. You might analyze the statistics on Internet adoption and demand for real estate agents, an you will arrive to a story and see the picture.
Perhaps the greatest value a real estate agent provides for the home buyer is a sense of security that they are making the right decision and that the deal is correctly put together. 
With abundance of accessible information online, it is likely home buyers are realizing just how much information is available and are recognizing the need for an expert in the purchasing process
Compared with last year statistics a whopping 20 per cent more people using Realtors. That’s a good news story for Canadian real estate. After an onslaught of news about an uncertain economy over the last four years, along with a general opening up of information online, you would be forgiven for assuming that Realtors’ future in the marketplace might be at risk. The numbers are not reflecting that, and the story doesn't stop there. More and more Realtors are pairing up with mortgage brokers. There are advantages for such collaboration and the one is that mortgage brokers such MortgagePRO is providing pre-approval in the matter of hours. Now that saves time and energy as the Realtor will only show properties to potential buyers, what they can afford. 
Also there is a general misconception by potential home buyers, credit bureaus as good as they can read it. There is more to it and a good mortgage broker can and will work on your approval, even when client have thought it is out of reach. MortgagePRO has a team of seasoned mortgage brokers experienced in creative financing, solutions for difficulties and plan to succeed. Not all mortgage brokers have the same degree of expertise and the smart to overcome obstacles for a positive results. MortgagePRO does.

The other good news, we not only provide exceptional fast service, we also pay a referral fee to our Realtor friends

Saturday, 17 August 2013

CMHC-panic or just caution-tightening rules

This news was provided by MortgagePRO Ltd!
We believe a well informed client makes better decision. We keep you posted!
The housing market may be recovering just  very quick for CMHC, the government crest company that has a key function in forming the market.
Doug Porter, chief economist with BOM, wonders if lodgings statistics over the last couple of months displaying sales and prices rebounding might have spooked the CMHC.
“I believe this step is being taken because we have seen some signs in latest weeks that the market is not chilling as much as had been expected,” said Mr. Porter, on the market. “All the debate has been if we will have a supple or hard setting down and I would inquiry if the market had any setting down whatsoever.” Canada Mortgage and Housing Corp. is limiting guarantees it boasts banks and other lenders on mortgage-backed securities. Today's best mortgage rates!
CMHC has notified mortgage lenders that they will each be constrained to a maximum of $350-million of new assurances this month under its nationwide Housing proceed Mortgage-Backed Securities (NHA MBS) program.
The federal crest company was granted administration to guarantee up to $85-billion this year under the program — of which about $66-billion was pledged by the end of July and approaching the total of $76-billion in all of 2012.
“As a result of this unforeseen increase in issuance volumes to designated day and to better organize volumes going ahead, CMHC will be inserting a formal share process later on in August,” the bureau said in an Aug. 1 note to lenders. Mortgage Brokers Calgary Alberta 
Last week, both realtors in both Vancouver and Toronto released outcomes showing a reinforcing market in Canada’s two most costly towns for housing.
Toronto July sales were up 16% from a year ago with average charges increasing 8% during the identical time span. Vancouver sales were up about 40% from a year before and were 0.1% above the 10-year mean.
CMHC’s move may boost mortgage rates ascribed by Canada’s largest banks by between 15 and 45 cornerstone points, nationwide Bank Financial Inc. analyst Peter Routledge said in an Aug. 5 research note. A basis issue is 0.01 percentage issue. Smaller competitors that don’t glimpse their funding charges boost to the same degree may advantage, he said.
“CMHC is impelling back on the banks, (saying) ‘You’re going to take more risks on your balance sheet if you desire to compose these mortgages.’ Well, the banks aren't going to compose the mortgages,” said vice president and portfolio supervisor at Baskin Financial Services, which owns Canadian bank portions, notified Reuters. 
“No way are they going to take on risk when every person is concerned about the market … so this is going to cool off the market.”
Canada’s five biggest mortgage lenders — Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Nova Scotia and Bank of Montreal — have utilized the CMHC’s nationwide Housing Act Mortgage Backed Securities (NHA MBS) program to alter borrowings into securities with CMHC, or government, backing.
The program allows investors to purchase government-backed mortgage paper and permits the lenders to issue mortgages at a lower cost.
But investment Minister Jim Flaherty has conveyed concern that the lodgings market might overheat and contaminate the finances and has taken a number of steps in latest years to stem the flow of mortgage borrowing.
Last summer, Mr. Flaherty introduced tighter directions for mortgage lenders and borrowers — a change that the genuine estate and lending commerce state was the main cause for a slowdown in residential house sales that began last August and proceeded through the first part of 2013.
This jump, Mr. Flaherty furthermore went as far as to publicly chastise some banks for dropping their mortgage rates too low.

Housing-market data are displaying few signals of a hard setting down even in the middle of the precautions  Home sales in Toronto and Vancouver, Canada’s two biggest genuine land parcel markets soared in July, the cities’ real-estate boards described last week.

Friday, 9 August 2013

Rent to own: avoid the traps

Getting yourself into a rent to own situation can benefit you, when you do not have enough down payment and or you have a credit what will take a while to get repaired. It gives you a chance to purchase a property for a set, today price, but pay for it later. If the market will go up, you are the winner.
However you must do a very thorough due diligence or it might will come back to hunt you. Knowledge is gold and you can find some here.
The process is, the vendor and the wanna-be home-owner signs a Lease Agreement with an Option to Purchase, paying rent and some, what will go toward to the down payment. Typically 2-3-5 years within the Tenant has the option to purchase. It is enough time to accumulate  plus save some down payment and or repair credit to be able to obtain a mortgage.
A benefit for the landlord is that tenants who have this option most likely will take better care of the property, since they looking forward to become the owners.
Be aware, make sure the person you are dealing with is the real home owner and not a middle-man, whom has a deal with the real vendor and he is just playing it down to you and making profit on your contract. He might of promised the owner a sure sale in case you will not come through. He will charge a fee and than disappears in tin air, leaving all the headaches to the buyer and the vendor. This would be not the first time or the last time when con artists will take unsuspecting people for a ride. Be sure always deal with a reputable lawyer in the transaction or just simply look for the advise of a seasoned mortgage broker.
To avoid traps, here are some suggestions:
·         any deposits and or funds you put toward to the purchase price of the home to be well documented and to be held preferably in a lawyers bank account and it should not to be paid to the vendor till the sale takes place and you assure to have a mortgage and will be able to finalize
·         look up a good trustworthy mortgage broker, discuss what you are getting into and ask for the help of such to obtain a title, evidencing the owners name and all encumbrances, mortgages on the title and so you will be well informed on all aspect of the property and its owner

·         with the help of a mortgage broker, of course you must choose the right broker, who is willing to help you not only with getting into the agreement but securing you a mortgage down the road and also help to repair your credit, make sure your interest will be registered on title. As your mortgage broker for FREE consultation session and if he give you one you might just found yourself a good alliance and trusted advisor with experience in these type of transactions