Friday, December 23, 2016

Merry Christmas and thank you!!!

The best part of the Christmas season is that work slows down enough that I can take some time to reflect on what has happened in the last year. 2016 was a great one, despite the rough times in Alberta’s economy. I feel so blessed!
I want to take a moment to thank everyone that has contributed to my success in 2016.  I am truly grateful for the people I have the privilege of working with every day, including those behind the scenes that work so hard to make my job look easy! My clients never get to speak with the underwriter or lender rep who dedicates so much effort into getting their loan approved. Let me tell you, I could not do it without their amazing service and expertise!
In the spring of 2017 it will be 10 years since I started out in this crazy business. Over the years, I have had the privilege of getting to know some truly dedicated and hard working Realtors who work tirelessly, at all sorts of crazy hours, for their clients. They do not have an easy job but the great ones make it look that way. Thank you to my Realtor partners for your many referrals in 2016!
This can be a stressful job but I love it. I am humbled to be part of such an important time in my clients' lives, helping them to buy a home and navigate the often-complicated process of obtaining a mortgage.  I count my many, many blessings. This is an amazing job! Thank you to my clients for trusting me with this huge purchase.
Merry Christmas and a very Happy New Year!

Wednesday, November 23, 2016

Your relationship is over and you want to keep the house. What happens now?

Fortunately, there is a program offered by Canada’s mortgage default insurers (CMHC, Genworth & Canada Guaranty) to help you buy out your partner and move on with your life.

Mortgage qualifying rules have changed so it’s best to contact me, right away, to ensure that the numbers will work for you to qualify to take over the house, using only your income. We’ll complete a mortgage application and see how things look.

I will need to know what your house is worth today. If you aren’t sure, this is a good opportunity to contact your Realtor and ask them to estimate what it might be worth.  A requirement of the new mortgage will be an appraisal on your property, which will happen later. To start, I just need a realistic estimate of the value of your home.
Take the value of your home and multiply it by 0.95. This is the maximum amount you can finance through the new mortgage.

If everything looks good, you’ll need to provide me with a signed separation agreement that clearly outlines who pays who (child support, spousal support, buy out amounts etc). The marital home needs to be addressed in the agreement. It should state who is keeping the house and what happens if you cannot qualify for the mortgage by a certain date (house will be sold etc).

Your file will be sent to a lender for approval. The maximum amount you can finance is 95% of the value of the home. The new mortgage will pay off the existing mortgage on the house, as well as the buy out amount and possibly some marital debts (they must be detailed in the separation agreement). Typically, legal fees cannot be included in the new mortgage.

So, as an example: 

Your house is worth $400,000. 95% of $400,000 is $380,000. This is the maximum amount you will be able to borrow.

You currently owe $330,000 on your existing mortgage and the penalty to pay the mortgage is $5,000. Typically, couples will split the penalty amount. Your portion of the penalty can be included in the new mortgage; if it is outlined in the separation agreement.

You have agreed to split the equity in your house, with your ex. Your equity is the difference between what your home is worth and what you owe.

$400,000 value of marital home
-$330,000 Mortgage balance
-$5,000 mortgage early pay out penalty
$65,000 equity/ 2 people =$32,500 each

Based on the above example, we would set your mortgage up for $365,000 ($330,000 mortgage + $2,500 your portion of the penalty + $32,500 buy out to your ex). This loan works out to 91.25% of the value of your home which falls within the allowable amount (under 95%).

I hope that helps to clarify this program. Separating from your spouse can be extremely stressful and convoluted. My best advice is to make sure your agreement covers the amounts that need to be paid in clear detail. If it isn’t included in the agreement, then my lenders will not allow me to add it to the new mortgage. It is important to also make sure that your agreement explains what will happen if you are not able to obtain the mortgage.

If you are currently going through a separation, and are thinking of keeping the home, or purchasing a new one, please contact me at 780-722-6287! 

Thursday, November 3, 2016

Confused about the new mortgage rules?

As per my previous blog posts; new housing policies have recently come into effect wich will greatly affect mortgage qualification. 

Do these changes affect you? In order to clear the fog on the new regulations, I have prepared the following Fact Sheet.

Please download it here, and do not hesitate to contact me if you have any questions or concerns. Remember, as your Edmonton Mortgage Broker, I am the professional with the expertise and advice that can help you navigate these changes.

Friday, October 7, 2016

Big banks win, alternative lenders lose with new mortgage rules: First National Financial CEO

The CEO of one of my favourite mortgage lenders, First National, explains the recent mortgage changes and the effect these will have on the industry and consumers to BNN. First National is the largest non-bank mortgage lender in Canada and has been providing mortgages to Canadians for 25 years. They offer great rates and amazing service to Mortgage Brokers.

If you have any questions, or concerns, regarding the upcoming mortgage changes please drop me a line at 780-722-6287.

Monday, October 3, 2016

Breaking news: Government of Canada changing mortgage qualifying rules


In an announcement earlier today, the Department of Finance outlined new measures to maintain the stability of the housing market. They announced that there will be a stress test required for ALL insured mortgages in Canada, beginning October 17th 2016.

Under the current set of rules, a stress test must be implemented for all insured mortgages where the mortgage term is LESS THAN 5 YEARS, or where there is a VARIABLE RATE MORTGAGE in place.

The stress test requires that mortgage lenders must qualify you at the Bank of Canada benchmark rate, not the rate you are paying. The Bank of Canada benchmark rate is currently 4.64%.

Let’s look at an example; say you are purchasing a home and wish to take a 1-year mortgage term at 2.29%.  Despite the fact that you are paying 2.29%, I have to ensure that you qualify for the mortgage at the Bank of Canada Benchmark Rate of 4.64%.

Up until, now there was one big exception to the stress test. Anyone taking out a 5-year fixed mortgage DID NOT have to pass the stress test. So, that meant that I could qualify you at the rate you were paying (currently 2.44%). But, this exception only applied to a 5-year fixed term mortgage.
On October 17th the rules are going to change BIG TIME. All insured mortgages will HAVE to pass this stress test, regardless of what mortgage term is chosen.

This means that if you are looking to purchase a home, after October 17th 2016, you will have to qualify for the mortgage at the benchmark rate (currently 4.64%). This is going to GREATLY affect some borrowers.

If you are currently pre-approved, please contact me to discuss how this change will affect the mortgage amount you qualify for as it will be reduced! If you are currently approved for a mortgage and have not taken possession of the house yet, do not worry, this will only affect new applications so you will not be affected. If you have questions, please get in touch and I will explain this change in more detail. If you currently have a mortgage, and are up for renewal with your mortgage lender, this should not affect you. No need to panic.

Here is the official wording on the change from the Department of Finance’s website:

To help ensure new homeowners can afford their mortgages even when interest rates begin to rise, mortgage insurance rules require in some cases that lenders “stress test” a borrower’s ability to make their mortgage payments at a higher interest rate. Currently, this requirement only applies to a subset of insured mortgages with variable interest rates or fixed interest rates with terms less than five years. Effective October 17, 2016, this requirement will apply to all insured mortgages, including fixed-rate mortgages with terms of five years and more. Homeowners with an existing insured mortgage or those renewing existing insured mortgages are not affected by this measure.

I will be posting more information as it becomes available…

Breaking news: Government of Canada changing mortgage qualifying rules


In an announcement earlier today, the Department of Finance outlined new measures to maintain the stability of the housing market. They announced that there will be a stress test required for ALL insured mortgages in Canada, beginning October 17th 2016.

Under the current set of rules, a stress test must be implemented for all insured mortgages where the mortgage term is LESS THAN 5 YEARS, or where there is a VARIABLE RATE MORTGAGE in place.

The stress test requires that mortgage lenders must qualify you at the Bank of Canada benchmark rate, not the rate you are paying. The Bank of Canada benchmark rate is currently%.

Let’s look at an example; say you are purchasing a home and wish to take a 1-year mortgage term at 2.29%.  Despite the fact that you are paying 2.29%, I have to ensure that you qualify for the mortgage at the Bank of Canada Benchmark Rate of 4.64%.

Up until, now there was one big exception to the stress test. Anyone taking out a 5-year fixed mortgage DID NOT have to pass the stress test. So, that meant that I could qualify you at the rate you were paying (currently 2.44%). But, this exception only applied to a 5-year fixed term mortgage.
On October 17th the rules are going to change BIG TIME. All insured mortgages will HAVE to pass this stress test, regardless of what mortgage term is chosen.

This means that if you are looking to purchase a home, after October 17th 2016, you will have to qualify for the mortgage at the benchmark rate (currently 4.64%). This is going to GREATLY affect some borrowers.

If you are currently pre-approved, please contact me to discuss how this change will affect the mortgage amount you qualify for as it will be reduced! If you are currently approved for a mortgage and have not taken possession of the house yet, do not worry, this will only affect new applications so you will not be affected. If you have questions, please get in touch and I will explain this change in more detail. If you currently have a mortgage, and are up for renewal with your mortgage lender, this should not affect you. No need to panic.

Here is the official wording on the change from the Department of Finance’s website:

To help ensure new homeowners can afford their mortgages even when interest rates begin to rise, mortgage insurance rules require in some cases that lenders “stress test” a borrower’s ability to make their mortgage payments at a higher interest rate. Currently, this requirement only applies to a subset of insured mortgages with variable interest rates or fixed interest rates with terms less than five years. Effective October 17, 2016, this requirement will apply to all insured mortgages, including fixed-rate mortgages with terms of five years and more. Homeowners with an existing insured mortgage or those renewing existing insured mortgages are not affected by this measure.


I will be posting more information as it becomes available…

Monday, August 22, 2016

Talking to college bound kids about credit

If you have a child bound for university or college this fall, now may be the time to sit them down and have "the talk". The credit version, that is.

Because along with an abundance of frosh week activities chances are, this September, they'll also be faced with the opportunity to acquire credit cards-cards that will come with plenty of free swag, like t-shirts, and booze coolers and other amazing incentives, in exchange for signing up. The thing is, without a thorough understanding of how credit cards work, these little pieces of plastic have the potential to destroy an individual’s credit rating-before they even have a chance to establish one.

So take this time now to sit down with your child and talk to them about credit cards. If they're going to have a job in that first year of school, it might not be a terrible tool to have to build their credit rating-provided they keep their credit limit to a minimum (which can be done with a quick phone call) and they pay their balances off every month. Make sure they fully understand both the pros and cons of this financial tool, and the dangers of falling behind on their payments. In some cases, it may even make sense to set them up with a prepaid card, to help them get the hang of it.

Tuesday, April 5, 2016

Avoid getting in over your head when purchasing a home...

Barbara Knoblach, a certified money coach with Money Coaches Canada. spent some time speaking on Edmonton AM this morning. She offered some great tips on keeping it real when purchasing real estate. She points out that it is extremely important to remember that, when going through the pre-approval process, Mortgage Brokers and lenders do not take into consideration your lifestyle which includes how many vacations you take a year, how often you eat out, or go shopping. We also don't consider the monthly cost of big ticket items like child care expenses, the cost of vehicle insurance (which can vary widely between individuals) or how much you spend on groceries every month (in my house that is a HUGE expense because we try to eat very healthy!).

Mortgage lenders are only required to look at your gross income and your monthly debt obligations so that may leave out a large chunk of your monthly spending.

I completely agree with Barbara's thoughts about real estate purchasing. She also speaks a bit about interest rates and how we have enjoyed a low interest rate environment for quite some time. While a low rate environment can save you money, it will not save you in the long run if you borrow more than you should. I often encourage my clients to pretend their mortgage rate is much higher and make a larger payment every month by utilizing the pre-payment privileges offered by their lender.

Barbara is bang-on when she says that it is not up to the bank to approve you; you must approve yourself. Take some time to go through your expenses and ensure you have lots of wiggle room every month to pay for your lifestyle and unexpected expenses. Make sure your mortgage payment would be affordable at 4% or 5%.

Most importantly, the onus is on you to make sure you don't get in over your head and that you can weather the storms that may come your way in life. A home will likely be your largest monthly expense and it is not something that can quickly be changed if you need to get out of it.

Don't let your house own you! A house is only one aspect of your life. If you have any questions at all about how to apply for a mortgage, or how to calculate a monthly budget please get in touch with me. I'd be happy to help!






Tuesday, March 1, 2016

HOME BUYERS' TAX CREDIT 101

If you bought a home in 2015, you may or may not be aware that you're eligible for a Federal tax refund this upcoming tax season. If you'd like to learn more about the First Time Homebuyers' Tax Credit-including how to qualify-the Canada Revenue Agency put together this informative video with all you need to know!

If you have additional questions about the First Time Home buyers' Tax Credit-or about your mortgage in general-please don't hesitate to reach out to me.

Friday, February 19, 2016

Navigating the financial fallout from a divorce...

Divorce will create havoc in your emotional life, but likely even more so with your finances. I have long said that it is way too easy to tie the knot, and too difficult to untie it. There's some great information in this article about how you can mitigate the financial ravages of divorce.
But, if you are in the throes of divorce, what happens to your marital home?
No one really wants to think about the possibility of divorce when you buy your home as a couple, but as we all know, it does happen. So what happens to your mortgage if you decide to call it quits?
Typically, couples have a joint mortgage where both of their names are listed on the title of the home as well as the mortgage itself. This leaves you with a couple of options:
1. Sell the property, split the proceeds fairly and go your separate ways. 
2. One individual buys the other out of their part of the mortgage and property title*.
How do you know which is the right decision for you?
Well, the first option is significantly less complicated. You simply put your home up for sale, sell it, and split the proceeds according to a predetermined agreement.
The other option depends on a variety of factors. Especially if you face other troubling circumstances at this time, like if young children are involved and need to remain in the house, or the market is down and neither of you can afford to face the loss. Sometimes the second option is the only option.
If that’s the case and you’re going to be the one buying out the other half, you will have to refinance your mortgage using a single income. A good rule of thumb is to find out whether or not you can afford the new mortgage payments. Any lender will ask for proof that you are capable of paying the new mortgage payments even before you are able to apply for refinancing.
You will also need to negotiate and agree on an amount to buy your ex-partner out. If the equity in your home is sufficient, you may be able to withdraw it to pay out your existing spouse.  If you do decide to go this route and refinance your mortgage post-separation, please contact me to help you navigate this, sometimes daunting, process.
Above all else, if you are facing a divorce or separation that will affect your mortgage – get informed first. It is difficult to know if you are making the right decision unless you discuss it with an experienced mortgage provider. I can help by informing you of your options and the necessary steps to proceed with obtaining a mortgage on your own, and ultimately help you find a solution that best fits your current financial situation.

Don’t hesitate to call me today if you need help or have questions about your mortgage 780-722-6287. 

Thursday, February 11, 2016

Save on your income taxes and save for a down payment at the same time!

Did you know? If you are a first time buyer, you are able to withdraw up to $25,000 from your RSP account, tax free. The funds can be used for the down payment on your new home. The program stipulates that you have 15 years to re-pay the money back into your RSP account. If you don't have an RSP, or have not made a contribution for 2015 tax year, this might be the time to persue this down payment strategy! You have until February 29th to contribute to an RSP for a tax deduction for 2015. Please get in touch with me at 780-722-6287 or natalie@youredmontonmortgage.com if you want to discuss this program in more detail!  
For more information on the Home Buyer's Plan click HERE

Wednesday, February 10, 2016

Why it's a good idea to check your credit once a year...

It's a good rule of thumb to check your own credit, once a year, to find out what your score is and to make sure there aren't any mistakes reporting. I am available to answer any questions you may have about how credit works and how you can improve your score. Unfortunately, this sort of thing is not taught in school and I really believe that information is power! So, please get in touch with me if you have any questions at all about your credit situation.