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Mortgage Knowledge
A reverse mortgage can be the difference between selling your home and living the comfortable retirement that they’ve worked so hard for.
The CHIP Reverse Mortgage is a loan secured against the value of the home. There are no regular mortgage payments – meaning you can allocate the money towards what you really need it for. If you would like to learn more, please contact us at 902-401-8143.
More new mortgage rules come into effect January 1, 2018 which will make it trickier to negotiate a mortgage for many Canadians. But with a little expert advice, we can help ensure you have a happy new year that keeps you on the path to prosperity for the coming year and beyond.
1. That “best” 5-year rate? It probably isn’t. Fact is, a “best rate quote” is now meaningless, because mortgage pricing is now based on multiple factors. Everything depends on your personal situation. That’s why we start with an in-depth assessment, and then review a broad range of lenders and products for the best fit for you.
2. Going variable and long may pay off. If you have over 20% equity, you may want to consider a 30-year amortization mortgage. Benefits can be significant and outweigh any rate premium – more purchasing power, easier mortgage qualifying, and lower payments to boost cash flow or to allow you to divert cash to build a savings buffer or use for investing. Taking a variable-rate mortgage could also improve your mortgage qualifying, then you can lock in later.
3. The devil is in the details. You can save thousands by making sure you get a mortgage that has a fair prepayment penalty and will also treat you fairly at renewal. Don’t end up paying exorbitant fees or be forced to take a high rate at renewal. Look deeper than rate.
4. High-ratio insurance costs more, except when it doesn’t. While counter intuitive, lenders offer the best rates to borrowers who need mortgage insurance because they have less than 20% down. So even if you have more than 20% down and don’t need mortgage insurance, it may actually be worth purchasing. You’ll get a lower rate and better options at renewal.
5. At renewal, insured mortgages are gold. Lenders love insured mortgages. If you have one, be sure to check out the competitive landscape at renewal. If you aren’t sure if your mortgage is insured or not, we can find out.
6. No company paycheque? Start building your case. If you are self-employed, get in touch now for advice on mortgage planning for the future. We will advise you on what documentation and information you’ll need so that we can build a strong case on your behalf for lenders.
7. Does a collateral mortgage make sense? A bank collateral mortgage is registered for more than the value of the home at closing. It can be difficult to transfer and you may find yourself locked in with that bank. Always get a second opinion!
8. Let renters help pay your mortgage. A home with a rental suite could help you become a homeowner in that neighbourhood you love, or help you offset mortgage payments in the house you’re in.
9. Keep good credit habits. The best rates go to borrowers with the best credit scores. Keep up good credit habits: pay your bills on time, never let your debt exceed more than 30% of your limit, and don’t be tempted to apply for store cards “to save on your purchase today”.
10. Let’s keep a dialogue going. Wherever you are in your homeownership journey, a great conversation at any time can identify all the ways you can save thousands of dollars in interest and fees during your mortgage years.
New year. New rules. New chance to review your mortgage and wealth-building options. Get in touch for a review of your situation. Phone 902-401-8143
If you're thinking of getting one of the zillions of credit cards out there, make sure you know
these 10 nuggets of credit card wisdom before signing up.
1. A credit card is not a debit card
If someone asked you to explain the difference between a credit card and a debit card, what
would you say? We hope you'd tell that someone that using a credit card is like taking out a
short-term loan for a purchase. Also, despite appearances, a credit card doesn't work like a debit card, which takes money directly from your checking account.
You get extra points if you mention that a credit card carries interest, which you can avoid if you pay your credit card bill in full before the end of the billing cycle.
2. The real reason to get a credit card
People will say you need a credit card to build credit, but "need" is too strong a word. A credit
card can help you build credit, and a good credit score can help you save money on loans down the road (mortgages, auto loans, etc.).
Some might argue that cash back rewards are the real reason to get a card, but that's not nearly as important as maintaining and building your credit score.
3. The two types of credit cards
Credit cards come in two types: secured and unsecured. Secured means you'll have to put down a cash deposit. A secured credit card is a good type of credit card for those with low or no credit.The downside is your card limit is likely the same amount as your cash deposit. An unsecured credit card also has a card limit, but instead it's determined by your credit history and income.
4. All about that APR
The APR you see thrown around in commercials and ads refers to an annual percentage rate. It's okay if you don't remember what APR stands for, but you'll always want to check the actual
percentage of an APR before applying for a credit card. After all, the APR is what you'll be
charged if you don't pay off your full balance when payment is due, and some APRs can be as
high as 30%.
5. Watch out for nonstandard fees
Some credit cards have nonstandard fees—which, as you may have guessed by the name, are
atypical. Good credit cards don't deal with nonstandard fees, such as an audit fee, conversion fee,quarterly technology fee, and security fee.
6. Plan on paying more than the minimum payment
If you were to pay only the minimum required payment on your credit bill each month, you just
might never pay off your credit card. As a best practice, try to pay off your credit card in full
each month—in other words, don't spend money you don't have.
7. Watch out for an annual fee
If you're not going to use a credit card frequently, you're likely better off getting a credit card
without an annual fee. These fees can cost as much as $100 to $300 per year. However, not all
credit cards with annual fees are bad, and there are plenty of cards without them.
8. Understand credit card benefits
Credit card benefits come with their own terms and conditions. For example, you may be enticed by cash back rewards only to find that said rewards are limited to qualified purchases or change from quarter to quarter. If you don't understand the ins and outs of a credit card's benefits, you likely won't get the most out of your credit card.
9. A credit card agreement is binding
Signing up for a credit card means you're entering a legal contract. Make sure you're comfortable with the terms and conditions set forth by the issuer, such as APR, fees, and credit limits.
10. Be sure to shop around
There are countless credit cards out there, so do some comparison shopping before you sign up. Don't let yourself feel pressured to sign up for a store credit card when you're at checkout.
Taking a few minutes to look at what other credit cards are out there can save you some serious dough in the future.
https://ca.yahoo.com/finance/news/10-things-know-getting-credit-130156079.html
Wouldn’t it be nice if you had the money to do more of the things you want to do? A CHIP Reverse Mortgage could be just what you need. It’s the simple and sensible way to unlock the value in your home and turn it into cash to help you enjoy life on your terms.
BENEFITS OF A CHIP REVERSE MORTGAGE
You receive the money tax-free. It is not added to your taxable income so it doesn’t affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.
You can use the money any way you wish. Maybe you want to enjoy your retirement or cover unexpected expenses. Perhaps you want to update your home or help your family without depleting your current savings. The only condition is that any outstanding loans (e.g. existing mortgage or home equity line of credit) secured by your home must be paid out with the proceeds from your CHIP Reverse Mortgage.
No regular mortgage payments are required while you or your spouse live in your home. The full amount only becomes due when you and your spouse no longer live in the home
You maintain ownership and control of your home. You will never be asked to move or sell to repay your CHIP Reverse Mortgage. All that’s required is that you maintain your property and stay up-to-date with property taxes, fire insurance and condominium or maintenance fees while you live there.
You keep all the equity remaining in your home. In many years of experience, 99 out of 100 homeowners have money left over when their CHIP Reverse Mortgage is repaid. And on average, the amount left over is 50% of the value of the home when it is sold.
FREQUENTLY ASKED QUESTIONS
How does a CHIP Reverse Mortgage work?
A CHIP Reverse Mortgage is secured by the equity in your home. Unlike a traditional mortgage in which you make regular payments to someone else, a reverse mortgage pays you.
The big advantage with the CHIP Reverse Mortgage is that you do not have to make any regular mortgage payments for as long as you or your spouse lives in your home. That’s what has made reverse mortgages such a popular solution in Canada, the U.K., the U.S., Australia and other countries.
Who is it for?
The CHIP Reverse Mortgage is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.
How much can I get and how is it calculated?
You can receive up to 55% of the value of your home. The specific amount is based on your age and that of your spouse, the location and type of home you have, and your home’s current appraised value. You can contact me and I can quickly give you an estimate of how much you may be approved for.
How do I receive the money?
You can choose how you want to receive the money. The CHIP Reverse Mortgage gives you the option of receiving all the money you’re eligible for in one lump sum advance, or you can take some now and more later, or you can receive planned advances over a set period of time. Planned advances are available on the Income Advantage product.
Will the homeowner owe more than the house is worth?
The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.
Will the bank own the home?
No. The homeowner retains title and maintains ownership of the home. It’s required for the homeowner to live in the home, pay taxes on time, have property insurance, and maintain the property in good condition.
What if the homeowner has an existing mortgage?
Many of our clients use a reverse mortgage to pay off their existing mortgage and debts.
Should reverse mortgages only be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to supplement monthly income instead of selling and downsizing, or taking out a conventional mortgage or a line of credit.
What if the homeowner can’t afford payments?
There are no monthly payments required as long as the homeowner is living in the home.
Contact us today if you have any questions or if you’d like to see how much you can get!
Yhard Mortgages 902-401-8143
Interesting article....check it out
3 tips that could save you thousands on your
mortgage, as interest rates rise
By Erica Alini National Online Journalist, Money/Consumer Global News
Sean Cooper wiped off his $255,000 mortgage in exactly three years and two months, at age 30.
He took on two extra gigs, in addition to his daytime job as a pension plan analyst in Toronto. He
lived in the basement of his own house, while tenants “thumped around upstairs.” And he threw
every spare penny at his quarter-million loan.
Two years later, Cooper is mortgage-free and has written a well-reviewed book about it. But he
is still working 70-hour weeks and living in the basement. The goal now, he told Global News, is
to amass enough cash to retire extra early, if he so chooses.
Clearly, the workaholic, frugal lifestyle suits him. And clearly, Cooper isn’t your average
homeowner.
But the advice he has is aimed at the more common species of mortgage-holder. You know, the
kind with one job, and possibly a family, as well as a taste for things like work-free weekends,
vacations and the occasional dinner out.
It’s advice to which Canadians should pay particular attention now, as interest rates begin what
most economists believe is a gradual but potentially long march upward.
“It makes sense to pay down your mortgage now,” Cooper said.
If you’ve been coasting along with your mortgage payments, now is the time to kick it into high
gear, he argues. And if you’re looking to get a new mortgage or renew the one you have, doing
some research is more important than ever.
Cooper saved around $100,000 in interest with his extreme mortgage pay-down plan. You
probably won’t be able to replicate that, but might still be able to shave thousands off your own
mortgage interest by following his top three tips:
1. Shop around – and not just for the lowest rate
Of course, you should get the lowest interest rate that you can. But rates aren’t the only thing to
consider when comparing options. The point is to get the best deal, he notes, which isn’t
necessarily the same thing as the lowest price.
In addition to interest rates, pay attention to what Cooper calls the three Ps:
• Prepayment privileges: As interest rates rise, a bigger chunk of your mortgage payments
will go toward interest rather than the principal. That’s why it’s important to get a
mortgage that will allow you to make large lump-sum contributions and increase your
monthly payments if you decide to pay down your debt faster. Non-bank lenders might
both lower rates and offer more generous prepayment privileges than the big banks, noted
Cooper. “Non-traditional lenders with a solid track record are worth considering,
especially if it means paying down your mortgage sooner,” he writes in his book, Burn
Your Mortgage: The Simple, Powerful Path to Financial Freedom.
• Penalties: What would happen if you were to break your mortgage? That’s a question
every mortgage applicant should ask herself, argues Cooper. People wind up having to
break their mortgage for any number of reasons: They move, they get divorced, they lose
their jobs. And that can cost them thousands of dollars in mortgage penalties, which is
why it’s important to look at the fine print. In Canada, if you have a variable-rate
mortgage, the penalty is generally three months’ interest. If you have a fixed rate,
however, you could get dinged for much more than you think. That’s because you’ll have
to pay the greater of either three months’ interest or something called the interest rate
differential (IRD), which is based on current mortgage rates and your remaining
mortgage balance. If you’re going for a fixed-rate mortgage, it’s important to ask your
lender whether the IRD is calculated based on their discount rate or their considerably
higher posted rate. “The big banks calculate fixed-rate penalties using their posted rates,”
Cooper writes.
• Portability: Speaking of mortgage penalties, one way to avoid them if you move is to
have a portable mortgage. This means you can transfer your mortgage to your new home
and combine it with a new loan, if necessary. Another great feature that could save you
thousands of dollars in penalties is having an assumable mortgage. That would allow you
to leave your mortgage behind for another qualified buyer instead of breaking it.
2. Make lump-sum payments whenever you can
• Here’s a crucial nugget about lump-sum payments: Unlike your regular monthly
instalments, all of the money goes toward reducing your principal. That’s why Cooper
advises making lump-sum payments whenever you can.
• If you have no spare cash in your budget, you could still use what Cooper calls “found”
money: A one-time bonus at work, an inheritance, gifts of money, or even your tax
return.
• Lump-sum payments can shave thousands of dollars on the interest on your mortgage and
years on your amortization period (the amount of time it will take you to pay off your
loan in full).
• To use an example from Burn Your Mortgage, making lump-sum contributions of just
$2,000 per year on a $300,000 mortgage would save you $17,774 in interest and allow
you to pay off your mortgage six years sooner, assuming a five-year fixed-rate mortgage
at 2.99 per cent interest rate and 25-year amortization.
3. Accelerate your mortgage payments
• The most painless way to ramp up your mortgage payments and shorten your
amortization period is switching from monthly to so-called accelerated bi-weekly
payments, Cooper told Global News. Here’s what that means.
• In the above example of a $300,000 mortgage, your monthly payments would be $1,418.
If you switch to a simple bi-weekly arrangement, your payment is calculated as $1,418 ×
12 months/26 weeks = $654. You’ll be saving a little bit in interest but not much.
• Accelerated bi-weekly payments, on the other hand, are calculated as follows: $1,418 ×
12 months/24 weeks = $709. Your payment is slightly higher, covering the equivalent of
a 13th monthly mortgage instalment every year. Over time, that makes a substantial
difference. In Cooper’s example, it saves $15,393 in interest and shrinks the amortization
period by almost three years.
When Cooper paid off his mortgage, he threw a big party. To celebrate, he burned his
mortgage papers in front of a crowd of cheering friends.Indeed, his book seems, in part, a
tribute to the twentieth-century tradition of setting one’s mortgage documents on fire once
the debt is paid. In the last pages, Cooper laments that such parties are no longer a thing and
vows to make them cool again. As interest rates rise, he might find it easier to get Canadians
into it.
https://globalnews.ca/news/3801486/interest-rate-mortgage
On July 12th, for the first time in seven years, the Bank of Canada increased the overnight rate by .25%, withdrawing some of the stimulus that was needed after the oil price collapse and 2008 financial crisis. Variable rate mortgages and lines of credit will see higher rates and modest payment increases. Fixed-rate mortgage - which are based on the bond market – had already been trending slightly upward, although if you have a fixed mortgage, you aren’t affected until it’s time to renew. Keep in mind that this is a very small increase, and we’re still in an ultra-low rate environment and an incredibly stable market. We’ve also seen increases before to only see them decrease again. But rates have risen, so here are answers to the questions I’m getting:
Should I jump into the market now? Actually, my advice is always the same: buy when you are financially ready. Don’t jump the gun just because rates “may” go higher. But by all means, if you’re thinking about buying, I can arrange a pre-approval so you’re protected from rate increases while you shop around.
Should I lock in my variable rate mortgage ASAP? That depends. Your new rate with the hike is probably still less than current 5-year fixed rates, and you’ll still likely pay less if there is another .25% increase. So why pay more money than you have to? Stick with your original strategy of focusing on payment vs. rate. But if it’s going to keep you awake at night – or the few extra dollars are hard to find in your budget – then let’s talk about your conversion options. Remember though, you should be confident you’ll stay in a 5-year fixed mortgage for the full term. Breaking a fixed mortgage can result in some tough penalties.
What if my mortgage is coming up for renewal? Don’t feel rushed or pressured by a renewal letter or call. Let’s discuss your options. We’ll review your renewal offer together and I’ll shop around to see if it’s really the best deal available. Got too much other debt? This may be the time to roll it into a new mortgage to boost cash flow and save on interest costs.
Should we talk? Yes for sure. You should have confidence in your mortgage plan and that’s why professional mortgage advice is so critical. I have access to a wide range of lenders and know the right questions to ask to assess your situation and make sure you have the best mortgage strategy.
Brian Yhard 902-401-8143 or brian@yhardmortgages.ca
Although Yhard Mortgages is located in Fall River, Nova Scotia and a large portion of our business is generated locally we certainly can arrange mortgages all over Nova Scotia & across Canada.
Outside of the local area & within In Nova Scotia we have successfully arranged & closed mortgages in Cheticamp, Glace Bay, Donkin, Sydney, Kentville, Lunenburg, Hansport, New Waterford, Yarmouth, Sydney, New Glasgow, Port Hawkesbury, Shelburne, Yarmouth & Truro, to name a few.
We have also completed mortgages in Ontario, Alberta, PEI, Newfoundland, New Brunswick, Manitoba, British Columbia.
No matter where you are in Canada give us a call, send an email & we would be happy to arrange a mortgage for your next purchase, refinance, consolidation, vacation property, line of credit, reverse mortgage or whatever your residential mortgage needs are.
As always enjoy your day!
Mortgage brokers are earning a larger piece of the renewal mortgage pie, according to the Canada Mortgage and Housing Corporation’s 2017 Mortgage Consumer Survey.
Industry market share is growing in that important segment, growing from 26% in 2016 to 35% in 2017.
“Relationships and referrals are a very important part of the mortgage lending industry,” Nathalie Fredette, vice-president of client relationship management at CMHC, said. “The survey findings can be used by mortgage professionals to manage their businesses by improving the overall customer experience.”
Broker share of refinances (40%) and recent buyers (44%) remained stable, according to the Crown Corporation.
Notably, first-time buyers continue to prefer the services of their local mortgage broker to their own bank. Broker currently account for 55% of that market.
Interestingly, there was a similar split between home buyers who most value the best rate or deal (58%) and valuable advice and recommendations (52%).
When it comes to the mortgage broker experience, 72% of those clients said they were satisfied.
One area in which brokers obviously outshine banks is in communication following funding.
The report, which is based on a CMHC survey of 3,002 recent mortgage consumers, found 54% of consumers who used a broker were contacted by their mortgage professional following the transaction. Conversely, 31% of lenders initiated follow up communication.
The Down Payment Assistance Program (DPAP) assists Nova Scotians with modest incomes who pre-qualify for an insured mortgage to purchase their first home. Eligible participants can apply to receive an interest-free repayable loan of up to five per cent of the purchase price of a home.
Eligibility:
· The purchase price of the home may not exceed $280,000 in the Halifax Regional Municipality (HRM) and $150,000 in the rest of the province.
· Participants must have good credit and be pre-approved for an insured mortgage by a recognized financial institution.
For an applicant to be eligible for the assistance, the following criteria must be met:
o The property is in Nova Scotia
o The applicant is a first-time home buyer
o The applicant is pre-approved for an insured mortgage by a recognized financial institution
o The applicant has a satisfactory credit rating
o The applicant has reviewed the educational material for first-time home buyers provided by Housing Nova Scotia
o The applicant’s total household income is less than $75,000
o The applicant has resided in Nova Scotia for at least 12 months
The purchased property must be the applicant’s principal residence; rental properties, seasonal and recreational properties are not eligible.
Loans:
· The loans are interest-free and are repayable over ten years. Participants may waive their payments in the first year.
· The loan must go toward the down payment and cannot be used for financing, closing or other costs.
· The down payment assistance loans can range between up to $7,500 and up to $14,000.
Additional Information:
· The pilot program starts on May 1, 2017 and loans will be advanced between May 1, 2017 and March 31, 2018.
· The program will help between 100 and 125 households based on Federal and Provincial funding of $1.30 million.
· The program is based on a first come, first served basis.
At Yhard Mortgages we continuously look for opportunities to save our clients interest. By reviewing your mortgage annually we can see if you are missing out on potential interest savings. What does that mean? Well it means interest rates are always changing either going up or down. Here is an example you sign a mortgage, get a great rate and interest rates go down during your term. This means there may be savings by breaking the original mortgage and refinancing at the lower rate. Uncovering interest savings is always an enjoyable part of our business at Yhard Mortgages. We love to see happy clients! Want to learn more give us a call or drop us an email. As always HAVE A GREAT DAY!
