Dealing with Mortgage Payment Difficulties & Fort McMurray fire disaster

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.

Mortgage Payment Difficulties

When unforeseen financial circumstances impact your ability to make regular mortgage payments, or disaster strikes, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.

 

 

Dealing with Mortgage Payment Difficulties

What Can We Do to Help?

If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

1. Talk to your mortgage professional

  • To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
  • Ask the mortgage professional about information on the options available for managing your financial situation; and
  • Keep the mortgage professional informed as circumstances evolve.

2. Clarify the financial picture

In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.

3. Stay informed

The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions.

Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counselling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.

How Can Your Mortgage Now and CMHC Help?

Your mortgage professional wants to establish and maintain a positive relationship with you over the long term, and is fully trained and equipped with the tools to help you deal with the temporary financial setbacks that you may be facing.

For mortgages insured by Canada Mortgage and Housing Corporation (CMHC), CMHC provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation. These tools include:

  • Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
  • Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
  • Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
  • Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
  • Offering a special payment arrangement unique to your particular financial situation.

CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In every case, the options available will depend upon your individual financial circumstances.

 

 CMHC Tools to Support Canadians Affected by Fires in Fort McMurray and Area

Mortgage Payment Difficulties

CMHC joins Canadians in expressing our concern for the people of Fort McMurray and the surrounding area that are dealing with devastating forest fires.

As residents continue to deal with the effects, CMHC wishes to remind mortgage professionals that we can help you assist homeowners that may be affected by these unfortunate events. and their impending Mortgage Payment Difficulties.

For borrowers with CMHC-insured mortgage loans that are affected by the fires and who may require special arrangements to meet their mortgage payment obligations, CMHC offers Approved Lenders a series of default management tools including:

o        Deferral of payment
o        Re-amortization of the loan, to result in lower payments
o        Capitalization of outstanding interest arrears and other eligible expenses
o        Special payment arrangements
o        A combination of the above

Approved Lenders have the flexibility to make these special arrangements quickly and without CMHC approval provided that they retain a documented analysis of the borrower’s financial situation on file. Approved Lenders can refer to the CMHC Homeowner Default Management Guide for complete details on CMHC’s default management program. Please find attached a flyer providing a summary of these arrangements.

Approved Lenders are reminded that properties must be adequately protected by standard insured perils and that any damage exceeding $5,000 should be reported to the CMHC Claim Payment Centre.

CMHC recognizes that homeowners affected by the fires may experience some financial hardship due to income shortages resulting from temporary evacuations or due to the need to rebuild or repair their homes. CMHC encourages homeowners with CMHC-insured mortgages to contact their financial institution at the first signs of financial difficulty to discuss their specific situation. 

To help you share information with any of your clients that may be affected, please also find attached CMHC’s “Dealing with Mortgage Payment Difficulties” factsheet. 

CMHC’s Default Management Tool Selector can also help lenders to determine what CMHC default management tools are most appropriate given the borrower’s circumstances. CMHC also offers comprehensive training to Approved Lenders covering CMHC’s default management tools and more. If you are interested in obtaining training, please contact your CMHC Account Manager, Client Relations.

CMHC’s Default Management and Claim Specialists are also available to assist you at any time, including before a default occurs and during early stages of payment delinquency. The Specialists have the expertise to help you manage unusual or complex default situations. Contact the Claim Payment Centre, Monday to Friday at 1-866-358-9999 or by email at cpc@cmhc.ca, to speak with a Specialist.
You can work with confidence, knowing that you are supported by an experienced and informed mortgage loan insurance provider in the Canadian housing market.

Do not hesitate to contact me if you have any questions or require assistance.

CMHC is Canada’s national housing agency. For over 65 years CMHC has shared a wealth of knowledge and housing expertise to help create an informed and reassured homeownership experience for Canadians.

Your Mortgage Now Saskatoon discloses Mortgage Costs

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.

MORTGAGE COSTS

mortgage costs
Over and above your down payment, there are always last-minute costs such as taxes, legal fees, appraisal fees, moving expenses, and house insurance to pay before you are finally a new home owner.

These are known as “closing costs”, and there are some that you simply cannot avoid or lessen, as they are legally required and often fixed at a particular rate or charge. The time to budget for those “end” expenses is now. You must be prepared to pay most, and perhaps all, of the following costs.

Property Purchase Transfer Tax

Some Provincial Governments impose a Property Purchase Transfer Tax (PPTT) which must be paid when a property is legally transferred to a new owner. Each Province has there own formula.

Taxes

If you are purchasing a new home, you may be subject to GST/HST on the purchase price. Most Provinces will reduce the GST/HST if the purchase price is under a certain threshold. Check your Provincial Government Web Page for details.

Legal Fees

The transfer of property ownership fro the seller to the buyer must be recorded in the Land Title Office. Only a lawyer or notary can act on your behalf during the completion of your purchase. Legal fees for this service typically include a registration fee, disbursements, and a fee to prepare and register the mortgage documents.

Property Tax Adjustment

Of the current owners have already paid the full year’s property taxers to the municipality, you will have to reimburse them for your share of the year’s taxes.

home-inspection

Home Inspection Fee

A property inspection includes a check of all the major components of a building – roof, foundation, insulation, plumbing, heating, and electrical systems are all properly tested and examined. Not only do inspectors catch things you may have missed, but they also provide a detailed, written inspection report. CIBC will pay up to $500 for home inspections in most places in Saskatchewan.

Appraisal Fee

Lending institutions require an appraisal of the property before giving you your mortgage funds; it will be your responsibility to pay the appraiser’s fee.

Title Insurance

The lending institutions may also require Title Insurance (which has now replaced a Survey Certificate in most cases) to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.

Mortgage Default Insurance

A high ratio mortgage allows borrowing more than 80% of the purchase price of the new home. In most cases, the premium is added to the mortgage amount, however if you can pay the premium upfront, do so now – it could save you even more later.

Life and Disability Insurance

As you take on any new debt, you should always consider your insurance protection needs, especially if you have a young family. You could purchase protection from your lender, however in most cases you would be better off to speak to an insurance agent/broker.

Fire Insurance

The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage before you receive any insurance proceeds.

APPLY ONLINE NOW or call us today!

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

Is Your Mortgage Up For Renewal?

 

MORTGAGE UP FOR RENEWAL

The biggest monthly expense for most Canadians is their mortgage payment.

Yet according to an Angus Reid survey, almost 27 per cent of households automatically renew their mortgages when the term is up instead of trying to find a better deal.

Mortgage renewal

If your mortgage is up for renewal within the next 6 months you may want to start thinking about what you’re going to do when your mortgage term ends. While you could renew with your current lender, you may be missing out on potential mortgage interest savings. It’s most often in your best interest to see what else is available for you before you sign on the dotted line of any mortgage commitment. This week, we want to highlight the mortgage options you have at renewal time so you can make an educated decision on how to proceed into the next term of your mortgage.

Renew your mortgage with same lender

If you don’t want to make any changes to your current mortgage amount or amortization, a simple mortgage renewal could be the solution for you. Your existing mortgage lender will usually send you an offer to renew near the end of your mortgage term or maybe sooner, depending on your lender. This document will contain the different mortgage term rate offerings for you to choose from. The benefit of renewing with your existing lender is, minimal paperwork is required as most often you are not required to re-qualify for the mortgage and there’s usually no costs involved unless your lender is charging you a renewal fee. This is ideal if you just want to sign on the dotted line, though the downside is you may not have initially been offered the best rate available. Often the rates are negotiable and you need to be aware you don’t get what you don’t ask for, however, before having the rate talk with your lender do some research first to determine what exactly the “best rates” are for your current financial position.

Renegotiate your mortgage with a different lender

If you’re okay with your existing mortgage amount though looking at making changes to the interest rate, or other terms your contract does not offer, you may want to look at the possibility of renegotiating your mortgage with a different lender. If you’re going to look at this option, be prepared to provide updated mortgage application details as well as supporting documentation to your new mortgage lender. As you don’t have a mortgage repayment history with this new lender they will want to re-qualify you for the mortgage which will also involve ordering your credit report. Usually a mortgage “switch” doesn’t involve any costs charged by the new lender as they will cover them, though there may be some small administration costs of $200-$300 charged by the lender you are leaving.

Refinance your mortgage

A refinance is perfect for you if you want to access your home equity at renewal time. Refinancing your mortgage allows you to restructure your mortgage amount, term, interest rate and amortization. If you have sufficient equity available this can allow you to pay off debt, invest, renovate, and more. There are some costs related to refinancing your mortgage which may include appraisal and legal fees, though they usually aren’t as high as what you paid when you originally purchased the home. Some lenders will also offer to pick up some of the costs to their refinance customers or offer some small cash back amounts to help reduce any out of pocket costs that need to be paid. You can also discuss other options including paying some of those costs from your refinance funds at closing time.

The next step is deciding on which of the 3 ways you want to access your equity at renewal time;

  1. Restructure your first mortgage to accommodate the extra funds you want out of your home.
  2. A second mortgage will allow you to leave your first mortgage details the same, but access equity by obtaining a 2nd mortgage behind your 1st one. Be careful though, as 2nd mortgages may come with higher rates and possibly fees.
  3. Or, if you qualify, a home equity line of credit could be the solution you’re looking for. It can be registered behind your first mortgage and offers a variable interest rate, an open term and interest only payments.

A lot can change during the term of your mortgage including income, assets, debts, and financial profile, among other things. It’s never a bad idea to give your mortgage a check-up at renewal time to ensure it aligns with the financial goals you are trying to achieve. Don’t be afraid to explore how you can make your mortgage work to your benefit by partnering with experienced mortgage professionals at YourMortgageNow.ca. Devin and Wes are Trusted Saskatoon‘s Mortgage Associates who specialize on the perfect financing solution for your unique financial situation.

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

Closed vs Open Mortgages explained by Mortgage brokers

The various types of mortgages can seem bewildering to the first time homebuyer, but understanding all your mortgage options will help you make the best financial decision when choosing your mortgage. This article explains the difference between a closed mortgage and an open mortgage.

Closed vs Open Mortgages explained

Closed vs Open Mortgages the skinny!

What is a closed mortgage?

A closed mortgage agreement is a mortgage which can not be renegotiated, repaid, or refinanced for the duration of the mortgage (i.e., until the mortgage reaches maturity). If you wanted to make any changes to your mortgage, you would be subject to a prepayment charge.

What is an open mortgage?

An open mortgage agreement is much more flexible than a closed mortgage. You will be able to make prepayments at any time, and in some cases may be able to pay off the mortgage before the end of the mortgage term, with no prepayment charges.

The interest rate for open mortgages is usually higher than the rate for a closed mortgage with comparable terms. Open mortgages are often only available for short terms (6 months to 1 year are common).

Advantages and disadvantages of a closed mortgage

The main advantage of a closed mortgage is the (usually) lower interest rates, compared to an open mortgage. If you think the interest rate you are offered is good, a closed mortgage would give you the stability of knowing your rate would not increase for the duration of your term.

Closed mortgages are also a good choice if you plan to have your mortgage for the long term. You will save on interest costs, as your rates will be lower than an open mortgage. In the long run, this saving may help you pay your mortgage off faster.

The disadvantage is the lack of flexibility. If, for example, you wanted to change your mortgage agreement to take advantage of lower interest rates, you will have to pay a fee. Similarly, if you wanted to pay a lump sum towards your mortgage, you may only be permitted to pay down a certain percentage, such as 10%.

Advantages and disadvantages of an open mortgage

The main advantage of an open mortgage is the flexibility you will have. If you save or inherit a lump sum and want to put it towards your mortgage, you can do so! Open mortgages are best if you plan to pay off your mortgage in the near future. They are also best if you plan to sell your home soon.

The disadvantage of an open mortgage is that if rates go up, when your mortgage term ends you will be faced with a higher mortgage.

If you have questions regarding the type of mortgage you need, please give us a call at (306) 244-7755. Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

Common Credit Score Myths explained by Your Mortgage Now

CREDIT SCORE MYTHS

Common Credit Score Myths

This three-digit number is surrounded by a lot of misconception and misunderstanding, we can help you better understand how your ‘credit score’ works.

For starters, your credit score is a prediction based on statistics of your credit risk at a specified point in time. The lower your score, the riskier you may appear to a lender, landlord, credit card company or car dealer.

Credit experts are used to fielding questions about credit scores and correcting misconceptions. According to Patricia White, executive director of Credit Counselling Canada, common myths about credit scores include:

Shopping for the best rate can hurt your credit score.
The reality? There may be features built into credit scores which identify a pattern but there are no penalties for shopping for the best interest rate.

Credit cards must be paid off in full.
The reality? What has a greater impact is having a few credit cards and managing them well. The amount of credit used should be no more than 35 per cent of your overall credit limit.

Credit scores treat people unfairly.
The reality? The scoring system is objective. Mathematically-based tools provide an unbiased assessment.

Closing a credit account will hurt your score.
The reality? If you closed a number of ‘old’ accounts this would decrease your available credit and your credit ratio would increase. Closing one account will only have a minimal effect.

Making frequent inquiries about your score will negatively affect it.
It can if you are seeking credit from a number of sources in a short period of time, such as several credit cards. If you are asking for a copy of your report, this will not impact your credit score.

It’s important to be aware of what helps and hurts your score. Your payment history, debts, how much credit you use, the length of your credit history, the number of new credit accounts you take on or inquire about, and the mix of credit types in your name all inform your score. We recommend ordering a copy of your score (from consumer credit reporting agencies; like Equifax) once a year; not only to keep yourself in check, but as a protective measure. Mistakes can be made, so ensure that your information is correct.

Need to improve your score? Paying your bills on time and repaying loans and credit card balances quickly will help improve your score but there’s no instant fix. Your score is based on past performance so building your scores will take time and diligence on your part.

 

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Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

5 Tips to Become Mortgage-Free Faster!

Your Mortgage Now shares 5 Tips to Become Mortgage-Free Faster

Budget for it first.

There are a number of strategies to help homeowners pay off mortgages quicker; all involve paying more money.

Your first step should be to determine if you have the flexibility in your budget to put more money toward your mortgage.

Balance everything – You want to be setting yourself up for a strong financial future by putting money away for things like your retirement and your kids’ education.

Accelerate your payments.

If you do have the extra budget room, consider adjusting your payment plan.

For example, if you go on a bi-weekly accelerated schedule, making a payment every 14 days, instead of twice a month, you’ll have made the equivalent of 26 payments, by the end of the year.

Smaller, more frequent payments will reduce your interest costs and get you mortgage-free faster. If you tie it in to your payroll, you don’t even miss it.

Increase your monthly payments.

Most financial institutions let homeowners make additional mortgage payments alongside their regular monthly payments.

Depending on the lender, a homeowner may be allowed to pay between 10 to 100 per cent of the mortgage payment and have it go directly toward paying down the principal, not the interest.

Make a lump sum payment.

Say you get a bonus at work or receive an inheritance – putting a chunk of that windfall toward your mortgage can make a difference.

Most lenders let clients pay lump sums between 10 to 20 per cent of the original mortgage, or the remaining balance. The full amount can be paid in one go or it can be made in instalments.

(Note: the lump sum contribution is over and above the amount you are allowed to contribute in additional bi-weekly payments.)

Reduce your amortization.

The principal-to-interest ratio on a mortgage leans more heavily toward interest in the first part of the mortgage term.

If you’re taking a shorter amortization, you’re tipping the scale a little bit so that a bigger portion of your payment is going towards your principal for that portion.

The strategies outlined earlier – making accelerated, additional and lump sum payments – can effectively reduce your amortization period, while still giving you financial flexibility.

 

Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

First Time Home Buyer: Saving Money!

Want to be a First Time Home Buyer?

You’ve been saving money to buy your first home for so long and it’s one of the most significant purchases you’ll make in your life. But with all the details and parties involved, it’s easy to get confused or blindsided by hidden costs and fees. We can help – here are some tips to ensure you get the most for your money.

  1. Resolve credit issues before applying for a mortgage
    Your mortgage rate is partially determined by your consumer credit score, so fix what you can before you apply. Even little things like late payments or errors on your record (it happens!) can jack up your mortgage payments.
  2. Budget wisely and save for a down payment…even if it means waiting a little longer to buy
    It’s hard to be patient, but a decent down payment means more reasonable payments, saving you thousands over the duration of the mortgage.
  3. Shop around for mortgage rates
    Don’t assume the offer made to you by your bank or broker is set in stone. It will vary, especially if you make it clear that you’re comparison shopping! Closing costs and fees can also be negotiated – use them as bargaining chips.
  4. Don’t take listing prices at face value
    Found something you like? Research house values in the neighbourhood to be sure you’re dealing with a fair price. Your real estate agent can help, but you can also search for nearby listings online or attend open houses in the area.
  5. Use your RRSPs
    In Canada, first-time homebuyers can take advantage of a federal government program called the Home Buyers Plan (HBP) which allows you to take up to $25,000 from your RRSPs, tax-free.
  6. Don’t be scared to low-ball your offer
    New buyers can be timid when it’s time to buy, but unless you know you’re headed for a bidding war, low offers can be countered. So you may as well give it a shot!
  7. Make your offer contingent on closing dates
    It’s easy to overlook small details like closing dates in the rush of making an offer. But don’t risk the cost of paying for temporary accommodation and putting items in storage if you run into last minute changes.
  8. Get a list of fixtures and fittings included in the sale
    Check the details to avoid opening the door to your new home and finding it stripped of light fittings, cables and appliances. Also, pay attention to what you’re paying for: the seller may list the price they paid for an appliance, but from how long ago? Would it be more cost-effective for you to exclude it from the offer and buy a new one?
  9. Review your closing statement carefully
    With all the details that go into buying a home, it’s not unusual to find mistakes in the fine print. Be sure you check the math prior to closing, so you don’t overpay based on a simple clerical error.
  10. Opt for bi-weekly mortgage payments
    Paying monthly means that you make 12 payments per year. But if you pay half that amount every two weeks, you’ll make 26 payments, which means you’re paying down your mortgage faster.

Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

6 Tips to Help Renew Your Mortgage

The biggest monthly expense for most Canadians is their mortgage payment. So
before you decide to renew with your current mortgage lender, take a look at these tips to help lower your payments come renewal time.

1. Get Started Early
Start shopping around for a better rate four to six months before your mortgage is up for renewal.
This is the longest lenders can guarantee a discounted rate. If your current lender’s rate rises, you have your guaranteed rate to fall back on.

2. Do Your Homework
Find out what other lenders are offering before you negotiate a lower rate from your bank. View our current rates at www.www.yourmortgagenow.ca

3. Never Accept the Bank’s Posted Rate
If you don’t ask for a better rate, you won’t get one. If you current lender has the best mortgage features, advice and policies, ask your bank to match a competitor’s lower rate.

4. Negotiate on other Available Options
The amortization period, the rate type (fixed or variable) and the flexibility of the payment schedule can also determine ways to lowering your costs, not just the interest rate.

5. You Can Change Lenders
A lot of people renew with their lender and don’t even think about switching to another one. You could be missing out on what other financial companies are offering, plus there is no penalty if you switch at renewal time.

6. Use a Mortgage Broker
If you don’t like negotiating and don’t have the time to research rates, a mortgage broker will do ALL the legwork for you — even without charging you anything, since they are paid a commission from the lenders.


Did You Know
Saving even half a percentage point on your mortgage rate can save you up to $10,000 over 25 years (based on a $150,000 mortgage).


If your mortgage is coming up for renewal in the new year or you have questions about your current mortgage, contact us today!

Things To Do Before You Renew Your Mortgage

If you have a mortgage coming up for renewal this year, it’s a good idea to check on a few details well in advance of your current term’s expiration date.

For example, determine whether you need to produce new documents to verify ownership before you get your new financing in place. An old property survey or condo agreement that is outdated and/or in need of correction may require official amendments before you can secure your new mortgage. Since such documents can take time, it’s wise to keep an updated file of all changes to your ownership status and have it ready when it’s time to renew.

Is your mortgage up for renew? Make sure to contact us to secure your low interest rate! (306) 244-7755 or devinandwes@www.yourmortgagenow.ca

“Mortgage” means “Death Pledge”… Wait.. What?!

 

Strangely enough, the root word mortgage comes from the French word “mort”, which means “dead”, and “gage” from Old English, which means “pledge”.
In the 1500’s, this term was used in the doubtfulness of whether or not the mortgagor would pay the debt. The word does not refer — as it may seem — to the debtor’s metaphorical death, in taking on such a large loan that usually takes many years to repay. Instead, the “mort” part of the word signifies that the agreement “dies” when the debtor has repaid the creditor for the full amount of the mortgage. If the mortgagor did not pay, then the land pledged as security for the debt was taken away.
Nowadays, the term mortgage is used as a term for purchasing a property. Mortgages all have a term representing the length of time before your home is paid off and a rate which determines the principal and interest payment that will be required to be paid during this term.
If you are unable to make your mortgage payment for several months, you could lose your home. If you are ever in this situation, there are ways to save yourself from foreclosure. Contact your mortgage broker or lender for more information.