If you were on the fence about buying a house, do it before PST added onto CMHC!
Buying a home is one of the most important and exciting steps in your life…. found the home you want now you need a mortgage. Deal with people who can offer you and your family the best options. Devin Cristo and Wes Will of Your Mortgage Now are Trusted Saskatoon Mortgage Experts and they have many years of experience helping individuals and families in Saskatoon and area by offering mortgages from a variety of lenders . Their latest article is about upcoming changes in August when PST added onto CMHC Premiums
PST added onto Mortgage Insurance Premiums as of August 1st 2017
CMHC has recently advised us that there will be a 6% PST charge on all Mortgage Default insurance premiums (CMHC/GE/Canada Guaranty) as of August 2017.
CMHC will be required to collect 6% provincial sales tax (PST) on premiums and surcharges for full or partial loan advances made on or after August 1, 2017.
The Saskatchewan PST will be payable on premiums paid for all mortgage loan insurance transactions. The provincial sales tax cannot be added to the loan amount.
What does this mean for YOUR Mortgage?
If your possession date is on or after August 1/2017 there will be a 6% PST charge on your CMHC premium
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.
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
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 1-866-358-9999or by email at firstname.lastname@example.org, 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.
At YourMortgageNow.ca, we are always ready to answer any questions you may have about buying your first home in Saskatoon and area. But for some people, saving to buy their first home may seem daunting and they don’t quite know where to start. Here are some great money-saving tips to get you started:
Set a long-term goal: “I want to buy a home by the age of 30” or “I want to buy a home within five years of graduation from college”.
Determine how much you can afford: Be realistic about where you want to live and what type of home you will likely be able to afford. Consulting a financial advisor or mortgage professional early on will put you on the right path to fulfilling your goal.
Create a budget: Keep track of all the money that comes in and all the money that goes out. Balancing expenses against income will help you determine what, if any, adjustments you need to make to your spending habits in order to build savings.
Pay yourself first: Open a separate savings account and deposit a set amount of money every month through an automatic withdrawal from your paycheque or other bank account.
Live on cash: Every pay day give yourself an allowance in cash to get you through to the next pay day. If you don’t have cash handy you might think twice before buying something you don’t really need.
Build your savings account: Live off your day-to-day earnings and make the most of every unexpected inflow of cash. If you work overtime or receive a bonus, put that money right into your savings account.
Party at home: Going out for dinner, clubbing or a movie can really add up on your monthly expenses and kill your budget. Host movie nights or potluck dinners at home and see your savings grow.
Earn extra income: Sell unused items online through sites such as eBay, Craigslist or Kijiji; take on a second job; work part-time and summers if you’re a student.
Open an RRSP account early on: The Federal government’s Home Buyer’s Plan allows you to withdraw up to $20,000 from a Registered Retirement Savings Plans (RRSP) for a down payment on a first home. Consult with a financial advisor or mortgage professional to grow you investments wisely.
Do your homework: Before making any big investment or purchase, do some research. Avoid spending on impulse or emotion. If it sounds too good to be true, chances are it is.
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.
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 thebest 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;
Restructure your first mortgage to accommodate the extra funds you want out of your home.
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.
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.
For you savvy investors out there — or those planning on investing this year– now is a great time to think about your TFSA contribution for 2015. As of January 1, eligible Canadians (residents over 18) can contribute an additional $5,500 to their TFSAs. That brings the total contribution room to $36,500.
The Tax Free Savings Account (TFSA) is a fantastic way to save to achieve your financial goals in the future. However, only 19% of Canadians are aware of TFSA contribution limits, and only 11% of Canadians could correctly identify the investment types eligible to be held in a TFSA.
A Simple Introduction To Tax Free Savings Accounts The TFSA was created in 2009 as another investment vehicle to help Canadians save. The money you deposit into the account allows you to earn interest, dividends, and capital gains tax free! That’s huge because taxes can quickly eat up your hard earned investment returns.
Let’s highlight a few key rules…
Unlike a RRSP, TFSA contributions are not tax-deductible but the contributions and the investment earnings are exempt from tax upon withdrawal.
Do not over contribute! You are liable to a tax of 1% on your highest excess TFSA amount in that month. That cost can quickly get expensive, so be prudent when depositing. You can have more than one TFSA account at two different financial institutions, but be sure to not go over the total limit.
If you withdraw money, you must wait until the following calendar year to recontribute.
You never lose your contribution room if you miss a year. So for those of you who haven’t opened one yet and have been living in Canada, start making those deposits!
Remember to declare a beneficiary to avoid estate issues at death.
What is the difference between a TFSA and RRSP?
An RRSP is primarily intended for retirement savings. Tax assistance provided by a TFSA complements that provided through RRSPs.
RRSP contributions are tax-deductible while RRSP withdrawals are added to income and taxed at regular rates.
Unlike an RRSP, which must be converted to a retirement income vehicle at age 71, a TFSA does not have any minimum withdrawal requirement.
There is no TFSA spousal plan. Individuals can provide funds to their spouse or common-law partner to invest in their TFSA, up to the spouse’s or common-law partner’s available room, and the income earned on the contributed amount is generally not attributed back to the spouse or partner who provided the funds.
So, what can you do with your TFSA?
Use it to trade If you keep your TFSA in a high interest savings account (HISA), your returns will be anemic. To energize your TFSA, you need a more pro-active strategy – like trading.
Use it as a retirement fund We’re not saying to pull everything out of your RRSP—it’s still a great way to save for retirement. But TFSAs are becoming serious competition. They are especially important once you turn 71 when mandatory RRIF withdrawals kick in. If you’re over the $71,000 income threshold, you’ll possibly lose government income benefits. Since TFSA withdrawals are not taxed, you can use them to supplement your income without adding to your taxable income numbers.
Use it as your emergency fund Say your roof caves in or your car starts making that funny noise again, you’re going to need some access to cash. TFSAs are the best umbrella for the proverbial rainy day. You can withdraw as much or as little as you need to keep your budget balanced. And in the following year, you’ll be able to put any withdrawals back in. [Remember, the money in your TFSA is as liquid as the investments you hold. If you want to withdraw, you’ll have to factor in settlement time for the cash to appear in your account.]
Use it to pass on wealth TFSA beneficiary are two words your loved ones want you to know. Straight from the CRA’s rulebook: any money passed down to a beneficiary does not need to go through your estate. That means your family won’t get dinged on probate taxes from capital gains. If you can’t remember whether you designated a beneficiary when you opened your TFSA, check your account documentation.
Use it as collateral It’s nice to see a big number at the bottom of your statement but that money can do more than look pretty. Put it to work. Your TFSA can be used as collateral when you’re trying to secure a loan, like a mortgage. Better yet, you can build up your savings for the down payment of your home. Then build it up again to make larger payments on your mortgage.
Whatever you decide to use your TFSA towards, we can direct you to our network of Financial Advisors.
Spring and summer are commonly known as peak-season in Canada’s real estate market. But there are a number of benefits to purchasing in what is considered off-season too! From cost savings to enhanced convenience, here are five advantages of off-season house hunting and off-season home buying.
Buying a Home in the Off-Season
Perk #1: Highly motivated sellers
Winter sellers tend to be highly motivated and eager to sell their property quickly, particularly if they’ve listed just before or during the holiday season. This is a favourable time of year for buyers, in terms of encountering sellers who are receptive to negotiating on price and sales conditions.
Perk #2: Fewer bidding wars
Many parents would rather enroll their kids in a new school in September, not mid-year. You’ll have fewer competitors when you bid on a house that’s for sale during the off-season. You’ll encounter fewer fever-pitch multiple-offer scenarios, and be less likely to be outbid.
Perk #3: You’ll be able to see problems and negotiate solutions.
Does the roof leak? Are telltale icicles indicating attic heat loss? Is the basement carpet wet? Is the street around the house buried in snow because the municipal ploughs come here last? Are the living spaces drafty? Find out before you buy.
Check out a house midwinter and you’ll see what it’s like during the worst of our Canadian weather. No surprises here. And with motivated sellers and fewer potential buyers/competitors, you’re more likely to have the problem repaired outright, or to negotiate a repair credit into the sale price.
Perk #4: Less-busy real estate professionals
Almost every professional you deal with during your midwinter house hunting will be less time-stretched than during the peak season. From real estate agents to bank representatives and real estate lawyers, everyone will be seeing fewer clients. With fewer client needs to juggle, you can benefit from lightning fast response times, and faster than average turnarounds on paperwork and processing, from everyone you work with during the house hunting and homebuying process.
Perk #5: A smoother move
You can count on better service – and a better price – when you hire movers for a winter job. With fewer moves going on, you’re more likely to get your preferred date and time. By avoiding peak season, you’ll pay the lower off-season moving rates.
Although there are downsides to off-season buying (namely, fewer homes to choose from), the benefits are significant enough to make it a smart choice for many first-timers and experienced homebuyers alike.
The purchase of your first home is a large investment and one that involves a significant financial commitment. Homes with legal suites are a great option for the first-time homebuyer seeking a home to both live in and build equity from, plus gain some revenue from a basement suite renter.
First-time homebuyers can request their real estate agent to do a search for properties that possess a ready-built suite or have the potential in which to build one. A property that already has a separate entry and two separate kitchens, or water hook-ups in an area where appliances could be installed, would be optimal. Kitchens are one of the more expensive rooms of a house to finish oneself.
Alternatively, first-time home buyers may seek out newer homes with unfinished basements at a lesser home cost, and attain a mortgage that allows cash for improvements, a home renovation loan or line of credit secured on the home to finish the basement into a suite. Simply request to seek properties with walk-out basements or homes wherein a separate entrance could be developed easily.
Income from a basement apartment can help first-time buyers carry the costs of their home. But it’s not as simple as placing an online ad; homeowners must take due diligence to ensure their basement apartment is legal and that their tenants are trustworthy.
The legalities of basement apartments
If the apartment doesn’t comply with local zoning bylaws and fire codes, the apartment isn’t legal.
You need to check with the City of Saskatoon to see if your basement apartment is registered as a second unit. If it is, then it is legal and compliant with the fire code. If it’s not registered, then you have to conduct further research. A city’s zoning bylaw will tell you if your area permits a basement apartment.
If you want to apply for a new unit, you will need a building permit that satisfies the provisions of the fire code in your province.
When looking at a property, if the basement apartment is being advertised as a “nanny suite” or “in-law apartment,” be wary — this unit is most likely illegal. If a neighbour complains about your unit to the city and an inspection occurs, you will be required to pay to upgrade your unit to proper standards.
You must advise your insurance company if you intend to rent out your basement apartment. By not disclosing this information, it may refuse to pay a claim if, for example, a fire occurs later.
You must be very careful when interviewing any potential tenant that you do not inadvertently violate any sections of the Human Rights Code by asking any inappropriate questions.
You are permitted to ask prospective tenants on a rental application if they smoke, whether they have pets and how many people will be living with them in the apartment. You can also ask for references and their rental history. You cannot ask about their ethnic background, religious or sexual preference, or marital status.
It’s important to conduct the proper research in advance before renting your basement to a residential tenant. Be sure to ask for a current pay stub from where they work and call previous landlords for references.
Basement apartments, if created and rented out properly, can give you peace of mind and additional income to assist you in carrying the costs of your home and increasing its long-term value.
Apply for a mortgage pre-approval and make use of the free and easy online mortgage calculator to formulate your budget and know what you truly can afford.
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 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
As your licensed mortgage associates, we want to ensure you are well prepared for home ownership. This includes the many monthly fees that many homeowners don’t see coming. Some of them, like taxes, may not be billed monthly, so do the calculations to break them down into monthly costs.
How To Calculate The Monthly Costs of Owning a Home.
The Mortgage Payment For most home buyers, this is the largest monthly expense. The actual amount of the mortgage payment can vary widely since it is based on a number of variables, such as mortgage term or amortization.
Property Taxes Property tax can be paid in two ways – remitted directly to the municipality by you, in which case you may be required to periodically show proof of payment to your financial institution; or paid as part of your monthly mortgage payment.
School Taxes In some municipalities, these taxes are integrated into the property taxes. In others, they are collected separately and are payable in a single lump sum, usually due at the end of the current school year.
Utilities As a home owner, you’ll be responsible for all utility bills including heating, gas, electricity, water, telephone and cable.
Maintenance and Upkeep You will also have to cover the cost of painting, roof repairs, electrical and plumbing, walks and driveway, lawn care and snow removal. A well-maintained property helps to preserve your home’s market value, enhances the neighbourhood and, depending on the kind of renovations you make could add to the worth of your property.