Understanding the Home Appraisal Process

Consumers are often baffled by the home appraisal process. They may feel their home is worth a certain dollar amount, and therefore, the appraised value doesn’t make sense to them. It is important to know that appraisal guidelines are dictated by the lenders.

In many provinces, the lenders must disclose the purpose of the appraisal, as each situation carries its own set of rules. In essence, lender guidelines force appraisers to put a fair market value on a home based upon comparable sales in the area where the home is located, as the home must be bracketed according to size and value.

For example:

There is no set amount associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, and the local marketplace supports the value of a pool at $15,000, that item will be bracketed as [$15,000] on the appraisal.

Upgrades can usually be expressed at full value in newer homes since they required investing additional money onto the cost of building the home. On the other hand, the amount invested in upgrading or remodelling an older home is rarely reflected in full in the final appraisal.
The reason is the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace. Read more >>

Faut-il verrouiller son hypothèque?

Les taux d’intérêts sont encore bas, mais ils augmentent régulièrement. Voici quelques conseils pour vous aider à prendre les bonnes décisions en ce qui concerne votre hypothèque.

Si vous achetez une maison, vous vous demandez peut-être s’il vaut mieux verrouiller son hypothèque à un taux fixe, (si les taux continuent à monter) ou choisir un taux variable qui fluctue avec le taux de base. De même, si votre hypothèque existante est à taux variable, il serait peut-être temps de la verrouiller.

Les taux hypothécaires sont difficile à prévoir. Il est préférable de prendre sa décision par rapport à sa situation personnelle plutôt que sur des spéculations économiques.

Taux variable

Les hypothèques à taux variables sont attractives car les taux d’intérêts sont plus bas que pour une hypothèque à taux fixe de même montant et de même durée.

Si vous avez une hypothèque à taux variable les montants à payer varieront également. Ou, avec des paiements fixes, la portion du paiement qui couvre votre hypothèque fluctuera.

Avec les taux d’intérêts qui baissent, votre principal sera plus important mais vous paierez moins d’intérêts.
Mais si les taux grimpent votre principal diminuera et vous mettrez plus de temps pour payer votre maison.

Devez-vous prendre une hypothèque à taux variable? Si vous pouvez gérer le stress de l’incertitude, le taux variable peut vous faire économiser de l’argent à long terme.

Taux fixe

Si vous avez une hypothèque à taux fixe, le taux d’intérêt sera plus élevé qu’une hypothèque à taux variable. Par contre l’avantage c’est que votre taux est fixe pour toute la durée de votre hypothèque.

Même si les taux généraux augmentent, votre taux reste invariable. Au moment ou vous signez votre contrat à taux fixe vous savez exactement ce que vous aurez à payer et combien il restera à payer..

Devez-vous prendre une hypothèque à taux fixe? Si les fluctuations des taux vous créent des insomnies il vaut mieux le faire pour dormir en paix!

Votre décision

Finalement , la décision est un choix personnel comme le fait de choisir votre maison.
Chaque individu est unique et particulier, et cette décision devrait toujours faire l’objet d’un avis donné par un professionnel.

Pour toutes questions concernant le financement hypothécaire, taux d’intérêts, programmes etc….veuillez contacter: Danuta 1-800-605-6154

Know the Score: Three Steps to Better Credit

If you are looking to buy, invest in, or obtain a better rate on your current mortgage now or in the coming months, your credit is going to play a more significant role in today’s tight-fisted credit environment than it has in the past. It’s that simple. Would-be borrowers need to address any and all credit issues now to avoid having to pay for it later.

But, here’s the kicker: a great number of all credit reports contain errors of some kind. The credit reports contain mistakes so egregious that applicants could actually be denied credit! Don’t let this happen to you. Read more >>

STOP Paying Your Landlord’s Mortgage!

Lets begin this article by stating: Renting is wasting money!

All those payments you’ve made at the end of each month, you will never see them back again. Ever.
But your landlord will, once he/she decides to sell the property.

If you remain a tenant, you are making your landlord rich, but you do nothing for yourself. But if you put those exact same dollars into a house payment instead of rent, you create “equity”…value that you own, that later can send your children to college, finance the start-up of your own business, or pay for your retirement.

For example:

If you are currently paying $1,000 a month for rented housing, then over the next three years, your landlord will effectively have reaped $36,000 of your hard earned cash! You’re paying his mortgage when you could be building equity in your own property.

What if I don’t have the money to buy a home right now?

There are many loan programs available that offer low and no down payment options. Read more >>

What’s the difference between pre-qualification and pre-approval?

Pre-qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment, etc. All of these factors will then be analyzed to determine your loan eligibility.

Pre-approval is written documentation that shows you have the support of a lender who is willing to finance you. It means an underwriter has reviewed your loan application. Based on your income, debt ratio and savings, the underwriter provides the dollar amount you are eligible to borrow. Now you can shop around for houses that fit into that loan amount category.

Here is the nice thing about the pre-approval: It gives you the leverage to shop as a cash buyer!

• With a pre-approval in hand, you now have the power to negotiate.
• The seller will take your offer much more seriously knowing you are already approved by a lender.
• Pre-approval can also shorten the time it takes to close, making even a lower bid attractive to sellers who are seeking to move quickly.

What will my monthly payments be?

Read more >>

How Purchase Loans Are Made

A Step-By-Step Walkthrough

1 Loan Application and Pre-Approval – Lenders are encouraging buyers to get pre-qualified for a mortgage even before they begin looking for a house. This way, buyers know ahead of time how much house they can afford.

2 Loan Search – Although buyers often use a lender recommended by their Real Estate agent, some prefer to do their own comparisons. Borrowers may choose to contact a mortgage broker who has access to a wide variety of loans.

3 The House Hunt – At this point, the buyer begins shopping for a house. When the right one is found, the terms of the sale are negotiated, including the sale price and often the type and conditions of the loan being sought. 

4 Documentation – It is crucial to supply the lender with copy of Promise to Purchase, Annexes, Counter Offers and all other paperwork supporting the application.

5 Loan Review – The loan package with all pertinent information is to be sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.

6 Appraisal – Lenders may require an appraisal on home sales not insured by CMHC. This step could jeopardize a deal if a big discrepancy were to exist between the home’s sale price and appraised value.

7 Underwriter’s Review – Based on the information put together by both the loan advisor and the processor, the underwriter makes the final decision on whether a loan is approved.

8 Mortgage Insurance - Lenders require mortgage insurance with CMHC or Genworth or AIG when borrowers put down less than 20 percent on a loan. Even if a loan meets the standards of a lender, a mortgage insurance company could choose to deny coverage. This law does not apply to subprime lending.

9 Title Search – This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.

10 Insurance – Lenders require fire and hazard insurance on the replacement value of the structure.

11 Signing – Final loan and documents are signed at the notary office.

12 Funding – The lender sends a wire or check for the amount of the loan to notary.

13 The Buyer Begins Making Mortgage Payments.

Written by Danuta Levitzki. Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
For current interest rates or to get more information on mortgage financing feel free to visit her website or call direct at 1-800-605-6154.

Credit: Biggest Myths, Mistakes, and Misconceptions

Good credit is well worth the effort it takes to both achieve and preserve it. If you have good credit, the following tips will help you keep it that way. If you are looking to improve your credit, however, now is the time to get started.

Give us a call. We’ll review your credit and find out exactly where you stand. In the meantime, if you plan on entering into a loan transaction in the next 6 to 12 months, you simply cannot afford to make the following credit mistakes:

• Don’t fall behind on existing accounts. This includes your mortgage and car payments. One 30-day late can cost you anywhere from 30-75 points.
• Don’t pay off old collections or charge-offs during the loan process. Paying collections will decrease your credit score immediately due to the “date of last activity” becoming recent. If you want to pay off old accounts, do it through closing, and make sure that
  1) you validate that the debt is yours, and
  2) the creditor agrees to give you a letter of deletion.
• Don’t close credit card accounts. If you close a credit card account, it will appear to FICO/BEACON that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure that it is an account you’ve opened more recently.
• Don’t max out or overcharge your credit accounts. This is the fastest way to bring about an immediate drop of 50-100 points in your credit score. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time.
• Don’t consolidate your debt onto 1 or 2 credit cards. It seems like it would be the smart thing to do; however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above. If you want to save money on credit card interest rates, wait until after closing.
• Don’t do anything that will cause a red flag to be raised by the scoring system. This would include adding new accounts, co-signing on a loan, or changing your name or address with the bureaus. The less activity on your reports during the loan process, the better.
• Don’t do it alone. If you feel that the credit challenges you’re facing are too much, or you don’t have enough time to do the work necessary to improve your own credit, don’t lose hope and give up.

Written by Danuta Levitzki. Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
For current interest rates or to get more information on mortgage financing feel free to visit her website or call direct at 1-800-605-6154.

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